Today in the German Constitutional Court at Karlsruhe a case begins which could signal the end of the Eurozone. Or not.
The head of the Bundesbank, Jens Weidmann, is asking the Court for a declaration that the European Central Bank exceeded its mandate when it said last year that it would be prepared to buy up the sovereign debt of troubled southern peripheral member countries. ECB head Mario Draghi's Outright Monetary Transaction mechanism is widely credited with putting a cap on bond yields in Spain and Italy, thereby preventing default and Eurozone break up.
Now the Court has no jurisdiction over the ECB, but it does over the Bundesbank, and it could in theory declare that Germany's central bank could not lawfully take part in Draghi's scheme. OTR has cast such a formidable spell on the bond markets that no country has yet had to use it, and what would happen to bond yields if the Court ruled OTR unconstitutional is anyone's guess.
But while we're in the business of guessing, my money is on the Court finding in favour of the ECB.
Why?
Because the great and the good in continental Europe have been brought up on Every Closer Union with their mother's milk. If I had to bet the mortgage, I'd wager that the eight judges of the Bundesverfassungsgericht won't upset the apple cart.
Tuesday 11 June 2013
Tuesday 4 June 2013
Ed Balls smells the coffee
I've been pointing out for five years that the credit crunch is a much more serious problem for the Left than the Right, and there are a couple of signs today that late risers are at last beginning to smell the coffee.
Firstly, the Grauniad reports today Ed Balls's speech to the effect that under the next Labour government the most affluent pensioners won't get the winter fuel payments any more. This reform is long overdue, and it shows a dawning acknowledgment that future governments really are going to have to cut spending.
Secondly, the paper has a wonderful quote from the Institute of Public Policy Research, the Left-leaning think-tank, whose director Nick Pearce writes, "The challenge for Labour is to assemble an alternative social democratic strategy that better controls costs".
It's been obvious since about 2009 that the boom in UK government spending had been largely built on the state taking on more debt, and on the tax revenues generated by consumer debt. All the credit crunch did was demonstrate the truth of the maxim that What Can't Go On Forever Must Stop.
The consequences for social democracy, as the IPPR seem at last to be recognising, are devastating. Social democracy's big idea is that the state will spend the large sums of money required to support people who need supporting. What's immediately obvious from the 1997/2010 record however is that the UK government could not afford its public spending commitments even though its course almost exactly coincided with the longest period of economic growth in British history (1993-2008).
If public spending was unaffordable during the very best of economic good times, my reasoning goes, it isn't going to be affordable in the more straitened times to come. That's why I've been boring friends and family for years with the proposition that social democracy as we have known and sometimes loved it is in very deep trouble.
So when an IPPR director says Labour must "assemble an alternative social democratic strategy that better controls costs" it is a cherishable "no really" moment for those of us in the reality-based community.
You have to hand it to Ed Balls. No one else in British politics could possibly utter his line about "iron financial discipline" - this from Gordon Brown's chief lieutenant - and maintain a straight face.
His winter fuel payment cut will save about £100 million, it is calculated. The UK's projected deficit for 2013-14 is close to £120 billion.
Deckchairs. Titanic.
Firstly, the Grauniad reports today Ed Balls's speech to the effect that under the next Labour government the most affluent pensioners won't get the winter fuel payments any more. This reform is long overdue, and it shows a dawning acknowledgment that future governments really are going to have to cut spending.
Secondly, the paper has a wonderful quote from the Institute of Public Policy Research, the Left-leaning think-tank, whose director Nick Pearce writes, "The challenge for Labour is to assemble an alternative social democratic strategy that better controls costs".
It's been obvious since about 2009 that the boom in UK government spending had been largely built on the state taking on more debt, and on the tax revenues generated by consumer debt. All the credit crunch did was demonstrate the truth of the maxim that What Can't Go On Forever Must Stop.
The consequences for social democracy, as the IPPR seem at last to be recognising, are devastating. Social democracy's big idea is that the state will spend the large sums of money required to support people who need supporting. What's immediately obvious from the 1997/2010 record however is that the UK government could not afford its public spending commitments even though its course almost exactly coincided with the longest period of economic growth in British history (1993-2008).
If public spending was unaffordable during the very best of economic good times, my reasoning goes, it isn't going to be affordable in the more straitened times to come. That's why I've been boring friends and family for years with the proposition that social democracy as we have known and sometimes loved it is in very deep trouble.
So when an IPPR director says Labour must "assemble an alternative social democratic strategy that better controls costs" it is a cherishable "no really" moment for those of us in the reality-based community.
You have to hand it to Ed Balls. No one else in British politics could possibly utter his line about "iron financial discipline" - this from Gordon Brown's chief lieutenant - and maintain a straight face.
His winter fuel payment cut will save about £100 million, it is calculated. The UK's projected deficit for 2013-14 is close to £120 billion.
Deckchairs. Titanic.
Monday 3 June 2013
The Sutton Trust - don't make me laugh
The Sutton Trust, an educational charity, has come up with a corking demonstration of the woeful blindness that blights UK educational policy.
It reports today that top state schools "are significantly more socially selective than the average state school nationally and other schools in their own localities", with a much lower proportion of kids on free school meals. Affluent middle class people are crowding round the best schools. The Trust thinks that "schools, particularly in urban areas, should use a system of ballots - where a proportion of places is allocated randomly - or banding across the range of abilities to achieve a genuinely balanced intake".
But the Trust is mistaking correlation for causation. It hasn't asked two fundamental questions, the first being "what is a good school?", the second "how does a school become good?"
The Trust defines good schools by results, referring to them as "the highest performing comprehensive schools". Good results = good schools. Let's assume that's right (although I personally think "good" is better defined in terms of value added). Now how did those schools become good? Obviously a lot of different things go into the mix - quality of leadership, quality of teaching, quality of facilities; but surely the one which trumps them all is quality of intake (I know the plural of anecdote does not equal data, but my own kids have done very well in a comprehensive in which some of the teaching was terrible and the buildings so depressing and squalid that they would have been a disgrace in 1970s Albania). If a school has an intake in which bright industrious kids well supported at home are over-represented, it will tend to do better than one in which they're under-represented.
So in which section of society are bright industrious kids well supported at home most likely to come from? Why, the middle class of course.
Keep with me here - I'm not suggesting that all working class kids are thick and have feckless parents, or that all middle class kids are all paragons; I'm just suggesting that bright industrious people tend to marry people like themselves, and either become or remain middle class. Not surprisingly, given a triple whammy of genetics, culture and affluence, they tend to raise children who take on their parents' characteristics.
It may not be an especially appealing thought, but we should not be surprised to find that the bright and industrious are over-represented in the middle class compared to the working class. This can only be not true if a) intelligence and industry are not heritable qualities, or b) we live in society that does not reward brains and effort. They are; we do.
So actually the Sutton Trust has got it risibly the wrong way round. There is a link between the middle class and the best performing state schools, but it doesn't work the way the Trust imagines.
The Trust thinks the middle class cluster round the best schools. Actually the best schools are best because the middle class cluster round them.
We will never get educational policy right in Britain while we suffer from this delusion - and Michael Gove suffers from it as well - that all wrongs can be righted if only we can make all schools "good" schools. The Sutton Trusts goals are actually more limited, in the sense that it is only trying to equalise access to "good" schools. But it too is chasing a shadow. If you equalise access the only result will be that "good" schools will start to get slightly worse results and "bad" schools slightly better.
The Trust says, comically, that "lower income students do better when there is a mix of students of all backgrounds in a school". I'm sure they do. The corollary must also be true - that higher income students do worse; and moreover as you reduce the number of higher income students in a school, the lower income students, previously doing better because of them, start to do worse as well. The Sutton Trust are strangely silent about this.
No amount of tinkering will fix the basic problem, which is that a lot of kids aren't very bright, and in any event come from households with a range of dreadful social problems, not the least of which is that the parents didn't get anything in particular out of the education system themselves. The kids are fly enough to know that they aren't going to be lawyers or doctors, but not quite clever enough to be realise that education is not just about money.
What might just make a difference, because of the very large numbers of children involved, would be the abolition of private education. A tsunami of Tarquins and Tamsins would descend reluctantly on the Gasworks Comp. Then you would see some equalisation.
But which government is going to risk that one?
P.S. A very good letter in the Graun the following day from a fellow sceptic wondered whether affluent middle class people enjoy better health because they are treated by "top doctors", or whether leafy suburbs enjoy lower crime rates because they are watched over by "top police officers".
Very pithily nailed. Bah. Humbug.
It reports today that top state schools "are significantly more socially selective than the average state school nationally and other schools in their own localities", with a much lower proportion of kids on free school meals. Affluent middle class people are crowding round the best schools. The Trust thinks that "schools, particularly in urban areas, should use a system of ballots - where a proportion of places is allocated randomly - or banding across the range of abilities to achieve a genuinely balanced intake".
But the Trust is mistaking correlation for causation. It hasn't asked two fundamental questions, the first being "what is a good school?", the second "how does a school become good?"
The Trust defines good schools by results, referring to them as "the highest performing comprehensive schools". Good results = good schools. Let's assume that's right (although I personally think "good" is better defined in terms of value added). Now how did those schools become good? Obviously a lot of different things go into the mix - quality of leadership, quality of teaching, quality of facilities; but surely the one which trumps them all is quality of intake (I know the plural of anecdote does not equal data, but my own kids have done very well in a comprehensive in which some of the teaching was terrible and the buildings so depressing and squalid that they would have been a disgrace in 1970s Albania). If a school has an intake in which bright industrious kids well supported at home are over-represented, it will tend to do better than one in which they're under-represented.
So in which section of society are bright industrious kids well supported at home most likely to come from? Why, the middle class of course.
Keep with me here - I'm not suggesting that all working class kids are thick and have feckless parents, or that all middle class kids are all paragons; I'm just suggesting that bright industrious people tend to marry people like themselves, and either become or remain middle class. Not surprisingly, given a triple whammy of genetics, culture and affluence, they tend to raise children who take on their parents' characteristics.
It may not be an especially appealing thought, but we should not be surprised to find that the bright and industrious are over-represented in the middle class compared to the working class. This can only be not true if a) intelligence and industry are not heritable qualities, or b) we live in society that does not reward brains and effort. They are; we do.
So actually the Sutton Trust has got it risibly the wrong way round. There is a link between the middle class and the best performing state schools, but it doesn't work the way the Trust imagines.
The Trust thinks the middle class cluster round the best schools. Actually the best schools are best because the middle class cluster round them.
We will never get educational policy right in Britain while we suffer from this delusion - and Michael Gove suffers from it as well - that all wrongs can be righted if only we can make all schools "good" schools. The Sutton Trusts goals are actually more limited, in the sense that it is only trying to equalise access to "good" schools. But it too is chasing a shadow. If you equalise access the only result will be that "good" schools will start to get slightly worse results and "bad" schools slightly better.
The Trust says, comically, that "lower income students do better when there is a mix of students of all backgrounds in a school". I'm sure they do. The corollary must also be true - that higher income students do worse; and moreover as you reduce the number of higher income students in a school, the lower income students, previously doing better because of them, start to do worse as well. The Sutton Trust are strangely silent about this.
No amount of tinkering will fix the basic problem, which is that a lot of kids aren't very bright, and in any event come from households with a range of dreadful social problems, not the least of which is that the parents didn't get anything in particular out of the education system themselves. The kids are fly enough to know that they aren't going to be lawyers or doctors, but not quite clever enough to be realise that education is not just about money.
What might just make a difference, because of the very large numbers of children involved, would be the abolition of private education. A tsunami of Tarquins and Tamsins would descend reluctantly on the Gasworks Comp. Then you would see some equalisation.
But which government is going to risk that one?
P.S. A very good letter in the Graun the following day from a fellow sceptic wondered whether affluent middle class people enjoy better health because they are treated by "top doctors", or whether leafy suburbs enjoy lower crime rates because they are watched over by "top police officers".
Very pithily nailed. Bah. Humbug.
Thursday 23 May 2013
Star Trek and the wrong sort of growth
I've been reflecting on how the news that the British economy grew by 0.3% in the first quarter of the year will be received.
Here's a prediction. The people who criticised George Osborne for failing to get any growth won't shut up. Neither will the people who said there would never be any growth with his policies. They will just start saying something else.
Yes, the Chancellor will have succeeded in stimulating growth, but of the wrong sort. To misquote the Starship Enterprise's surgeon, Bones McCoy, "it's growth Jim, but not as we know it".
Here's a prediction. The people who criticised George Osborne for failing to get any growth won't shut up. Neither will the people who said there would never be any growth with his policies. They will just start saying something else.
Yes, the Chancellor will have succeeded in stimulating growth, but of the wrong sort. To misquote the Starship Enterprise's surgeon, Bones McCoy, "it's growth Jim, but not as we know it".
Mohsin Hamid and the enthusiastic fundamentalists
The author of The Reluctant Fundamentalist, Mohsin Hamid, wrote a good piece in the Guardian the other day about Western perceptions of Islam. He wrote, "There are more than a billion variations of lived belief among people who define themselves as Muslim - one for each human being, just as there are among those who describe themselves as Christian, or Buddhist, or Hindu. Islamophobia represents a refusal to acknowledge these variations, to acknowledge individual humanities, a desire to paint members of a perceived group with the same brush. In that sense, it is indeed like racism. It simultaneously credits Muslims with too much and too little agency: too much agency in choosing their religion, and too little in choosing what to make of it". You can read the full piece here.
I thought Hamid's article well-argued, though I didn't quite agree with his conclusion, and it reads even more oddly in the light of yesterday afternoon's truly awful murder of a soldier in Woolwich.
It appears that the perpetrators thought of themselves as Muslims. Hacking the soldier to death was part of their "choosing what to make of" Islam, as Hamid would put it. I don't think you can really argue that people should continue to think well of a religion if some its adherents' "lived belief" (Hamid's words again) involves murdering someone who, whatever your views about British foreign policy, cannot truly be said to be personally to blame. A religion has all shades of believers, as Hamid says, but in the UK, curiously, a disproportionately high number of Muslims think it is OK to go around killing other British people (not to mention doing dreadful things to Muslim women). Are we to make nothing of this?
The Spectator rather nobly posted some tweets this morning from Muslims deploring the murder. Again and again I was struck by their tone, which slipped seamlessly from "Isn't this terrible" to "How dare you blame this on Islam!"
In the same way I was struck yesterday by the heroism and nobility of the people who shielded the dying man on the ground, and the woman who got off a coach to engage the murderers in conversation. I have no idea whether these people were Christians or not; it doesn't matter much. Most British people have at the very least a set of ideas about how to behave which they have inherited by a combination of Christianity mediated by the conscience of the Enlightenment.
The police didn't even shoot the murderers stone dead. They shot them in the legs. The shootings have triggered an automatic investigation by the Police Complaints people. The murderers are being treated in hospital by the very best medical care the NHS can provide. If they survive, they will stand trial by what is still on the whole a pretty good criminal justice system, represented by really clever and scrupulous people who will try to get them off. All these things will be paid for by a system of government - itself a fructification of post-Christian ideals - the murderers (and many like them) utterly despise.
By their fruits shall ye know them, I believe it says somewhere in the Bible (not that I have ever read it); and this is true of all religions and all people, all the time, all over the world. It seems to me Mr Hamid has some more thinking to do.
I thought Hamid's article well-argued, though I didn't quite agree with his conclusion, and it reads even more oddly in the light of yesterday afternoon's truly awful murder of a soldier in Woolwich.
It appears that the perpetrators thought of themselves as Muslims. Hacking the soldier to death was part of their "choosing what to make of" Islam, as Hamid would put it. I don't think you can really argue that people should continue to think well of a religion if some its adherents' "lived belief" (Hamid's words again) involves murdering someone who, whatever your views about British foreign policy, cannot truly be said to be personally to blame. A religion has all shades of believers, as Hamid says, but in the UK, curiously, a disproportionately high number of Muslims think it is OK to go around killing other British people (not to mention doing dreadful things to Muslim women). Are we to make nothing of this?
The Spectator rather nobly posted some tweets this morning from Muslims deploring the murder. Again and again I was struck by their tone, which slipped seamlessly from "Isn't this terrible" to "How dare you blame this on Islam!"
In the same way I was struck yesterday by the heroism and nobility of the people who shielded the dying man on the ground, and the woman who got off a coach to engage the murderers in conversation. I have no idea whether these people were Christians or not; it doesn't matter much. Most British people have at the very least a set of ideas about how to behave which they have inherited by a combination of Christianity mediated by the conscience of the Enlightenment.
The police didn't even shoot the murderers stone dead. They shot them in the legs. The shootings have triggered an automatic investigation by the Police Complaints people. The murderers are being treated in hospital by the very best medical care the NHS can provide. If they survive, they will stand trial by what is still on the whole a pretty good criminal justice system, represented by really clever and scrupulous people who will try to get them off. All these things will be paid for by a system of government - itself a fructification of post-Christian ideals - the murderers (and many like them) utterly despise.
By their fruits shall ye know them, I believe it says somewhere in the Bible (not that I have ever read it); and this is true of all religions and all people, all the time, all over the world. It seems to me Mr Hamid has some more thinking to do.
Tuesday 21 May 2013
David Cameron, Bruce the Shark and the Stupid Party
What on earth are the Tories doing? Have they taken leave of their senses?
Firstly, they're in a coalition government. Of course David Cameron can't do everything he wants. Get over it. And as things stand it's perfectly conceivable that with a slowly improving economy, a Labour party with no convincing economic policy and a Lib Dem vote that will surely collapse in a heap, they could win outright in 2015. Would they prefer Cameron to throw the dice in the air and call a snap election now?
The Tory backwoodsmen rather remind me of Bruce the Shark in Finding Nemo. "Fish are friends, not food", Bruce mutters to himself repeatedly. And it works until he smells blood. Thus the Tories over Europe. Scenting the possibility of an In-Out referendum, the red mist has descended and common sense thrown to the wind. Not for nothing are they known as The Stupid Party.
Firstly, they're in a coalition government. Of course David Cameron can't do everything he wants. Get over it. And as things stand it's perfectly conceivable that with a slowly improving economy, a Labour party with no convincing economic policy and a Lib Dem vote that will surely collapse in a heap, they could win outright in 2015. Would they prefer Cameron to throw the dice in the air and call a snap election now?
The Tory backwoodsmen rather remind me of Bruce the Shark in Finding Nemo. "Fish are friends, not food", Bruce mutters to himself repeatedly. And it works until he smells blood. Thus the Tories over Europe. Scenting the possibility of an In-Out referendum, the red mist has descended and common sense thrown to the wind. Not for nothing are they known as The Stupid Party.
Monday 20 May 2013
Enjoying Luhrmann's Gatsby
Much against my better judgment, I allowed myself to be dragged out to see Baz Luhrmann's version of The Great Gatsby on Friday night. I'm not really a Gatsby fan - Fitzgerald is a great stylist and the book is beautifully written, but I find it a little slight; and I suspect there probably are second acts in American lives, no matter what its author claimed.
Off-puttingly, Luhrmann's version has been widely panned by the critics; and I don't think he has made a really good film since Strictly Ballroom (no shame there - it's a hard act to follow), and what he might do to Fitzgerald's novella seemed in prospect analagous to Meatloaf being let loose on Dove Sono.
But funnily enough art does retain the occasional power to surprise, and I enjoyed The Great Gatsby very much.
Firstly, it doesn't pretend to be a faithful adaptation; rather a new version conceived in filmic terms.
Secondly, the acting is fantastic throughout - Carey Mulligan as Daisy bewitching and capricious; some bloke whose name escapes me playing her husband with just the right mix of nastiness, sexual potency and charm; Tobey Maguire is jejeune as Nick; and Leonardo DiCaprio brings just the right suggestion of fraudulence to his Gatsby .
Thirdly, it looks great, with the party scenes imagined and realised with tremendously exaggerated pizzaz.
Off-puttingly, Luhrmann's version has been widely panned by the critics; and I don't think he has made a really good film since Strictly Ballroom (no shame there - it's a hard act to follow), and what he might do to Fitzgerald's novella seemed in prospect analagous to Meatloaf being let loose on Dove Sono.
But funnily enough art does retain the occasional power to surprise, and I enjoyed The Great Gatsby very much.
Firstly, it doesn't pretend to be a faithful adaptation; rather a new version conceived in filmic terms.
Secondly, the acting is fantastic throughout - Carey Mulligan as Daisy bewitching and capricious; some bloke whose name escapes me playing her husband with just the right mix of nastiness, sexual potency and charm; Tobey Maguire is jejeune as Nick; and Leonardo DiCaprio brings just the right suggestion of fraudulence to his Gatsby .
Thirdly, it looks great, with the party scenes imagined and realised with tremendously exaggerated pizzaz.
Lastly, Gatsby does something so difficult to accomplish, either in literature or film - it shows us a relationship breaking down. Like most relationships, there isn't just one thing that kills Daisy and Gatsby's affair, but a succession of small circumstances. I found it utterly plausible.
There are as many potential versions of Fitzgerald's novella as there are readers. Get over it, critics. For all but the box tickers amongst you, Luhrmann's film is a thoroughly satisfying night out.
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