Education, Or Something

My alma mater is not one of your ivy clad listed buildings laden with ancient symbols and festooned with reminders of past elites. It is now a collection of the grimmer examples of building of the last 120 years or so, and whilst architects may have been involved in some cases, my bet is that they took the money and ran. In my time there were only two, but the establishment has spread like a nasty rash over several blocks over the many decades since.

There are a small number of portraits of those who presided over it in the past. All were and are good and worthy gentlemen, and those who look up at them have no idea of who they were and why their pictures are hanging in this most forlorn part of the oldest building. It could be the Easter Island of central London.

But one thing is certain, the place lays claim to be a major player in The Knowledge Economy, and as the economy as a whole is shrinking, and the fiscal consequence of the crunch take effect, they are very worried. It is not just that so many graduates this year will not be getting the jobs they hoped for when they started, and for many there will never be that many jobs available ever again in the relevant sectors, it is more difficult than that.

Like many other UK colleges, it has come to rely on a great many foreign students taking up places, and paying maximum fees. Clearly, given the situation it may well be that the numbers may drop sharply. There are adjustments, downwards, taking place in many higher educational establishments. In the meantime, it appears that 50,000 UK school leavers who would have gone into a job or something are looking at other options, including any old university place that might be had. But because of the way the budgets are looking, they are not available.

So the cry is on, that for the sake of The Knowledge Economy, which they claim will be critical to the economy of the future, the universities should be bailed out to take on all these students to fill up all those vacant places in media studies, creative accounting, various sorts of sundry business things, and a whole new raft of social and public sector spin offs that arose in the last couple of decades.

To pay for all these marginal entrants to universities is a hugely expensive gamble, if it is the state and the taxpayer who will pick up the bill. One way or another it is a very bad form of unemployment relief. Either paying for them, or requiring them to fork out for three to four years of study in subjects with no guarantees at the end, and may be in activities that have been post dated by the time they qualify, is not exactly “investment” in either the Knowledge Economy or any other.

The salient problem is that the universities and their idea of Knowledge (trust me I’m a philosopher) lies signally in the past. My alma mater, while apparently trying to keep up with all of this and that, does seem to be rooted mentally in a kind of late 1990’s, turn of the millennium mind set as to how things could and should work. But things are changing fast in so many unexpected ways.

There are some bits of stuff that still remain from my early education of sixty years ago. Latin grammar is much the same, but English seems not what it was, if you know what I mean. A great deal else has changed radically, and not just once, I have had to readjust patterns of thought and basic assumptions too often to be sanguine about knowing what I think I know. What I am sure about is that the pace of change is increasing. It is going to be a rough ride in the next decade or two and I will have to make many more changes in mindset and world view.

It is likely that very many higher educational establishments could face problems of contraction that will be difficult to manage. For my own alma mater, it is all too likely that it will be the oldest buildings that will be the first to go, and nobody at all will miss them.

Development Is Unsustainable

Posted by Luis De Sousa on the “Oil Drum” web site on Saturday 11 July 2009, it is saying something most of us have forgotten, that the planet is finite and so is our future.

The post says:

"The other day I got an e-mail from someone with The Economist asking me to participate in an on-line forum/discussion on that science fiction figure called Sustainable Development.

Someone at this popular economics publication followed the series on the European Elections that was published here and at the European Tribune. This time, instead of graphs and analysis, I opted for something a bit different.

Consulting an on-line Dictionary, a definition for Sustainability can be retrieved as the ability to perpetuate existence. In the same resource the definition for Development will be given as growth or progress. A concept gathering these two words together forms what the Greeks termed an oxymoron, an idea devoid of logical sense. Can Sustainable Development be sustainable? Naturally not, for merging together two antonymous concepts, it simply cannot exist.

So why is this oxymoron in the order of the day? Why does it get such attention? Why are so many so willing to discuss it so passionately?

Sustainable Development is one of several philosophical concepts (having as much eeriness as mythology) that emerged in the wake of a series of decades of breathtaking, unprecedented growth. Growth as in development, the physical expansion of the Human-sphere, its population and interactive processes with nature, harnessing energy and concentrated matter, deploying waste heat and dispersing matter. These mythological concepts are simply a reflex of a society intoxicated with growth in front of the first signs of physical constraints to its development.

Sustainable Development became the language of those that promise perpetual growth, and more, the profits that should come along with it. It is the language of those that do not want to reconsider their way of life. Of those who expect the XXI century to be the same as the XX century. Of those that expect to run all the cars on french fry oil or firewater. Of those who call Carbon Capture and Sequestration an energy source. Of those who promote the Hydrogen Economy, forgetting about the Nuclear energy system for which it was conceived. Of those touting Nuclear as Salvation. Of those touting Nuclear as Condemnation.

Of those who expect Carbon Trading to reduce the OECD's dependence on OPEC. Of those dreaming with a CO2 atmospheric concentration of 1000 ppm by 2100, accompanied by a 6ºC global temperature rise. Of those saying that the Earth's hydrocarbons are not fossil fuels. Of those drilling their way forward. Of those waiting for the Free Market to replace Fossil Fuels. Of those thinking all they need is changing light bulbs to continue living in 400m2 cardboard houses. Of those claiming to be in their hands a reduction of Fossil Fuels consumption.

Sustainable Development is the philosophy of those fooling themselves, thinking that the Earth is flat, refusing to accept that the planet is a spherical object and thus finite. Of those refusing to face reality, refusing to wake up from their dreams.

A decade from now Sustainable Development will be out of the agenda. By then the word of the day shall be Survival. The Survival of a Culture, a Social and Political Framework, a Civilization.
Hopefully some will be able to wake up in time, leave the intoxicating dreams behind and face reality, however grim. Because then they'll be able to devise a New Future. A Better Future. A Future founded on the real physical entities that run through our Economy, not in abstract, growth dependent, illusions. A Future where each man and woman have their place and are not enslaved by a spiral of virtual accumulation and spending.

A Future where having more than the next man isn't a goal in itself. A Future were work and excellence are rewarded by things that have real physical and meta-physical meaning.

A Future."

Racking And Rolling The Swiss

Whilst all this grim and stupid nonsense has been going on in the UK media, there is much bigger and more important business out there, and not only in the wastes of Afghanistan. The USA is still running a real financial crisis and now needs to look for money fast; especially what it thinks is its own money. How long will it be now before the USA Marine Corps are marching along the Ramistrasse in Zurich, singing as they go a variant on their old marching song?

“From the streets of Old Manhattan to the banks of the Zurichsee,
We have demanded all our tax returns, for the dollar currency.”

It seems that the President is after tax information, spurred on by the increasing deficit in the fiscal situation, and his main target is the Swiss UBS (Union Bank of Switzerland) which has been advising many of the high wealth Americans of ways and means of paying little or no tax. The key is what arrangements are made and what devices have been employed, and more to the point how do they avoid or evade US tax laws.

For this the US Internal Revenue Service (IRS) wants the essential information, but citing Swiss Banking Law, the UBS is unwilling to divulge the names of its clients, let alone the details of their financial situation. The Financial Crimes web site, at the alexmasterley.blogspot.com has been commenting on this, and it could be getting ugly. One issue is if the USA will confiscate the UBS operations stateside. That would really throw the fondue in the fan.

What is interesting is why the USA is going after the Big One at an early stage, and not one of the many smaller entities closer to home. There are enough dotted about in the Caribbean area, and elsewhere for them to lean on. The trouble there is that it would mean taking on the UK. Clearly the Crunch situation means that they will have to take care in the Pacific area, so it may be if they can force the Swiss to back down, the US will then begin to roll up the rest, and then leave just a few awkward cases to be dealt with in detail. It would also give the USA a moral victory over Europe, in that much of the Swiss operations are linked to others just across their borders.

In the meantime the UK government have had to come up with a scheme for new regulation, and whiles brave words are being spoken, the reality is the usual rare muddle of political fixing married to the desire not to offend the bankers too much, only just enough to persuade some voters that the proposals are for real. The truth is that the proposals are a mess, and will create a worse mess. They ought to be worried, because if I was in Washington DC, after Zurich, my next major target would he the City of London, scene of some of the most rampant and unprincipled malpractice in the financial world, aided and abetted by the Treasury, the Bank of England, the regulators, and the media.

Personally, I have some affection for Switzerland. Back in 1951 on my first visit during a time of rationing, uncertainty, and shortages in Britain, I saw a world where it could be clean, food was to be had, and you could just go into a shop and find something to buy that wasn’t shoddy or cost the earth. Moreover the efficiency of the railway was astonishing, and electric. Back in the UK the newly nationalised British Railways were throwing the investment budget on bigger steam engines for selected prestige main lines and to hell with the rest of the system.

In fact my favourite TV programme is Swiss Railway Journeys on Sky TV Travel, a lovely world where things work, it is all localised, devolution is real, and is spoiled only by a few banks that have picked up nasty habits from other countries. If the Swiss government really wants to face up to America then it should ask its banks to hand over all the information, and copy it to the international media. The fall out from this would be spectacular.

Then we could all sit back and watch the fun.

Elections, Summits, And Spin

The downside of a long memory is the occasional waking nightmare. Could it happen again? Could a no hope unelected Prime Minister who ran a government in real trouble come back to win an election that everyone expected him to lose?

In January 1957 after the disastrous venture into Suez, Eden had resigned and Harold Macmillan took over. For the media and the general public it had been assumed that Rab Butler would be PM, but insiders and party placemen ensured that it was Macmillan as the “safe” option, and even he wondered if he might last only six weeks given the mess he had inherited.

Despite the turmoil, Macmillan hung on, and began to establish himself in the media as a bluff, cool headed expert man of the world, who knew his way around. Quite unlike the busy, worrying modern technocrat determined to change everything that Hugh Gaitskell appeared to be. Having seen them both at close quarters before gatherings that were knowledgeable and critical, my view was that Hugh was more honest than most in many ways but dogmatic and flawed in his simplicities. Harold was a neurotic shyster.

The economy turned down sharply after the post Suez oil shock. The nuclear protestors were gaining strength and others were anxious. Some progress had been made since 1945 to increase secondary education, but now it was demanded for all. Race riots had occurred. Local elections were going Labour’s way, and the media was unsure and uncomfortable with government with thirty five Old Etonians, unelected peers, and others who seemed to be appointed for money and not merit. There were suggestions of cronyism and too great a closeness of financial interests.

In the Autumn of 1957 there was a serious flu epidemic, Asian Flu, related to our modern swine flu, or so I am told. Then at the beginning of 1958 three key finance ministers resigned as a consequence of Macmillan’s plans to push money into the economy, which they believed could increase inflation. Macmillan’s view was that a small annual dose of inflation could not do much harm. Nor could tobacco smoking, which gave the Treasury a lot of its tax income, despite suggestions otherwise, which Macmillan stamped on good and hard, to the applause of his tobacco baron friends.

During 1958 and 1959 Macmillan flew about, devolving power to colonies, with a few economic strings attached, getting close to President Eisenhower and signing nuclear agreements committing the UK long term, for which he was called, satirically, “Supermac” by Vicky the cartoonist. He was saving the world and restoring our Great Power status, at the same time as running down the conventional forces. There were problems with Iceland, and over in Europe there was a Treaty of Rome, creating a Common Market, which he assured us, would not have implications or consequences for the UK.

The media did not know what to make of it all, and it left Gaitskell and his team scratching for attention. The BBC gave us a relentless diet of Lord Boothby as an ikon of culture and custodian of national identity. They did not mention his friends, the Kray brothers or any other inconvenient truths, nor the close encounters he had with Mrs. Macmillan. Not a hint of critical comment passed any of their lips. ITV, on the other hand, were anxious to convince us that the Esso sign meant happy leaded motoring, and that consumerism was good.

Macmillan’s government continued to spend their way out of trouble, rock and rolling their way, they said, to a rich future for us all, we would never have it so good. The miseries who looked at the figures and the way the world worked knew it could not and would not last. But that did not matter.

Because in October 1959, against all the odds of barely a year before Macmillan romped home in the election, and the real crisis of Britain’s future began.

Can You See By The Dawn's Early Light?

Just how independent is the USA? Like most parts of the world a whole lot less than it used to be, much less than many of its citizens believe, and it may now be arriving at the point at which its constitution may be adjusting, informally, to the world as it really is. The major source of energy and the primary base of much of its industry is oil, and it is now around thirty years since the USA was self sufficient.

The USA moved into the car and truck age long before other nations. During World War II, when many developed countries had their capability reduced, the USA even expanded. The whole way of life now depends on fuels for vehicles. So does the food supply chain, not just in distribution and delivery, but in the actual growing of crops with all the pesticides and fertilisers.

The USA needs and will need more food as its population grows. In the past the USA may have been one of the bread baskets and major food exporters of the world, it will not be long before it will begin to import, and then depend on stocks from other countries, especially if for either climate or soil degradation reasons the yields begin to fall from its own fields. Also, the way things are, it could take only one scientific blunder by Monsanto to wreak havoc in the food industry. Is anyone taking bets?

Follow the money is an old American proverb, but since World War II the money, in international terms has followed America, in the shape of the dollar. It used to be the pound sterling, until the UK went broke during World War II, and amongst the reasons for seeking freedom around the old Empire, getting away from the pound was one of the more important considerations. The USA is now a debtor nation, and a big one, and the money markets through history do not like to depend on a base currency that relates to an economically unstable, unpredictable, debt laden state.

As the drift away from the dollar gatherers pace it is not easy to predict the results. Certainly it will reduce US influence, and require it to take more account of others. For many countries the uncertainty of the currency markets will present real issues of policy making about their economic future. For all the talk of this, that or the other, it is possible it might all become very unstable, with the USA being one bidder amongst many for whatever funds might be available.

For finance as a whole, for a time Wall Street and the City of London have called the shots, and between them turned all the world’s banks into one big system. Now it could be that neither can do this as much of their banking sector is nationalised, and under severe stress. If others can control the money, you cannot be independent. Especially, if for your energy, your food, your consumer goods, and a lot else you are reliant on imports.

Enjoy the holiday, cousins.

Paying The Pensions Piper

Long ago, there was a radio programme “Round The Horne” in which one character was Rattling Sid Rumpole, a Kenneth Williams skit on TV and Radio gardeners and rural types. His catch phrase was “Arrgghh, the answer lies in the soil.” Applying this philosophic principle to pensions comes up with “demographics” in place of soil.

I have said about many things, “But we saw this coming….” Alas, many except the politicians and media types. For the public sector pensions, finance thing, it is “Been there, done that". Many of the pension schemes were in place many decades ago, and whilst they did allow people to leave early, there were no added years except in the case of serious illness, when a modest number were allowed. In those days it had to be terminal or nearly that to get one. By and large employees were expected to serve their time.

A good many did not make it to retirement age; and of these the men lasted only an average of about 4/5 years Pension Payment Years after 65, and the women 14/15 after 60. In any case many men did not get in the full years of entitlement because of military service or some such and few women did the full number of years or anything like it in an age when marriage and children meant that you did not work.

By the beginning of the 1980’s because of money and staff reductions the question of early retirement came to the fore. With the strength of the unions, one means of relatively easy staff reduction was to let staff go early, often with added years and extra lump sum payments. Additionally, the medical conditions for departure for illness was relaxed, which added to the numbers drawing invalidity benefits. So when early retirement came onto the agendas as an easy and popular way of getting the numbers down, there was a Gadarene rush by unions and politicians to go for it, and to hell with the figures, the future would take care of all that.

By the 1980’s, however, the demographics certainly were changing in several ways, a key one being the increase in the expectation of life and it was clear even then to those who could do basic arithmetic that the various pensions schemes were going to come under pressure. Quite simply, the total of Pension Payment Years for all those on the books was already rising steadily and the trend was likely to last for some time. Add on almost automatic early retirement, and given that many of the early retirement schemes allowed people to go at 50 instead of 60 or 65, you can see what was going to happen. Then relax the rules and criteria for “sickies” and away you go.

So a man who goes in his early fifties might get 25 or more years of retirement in, and a woman 30 to 35 often at close to full entitlement. Whilst in the past the monies paid in by those in post could cover the totals needs, in a world where very many will not go into such a job until their early 20’s, or even later, then the sums paid in will not go near the sums paid out.

So it is not working any more and huge deficits have built up nationally and locally. Instead of facing this and putting in place some sort of controls the Government has simply given away more in the public services and all the schemes are technically insolvent. Government borrowing will have to take the hit one way or another, because the money is not there from taxation, nor from the existing employees.

It adds to all the other severe pressure on borrowing, and cannot be covered by forcing captive banks to buy treasury bonds, although the government have been leaning heavily on those public sector pension schemes with funds to do so, but some operate on the "running bath" principle. However, this only means that the returns to those funds are impaired by effectively lending to the government at below real market rates. This “Enron” tactic is at best only a quick temporary fix. It cannot be a long term solution.

After the Government hit the private pension schemes (except for the seriously rich) and tinkered with other parts of it, the old occupational pensions have almost gone, as the actuaries, accountants, and others have calculated the consequences. The present government are unlikely to do much because a remarkable number are entitled to public sector pensions as well as their political ones, often at levels that are augmented by their previous employers to way beyond the actual level of work they did. Also, a good many of their relations and friends are set to benefit as well.

So if you think that those parliamentary expenses were a profitable racket, think about their extra pension funds and entitlements from before they were elected or appointed to Parliament, and protected by convenient privacy arrangements.

Fare Dodging For Franchisees

So, let me work this one out. The taxpayer is down for £700 million as a result of the fiasco over the National Express franchise for the East Coast main line. It is said that it grossly overbid for the franchise contract on the basis of annual passenger growth of 9% up to 2015 or whenever. Was that compound I wonder or simple? Or didn’t they get round to that one? Even so, it is a huge increase, obtainable only if prices could be reduced in real terms, if not nominal. But the fares went up, didn’t they, because of the liabilities arising from the auction system and its costs inspired by the government? As well as the restructuring of fares, which amounted to another increase, and the racking up of any additional charges.

The Prime Minister is a man from Fife, National Express is part of a very Scottish company which flits about politically according to where benefit lies, and the Chief Executive of National Express has suddenly left to spend more time with his toy train set. He is a Mr. Bowker, who has a great deal of financial and political experience, but when asked about coupling trains thinks that you are talking about leasing them rather than moving them. Moreover he has hung around with the Blairs, sharing an interest in ancient pop music and imaginative financing.

The way it has worked has been to up the costs of travel, notably to the poorest, pour zillions into the pockets of all the usual financial entities, and put a hefty tax on real travel by rail. From time to time I need to travel by rail, so yet again, I will be paying for all this nonsense. And the reason for the “Flying Scotsman” picture is that once long ago, I worked on a former LNER station where A3 class locomotives were based, including that particular one for a short period.

The men I met then had been there before the nationalisation of 1947, but some before the rationalisation of 1923. They gave a lifetime to the railway, yet they earned less in their working lives than Bowker did in a month.