Age Shall Not Weary

According to The Times, I am now a “financial time bomb” and unless defused will cause the economy to flatline.  Whether this means that it should become policy to cause persons of my age profile to flatline before that happens is not certain.

In the last week or so there has been more attention paid to matters arising from dealing with the elderly who need support.  Inevitably, much of this has centred on human interest stories. 

Less mention has been made of the Equality and Human Rights Commission recent report called “Close To Home, An Enquiry Into Older People And Human Rights In Home Care”. 

The report attempts to bring together the Commission’s view for its future policy and guidance about Equality, Disability, Diversity, Care management and Human Rights for the elderly in need and who are disabled. 

Yes it is very expensive with many and various implications that entail costs, duties and obligations.  The question of who pays and how is left to others to worry about. 

Necessarily battle has been joined over whether the aged with assets should be given free or limited cost care allowing their wealth to be passed on to family or others or whether those assets should be used to fund the care requirements.

One of the oddities that goes unremarked is that amongst the aged are many whose periods in education were much shorter and who worked for much longer than those of later generations are likely to.  But to discuss this would simply confuse the key issues.

Historically, we have never been here before, which makes a change for this blog.  In the past with the expectation of life being much lower and few people being able to appreciate assets in the way we have done the numbers of aged needing care were far smaller and the few who did have assets were expected to use them.

From my extensive scratching around Census Returns of the past looking for this and that the common practise was for the aged to be with their families, normally used on light household duties.  Some of the poorest did finish up in the Workhouse. 

Some continued in work, one of mine seemed to be still employed into his nineties, perhaps urged on by his much younger third wife.  Well it was Leith which might explain it.  There were a few with assets often listed as “annuitants” which meant that the wealth lasted only as long as they did.

But the better off then could hire servants and the less they could do then the more servants and nurses they employed.  If they were renting, as was common at the time then the notion of property as assets was tempered.  Also the property market in those days was radically different.

At present in the district where I live there is a stark contrast.  There are hardly any aged who are Brit’s living with their families.  But amongst recent migrants there has been a striking increase in the number of families who have brought in their aged parents to be amongst their UK kin.

Which raises an awkward and interesting question.  If all care for the aged is to be borne by the taxpayer then many migrant communities will be paying for old Brit’s to be supported by their taxes whilst they themselves take care of their own.  Did anybody see that one coming?

Another difficult question is who are the carers?  At present the care for most either in residential facilities or their own homes appears to be done by part timers or agency workers earning very modest incomes, having had limited training and given very tight schedules.

Moreover, they are becoming in short supply relative to need.  So not only may the money not be there to fund all this, there isn’t the man (or rather woman) power there to do the job effectively.  The resources locked up in all this are alleged to be so much as to damage the working economy.

As in so many things, there are no “right answers” to any of it.  All we have is a number of options all with “downsides” that are both problematical and in some cases impossible to resolve to the satisfaction of all parties.

This one is going to get rough because the pre-conditions are in place for a social, economic and political disaster.  See you in the Job Centre.

What Do You Think About This?

Having had the serious part of yesterday seeing what happened in The Tour de France time trial it was time to wind down.  A Jessye Norman reference in the TV guide looked like an interesting musical item. 

Wrong again it turned out to be Jesse Norman, male, at the Hay Festival talking to Daniel Kahneman (see Wikipedia).  He is a Nobel Prize winner for his work in applying behavioural psychology to economics. 

He did a spell as a conscript in the Israeli army which would have been useful to him in his later work.  In an army there is a reason for everything which determines how you are expected to behave.  This is always irrational.

His work is extensive and complicated and arising from a basis in another discipline suggests that many essential assumptions in economics and amongst economists are untenable in practice and unworkable as any basis for policies. 

When I was told fifty odd years ago that econometrics, mathematics based economics was the certain future, I had doubts.  It is a pity that too few others did.
  
After that relaxing hour a programme on another channel caught the eye.  It was on the PBS channel from America, one of a series covering the financial meltdown of 2008.  It concentrated on the collapse of Bear Stearns, the failure of Lehmann and the bail out of AIG. 

It was entertaining to see so many of the best and brightest in Wall Street and Washington DC getting it so badly wrong.  They gave London a good run for the money in the quest for turning shambles into disasters.  Underlying the coverage was the constant question, why did they do this?

Whilst Kahneman’s work would not give the precise answers his thinking about how individuals make economic decisions, the imperatives which drive people and the force of group think offered many insights.

Now it is becoming increasing clear that the idea that the figures have been constantly fiddled big time and people led to or dragooned into believing them is not just the cynicism of the few but the reality of what has been happening.

So not only did all the governments and related authorities know little in terms of having the technical expertise of working experience in the areas of finance that went wrong, but most of the data on which they claimed to be making rational decisions was hopelessly flawed or faked.

In any case their brains were not set up for rational thinking in the first place.

London's Sticking Point

On Saturday, there was another trip up to London, but it will be three months with nothing in the book for any more.  Whether there is a sense of relief at not having to make the journey or that something is being lost is not clear.  But it does mean avoiding any of the implications of the events in the coming weeks.

In the media generally there has been a kind of Cavalier versus Roundhead debate about London and The City.  Some mourn the progressive loss of the distinctive London skyline and visual character. 

Meanwhile Boris Johnson and others proclaim the Shard building as the marking the rise of the new Imperial London, albeit one largely owned by foreigners of foreigners and for foreigners. 

The Cavaliers claim that the “new” London is far better than the old ones and confers prosperity on all who live there and for that matter the whole of the Atlantic Isles.  So making London bigger has to be good and therefore huge public monies should be directed into huge projects that will confer added rents to all who benefit.

Whether they entirely agree with that in Dublin at present, or in Wales where the weather is inflicting damage on tourism, or in Edinburgh when all they have to offer against all the major infrastructure projects in London is a tramline that is going nowhere in particular at vast cost.

There was a proud statement that of the expected 12,000 plus persons that would be employed at The Shard a whole 150 plus jobs would be reserved for the locals of Bermondsey, largely in cleaning and maintenance work.

One major reason for the surge of money coming into London is “capital flight” whereby wealthy persons living in other jurisdictions in financial trouble try to move their money to somewhere, anywhere, where the value might be retained during the upheavals.

What the Roundheads argue is that large scale inflows of money can be disruptive and damaging in very many ways.  If the receiving country has a finite amount of land or assets they will inflate in value.  If it does not produce the consumables that the extra money requires then the balances of trade will be affected.

Then when or if the dust settles this money moves on, action breeds reaction; thesis, antithesis and synthesis and all that; or just straightforward chaos.  These days it can go out as fast as it came in, notably if there are plenty of rival financial centres to choose from.

Also, the Roundheads point to the impact on the businesses and other key services that are useful, profitable to both the UK and world trade.  This is where there is real and valuable work done in the City, substantially disregarded by the financial game players and their political fan clubs. 

All I know at the moment is that my “investment” in London is sharply down on the past and will not revive.  It is the same for many other people.

Confidence Trick Or Treats

The BBC ran a three part series, “The Strange Case Of The Law”, on how the Law of England developed since the age of the Anglo Saxons and how so many of its features were exported to the wider world.  Harry Potter was the presenter, this one being a barrister engaged in Criminal Law.

It is a long and complicated history but the series did manage to distil the essence of it.  On the whole it used to be regarded as a “good thing” which made trials fairer, the law better and its management understood by both the experts involved and in general by the great majority of the population.

But in the final few minutes of the series came the bad news.  One of the most senior and able judges more or less said that with recent legislation our noble and learned judiciary have difficulty in understanding it and even more trouble trying to apply it to the cases that come before the courts.

There are three key problems.  One now is the sheer length and extent of new Acts of Parliament.  Another is the complexity of the many sections, schedules and clauses etc. 

The third is that the structure and language use do not clearly set out what the law is.  They are often descriptive and allusive and assume that philosophical ideas can somehow become enforceable and explainable law.

So if our Parliament no longer enacts workable laws, which it is paid to do and that it why it is there, why is that happening and what are the effects?  Major reasons why it is happening is that an out of control Civil Service is churning the stuff out wholesale rather than retail. 

Another is the tidal wave of regulation and directives from Brussels, very long on words and very short on clarity.

In a way I was glad to see an eminent judge admitting that when faced an Act consisting of hundreds of pages, thousands of parts and an untold number of words he is often defeated by the struggle.  If he cannot cope then nor can I nor almost all of the population that is educated or managing things or both.

In other words the legislative diarrhoea that we have had now for most of the last two decades may well have begun to destroy the real basis of the legal system and worse any confidence that the electorate may have in it or its practitioners.  As well as that those that run things then those who are the doers are all at a loss.

Without confidence in the law itself, little in the government, less in Parliament and almost zero in all the other agencies engaged in governing then the loss will become all pervasive.  When we then also lose confidence in our financial system and our public utilities then we lose any vision of community or nationality.

It is then that the unscrupulous power brokers and political and financial confidence tricksters take over.  If they take over our media as well then it is certainly goodbye to any coherent and effective body of law.

If history is any guide it tells us that our political systems cannot last and it is goodbye to any real form of democracy as well.

The Land Of The Fee

Today is the 4^th July, Independence Day for the USA, possibly one of the last few it will have left that has any meaning for most of its population.

There is an election campaign going on that will hand a four year term to whoever wins it in November, take over day in January.

There are now two leading candidates who are likely to contest it.  One is President Obama for the Democrats and the other Mitt Romney for the Republicans.

Some argue that as President Obama was not born in the USA this should disqualify him.  But does the actual location of birth matter that much if he lived his life there and enough voters want to have him continue as President?

In the case of Mitt Romney, however, former Governor of Massachusetts there is a more interesting question.  It asks where is the money?  Is he paying anything like the tax he might be?  Has he extracted rather more than he has put in?

In Vanity Fair there is a major article going into all this and taking a long hard look at what can be found.  It is a substantial article that takes careful reading and a little time.  It might give the Washington DC Internal Revenue Service, pictured above, something to think about

http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts

This is the way the world goes and where the power might go.  So does the USA want more of this or less?  Much the same kind of thing happens across the world and in most states many leading figures will be engaged in similar financial operations.

If only Nicholas Shaxson and others could tell us more about just what our own UK politicians have been doing with their money and how.  We would learn a lot about the UK and much more about the way we seem to be going.

With the UK tax agencies being run as a back office of the major accountancy firms this does not seem likely.

Learning Curves

Over at Tax Research and Richard Murphy he comments on the appointment of Ian Barlow, a KPMG man, to head the HMRC, our office for the income tax, revenues and the rest.  He points to some interesting features of KPMG during Ian’s time there and wonders what kind of fit this is in being the UK tax boss.

KPMG are located in any tax haven worthy of the name and are one for the leaders in the field of arranging tax avoidance packages and other funny money deals.  But he may be a poacher turned gamekeeper or a latter day Paul of Tarsus falling off his horse whilst riding round Chipping Norton.

If this one happens, then you would certainly have heard it here first.  Is Bob Diamond, formerly of Barclays, now a shoe-in to be the next Governor of the Bank of England in succession to Sir Mervyn King?  Expect the announcement on the day of the 100 metre finals at the Olympics.

The Bank of England could certainly do with repositioning as we call it in the public bar.  Making it a major profit centre for The Treasury with a brief to keep the UK at the forefront of trading invented stock and adjusting interest rates to suit would do wonders for the economy, one way or another.

It may be time for some imaginative initiatives for the City of London because there are those who think the future may not look too bright.  If you have two minutes and twenty three seconds try this link from Jack Crooks in Money and Markets:

http://www.weissmoneynetwork.com/the-u-k-and-the-british-pound-are-in-the-crosshairs-46296?mam

The question then is what to do with Sir Merv’?  Obviously put him in charge of something big, hopelessly disjointed, failing, pushing families into debt and spending vast amounts of the taxpayers money.  Yes, make him Tsar of Education! 

Well, maybe not a Tsar in view of what happened, perhaps Viceroy might be a nice title to pluck from the past.  One area badly in need of vigorous reform is that of the teaching of mathematics.

In line with modernist educational practise, we could encourage our youngsters to go in for Creative Mathematics and hope we might nurture a generation of creative accountants that would help to maintain the City of London and the UK at the centre of the global financial system.

Taking the picture from Zero Hedge, the government could call it the Mary Poppins Policy.

Telling Tales

Um, let me try to work this one out.

The government have been subsidising financial institutions to fake the interest rates to enable money flows that enable the government to do things off balance sheet that enable it to fake the data on which they base economic and budgetary policy.

This is why I pay more in taxes, why my savings earn interest rates at the lowest level in my life, why my obligations to a whole raft of service providers increases in cost more than the posted inflation figures and why when moving money it is taking several visits to the bank to persuade them to let me use my money.

This kind of thing is supposed to be new.  Those of us who have delved into the history of economic crashes, financial malpractice and money know that for long before the 20^th Century this was the norm, notably in Britain and Ireland.

It took two world wars and the huge disruptions that followed to put in place laws and arrangements that were rather more reliable and equitable.  The more open politics and the demands of ordinary people with votes helped towards this.

Then we threw it all away in the final quarter of the 20^th Century.  There were many reasons for this.  One was the consolidation of the media and its merging into the structure of politics.  The other was that we were offered an impossible future.

Power was not for the ugly, the academic or the plain ordinary man or woman.  It was for the pretty, the persuasive and the pampered who offered us easy money and easier living, all of which we now have to pay for.

In some parts of the media there are commentators who are telling us to blame ourselves because we liked it that way.  Some of us did, many of us were told we had no option.  In any case our children were targeted to demand more.

What also was lost was the moral imperative that affected much of politics in the middle years of the 20^th Century.  It was always a tenuous proposition and often politics was at the margins of it but there was enough to remind us of folly.

What is striking is that in all the recommendations for this history or that history to be taught to our children it is impossible to find even in the history which is taught any reference to the financial background to so many of the disasters of the past.

There is an old hymn, “Tell Me The Old Old Story” which refers to the Bible.  In reality the old old story is that if you let people loose and allow them to control the monetary systems and methods they will almost certainly abuse them for profit and leave misery and mess in their wake.

Then all you can do is pray and probably that will not work.