Tuesday, 31 January 2017

Seeing through the smoke


The last week has been extraordinary, even by the standards of these extraordinary times. A flurry of Executive Orders from the new President of the United States has thrown the global order into chaos and sparked outrage throughout the world.

But he has only done exactly what he said he would do. There is nothing in the Executive Orders signed so far that was not announced during the Presidential campaign, repeatedly and to loud cheers from his many supporters. The President was lawfully voted in by the people of the United States on the basis of the promises he made to them, and he is now following through on those promises. Frankly, I find this hard to criticise. If his decisions are illiberal, discriminatory and racist, that is because a substantial proportion of the American people are illiberal, discriminatory and racist. The problem is not the President, it is those who elected him.

I do not understand why those who cherish liberal values and human rights convinced themselves that President Trump did not mean what he said. Not to follow through on his promises would have been a major betrayal of those who voted for him. How could anyone possibly respect or trust a President who made promises on the campaign trail that he had no intention of keeping once in office? Honesty, loyalty and trustworthiness are the foundation of civic society. What price "liberal values", if they can only be maintained through bad faith?

There is a distressing tendency in the mainstream press to dismiss the election of an illiberal, discriminatory and racist President as "populism", as if that is somehow different from, and inferior to, democracy. The liberal elites that have been in the ascendant for the last half-century or so cherish a reified concept of "democracy" in which informed people choose their government on the basis of frankly altruistic principles. The good of all, not their own narrow self-interests, determines their choice: and for liberal elites, the "good of all" is self-evidently the open, tolerant, inter-connected world in which they believe. Thus, "democracy" must mean the triumph of liberalism. Anything else is not "democracy", it is something lower, something primitive, even animal. If only we could perfect "democracy", there would never be another fascist government, never be any more despised and ill-treated minorities, never be any more government-sponsored atrocities.  

But populism is democracy. Democracy does not guarantee liberalism, tolerance and respect for human rights. Democracy can elevate both saints and monsters to power. The fact is that the American people democratically elected this President. They voted for illiberalism, intolerance and racism. And not for the first time, either. 

Nor are they the only ones to do so. The global, integrated world order is unravelling fast, as country after country turns to fascist authoritarianism. I choose my words carefully. The Fascists of the past will not return: but the values and beliefs that they espoused live on. For seventy years, they have lain hidden, dormant like a volcano: and like those who live on the slopes of a dormant volcano, we have fooled ourselves that they were extinct. We are now learning how wrong we were. 

Except.....we are not. We are still focusing on the wrong things. The world erupts in outrage over the Executive Order temporarily banning refugees from the United States and imposing additional checks on visitors from certain countries. But this is a smokescreen. The Executive Order was clearly designed to create chaos and confusion. It is entirely malevolent, yes: it peremptorily removes long-established rights of movement and residence from certain minorities, chosen on the basis of an an entirely mythical "threat": it is discriminatory on both racial and religious grounds. It may well turn out to be unlawful under the American Constitution. But its primary purpose is to distract attention from what is really going on. And in that, it has succeeded all too well. 

On the same day as the immigration ban was imposed, the President signed two Memoranda. 
The first changed the composition of the Principals Committee of the National Security Council (though not the Council itself, whose composition is governed by law), removing the Chiefs of Staff and adding the President's Chief Strategist, Steve Bannon.

Bannon's world view makes fascinating reading. He frames America's relationship with the rest of the world as a religious war in which America bears primary responsiblity for marshalling the forces of the Judaeo-Christian West against a growing Muslim threat:
But I strongly believe that whatever the causes of the current drive to the caliphate was — and we can debate them, and people can try to deconstruct them — we have to face a very unpleasant fact. And that unpleasant fact is that there is a major war brewing, a war that’s already global. It’s going global in scale, and today’s technology, today’s media, today’s access to weapons of mass destruction, it’s going to lead to a global conflict that I believe has to be confronted today. Every day that we refuse to look at this as what it is, and the scale of it, and really the viciousness of it, will be a day where you will rue that we didn’t act.
It is not hard to work out what US national security policy is likely to look like, if these are the views of the man now driving it. 

In reality Bannon has been driving security policy for some time. The Memorandum merely legitimizes his authority. He had the President's ear from the start. And it is Bannon's world view that underlies the second Presidential Memorandum signed last Friday. That Memorandum requires the Defense Secretary, in conjunction with other members of the Cabinet and advisers, to come up with a plan to defeat Islamic State. The draft plan must be produced within 30 days. 

Also on the day of the immigration ban, the President had a phone call with President Putin of Russia. The Kremlin helpfully summarised the content of their phone call in a press release. This was their discussion of international affairs: 
Mr Putin and Mr Trump had a detailed discussion of pressing international issues, including the fight against terrorism, the situation in the Middle East, the Arab-Israeli conflict, strategic stability and non-proliferation, the situation with Iran’s nuclear programme, and the Korean Peninsula issue. The discussion also touched upon the main aspects of the Ukrainian crisis. The sides agreed to build up partner cooperation in these and other areas. 
The two leaders emphasised that joining efforts in fighting the main threat – international terrorism – is a top priority. The presidents spoke out for establishing real coordination of actions between Russia and the USA aimed at defeating ISIS and other terrorists groups in Syria.
Russia, remember, was instrumental in the recent destruction of East Aleppo at a huge cost in civilian lives. The Obama administration stood by, wringing its hands, while the city was flattened. That was bad enough. But the Trump administration, it seems, would have joined in the bombing. And will, in future.

The final piece in the puzzle is this Presidential Memorandum signed the day before the immigration ban. It directs the Defense Secretary to conduct a 30-day "readiness review" of the armed forces, and in conjunction with that, produce an amendment to the 2017 fiscal budget for "military readiness". And within 60 days, he is to submit a "plan of action" to rebuild America's armed forces to the level of "readiness" he considers necessary. Of course, rebuilding the armed forces was another of President Trump's campaign promises, so there are no surprises here. But this paragraph should give everyone pause for thought:
Upon transmission of a new National Security Strategy to Congress, the Secretary shall produce a National Defense Strategy (NDS).  The goal of the NDS shall be to give the President and the Secretary maximum strategic flexibility and to determine the force structure necessary to meet requirements.
No-one in their right minds would deny that a new National Security Strategy is desperately needed. But just look who would be driving it. The Chief Strategist now has a key role in national security. It is beyond doubt that Steve Bannon's views will significantly influence the new National Security Strategy.

So America is rearming, in anticipation of a new war in the Middle East. A much larger and wider-ranging war than the previous inadequate and inconclusive incursions in Iraq and Libya, which probably did more harm than good: removing the dictators simply left a void into which Islamic State stepped. The immigration ban on seven Middle Eastern countries should be seen as the precursor to the coming conflict. It is ostensibly "temporary", but then so is a war. And if the National Defense Strategy concludes that those countries pose a sufficiently grave threat to the US to justify military intervention - which to me looks like a racing certainty - then the ban would obviously be made permanent, for reasons of national security. You don't allow immigration, or even casual visitors, from countries you intend to invade.

Nor should we imagine that the coming war would be limited to those countries.The White House has already indicated that more countries could be included in the immigration ban. Personally, I would regard inclusion in the immigration ban as a statement of intent.

But how would such a war play out? After all, Islamic State is hardly your usual tinpot dictatorship. It is not even a coherent country. It is a diffuse network of enclaves in multiple countries, and its terrorist tentacles extend even into developed countries such as Belgium and France.

Clearly, strikes against IS strongholds would incur a terrible civilian price, which is unlikely to be remotely palatable to Western populations. Security is one thing, but genocide is another. And because IS does not hesitate to use civilians as shields, genocide would be necessary. So I hope - I really hope - that those now planning the defeat of IS can find another way.

This interesting piece in the FT might give a clue as to a possible strategy. Islamic State is critically dependent on oil. If Western forces, including Russia, can break IS's grip on the oilfields of Iraq and Libya, it might be possible to starve them out. Thousands would die, of course, but the US could blame IS for their deaths. President Trump's comments about "seizing Iraq's oil" should perhaps be seen in this light, though their acquisitive tone suggests there is another agenda too. After all, he is a businessman: takeovers are his daily bread.

So flatten anywhere in the Middle East where IS has a foothold, seize control of oil production in those countries and hand it over to Western oil companies (starting with Exxon Mobil - Rex Tillerson's appointment is no accident). Russia would need a cut, of course - probably the Caspian oilfields currently belonging to Iran.

The accommodation with Russia might require a larger sacrifice too. President Trump has already said he wants to reform NATO, and President Putin has made no secret of his preference for recovering the territories of the former Soviet Union. It is not beyond the bounds of possibility that the price for Russia's cooperation with the US would be that NATO withdraws from the former Soviet states, leaving them at Putin's mercy. The Baltic states clearly fear this.

President Trump has also made no secret of his intention to break up the EU: the EU's Guy Verhofstadt sees the President as one of three major threats to the bloc, the others being Islamic State and President Putin. If the EU fails, then Europe could perhaps end up being divided into a Russian zone and an American zone: where the line falls would be decided by a summit, rather than a Cold War. There would be some poetic justice in this: the continual conflicts in the Middle East and much of Africa are themselves to a considerable extent the long-run consequence of the former European powers deciding colonial claims by drawing lines on a map. And like their former colonies, the countries of Europe would pay tribute to their new overlords in the guise of "defence contributions" or "economic contributions". Such is the fate of vassal states.

It would be a mistake to imagine that US aggression would be limited to the Middle East. The White House's website cites North Korea as a serious risk justifying the development of a completely new, state of the art weapons system: it is telling that the President discussed Korea in his call with President Putin. And a few days ago, the White House warned China that it would not allow it to seize "international territory"in the South China Sea. Whether this develops into a full-scale war, or simply a simmering standoff like the Cold War, remains to be seen.

The present turmoil is the prelude to a major redrawing of the global political map and realignment of powers. In the past, such realignments have always involved war, as resurgent tribal interests fight to restore historic territorial claims: even the dissolution of the Soviet Union in 1991 was not conflict-free. There is no reason whatsoever to assume that this time is different.

Related reading:

Currency wars and the fall of empires - Pieria
Austerity and the rise of populism
What have we learned from history?
The immigration ban is a headfake and we're all falling for it - Medium

Also read Heather Richardson's Facebook post on the "shock event" and how important it is not to play the game.

Image from CNN.

Thursday, 19 January 2017

President Trump's Triffin problem


In many eyes, President-elect Trump is a loose cannon. He says things that upset people the world over. Many of these things perhaps should not be taken too seriously - after all, he is a showman. But it would be a mistake to dismiss his rhetoric on trade. There, he is in deadly earnest - and it does not bode well either for America or for the world. 

Trump's trade agenda was set out in Peter Navarro & Wilbur Ross's paper (pdf) of September 2016. Peter Navarro's most famous work is the documentary "Death By China" which essentially blames China for all America's woes. Wilbur Ross is a businessman who made a fortune from buying up and restructuring manufacturing businesses, some of them protected by George Bush's trade tariffs. Both of them are unashamedly protectionist, labelling countries running large trade surpluses as "cheaters" and "manipulators" and demanding that the rules of international trade be changed to benefit America at their expense. Both of them have been appointed to top trade jobs by Donald Trump. 

Navarro & Ross identify three causes for what they describe as "America's economic malaise". Two of them - high taxation and over-regulation - are long-standing complaints by America's right-wing business community. But the third is new. Navarro & Ross explicitly blame America's trade deficit for poor GDP growth. And they claim that the trade deficit is entirely due to unfair practices by America's principal trading partners:  
Trump views America’s economic malaise as a long-term structural problem inexorably linked not just to high taxation and over-regulation but also to the drag of trade deficits on real GDP growth. Trade policy factors identified by the Trump campaign that have created this structural problem include: (1) currency manipulation, (2) the equally widespread use of mercantilist trade practices by key US trading partners, and (3) poorly negotiated trade deals that have insured the US has not shared equally in the “gains from trade” promised by textbook economic theory.
They name China and Germany as currency manipulators, China as the biggest "trade cheater" (i.e. mercantilist), and Canada, Mexico and South Korea as benefiting from unfair trade deals.

Many people have pointed out the gross economic errors in Navarro & Ross's analysis. At Vox, Matt Yglesias explains how imports contribute to exports: imposing high tariffs on imports simply raises business costs, reducing business profits and threatening people's jobs. The economist Greg Mankiw notes that they fail even to mention the effect on the capital account (foreign investment in America) of closing a current account deficit. Paul Krugman describes their discussion of VAT as "utterly uninformed". And Larry Summers says Trump's global economic plan is based on a "misunderstanding of how the global economy works".

I'm with Larry Summers on this. Navarro & Ross have failed to understand the nature of the US's relationship with the rest of the world. And they have therefore disastrously misinterpreted the cause of its trade deficit. There may well be currency manipulation, mercantilism and skewed trade deals. But these are not the principal cause. No, the main reason for the US's trade deficit is the US dollar.

The US dollar is the world’s premier currency for international trade and investment. More trade is done in U.S. dollars than any other currency. More trade finance is issued in U.S. dollars than in any other currency. More business investment is financed in U.S. dollars than in any other currency. Global markets price oil, metals and commodities in dollars. Even currencies are priced in dollars. The world relies on dollars to lubricate the flow of goods and services around the world. 

The "quantity of money" equation MV=PY tells us that the quantity of money in circulation should be sufficient to maintain steady output. In a closed economy, when there is too much money in relation to output, there is inflationary pressure: too little, and there is risk of deflation. But because the US dollar is so widely used in the global economy, the quantity of dollars needed to support global trade far exceeds the US's productive capacity. We could say that there need to be sufficient dollars in circulation to maintain steady global output. This does not cause inflationary pressure in the US, as the equation might suggest. Rather, it creates a balance of payments problem. 

How global demand for dollars creates a balance of payments problem for the US was first described by the economist Robert Triffin. Testifying before Congress in 1960, Triffin explained how the US's trade deficit was essential for the global economy, but potentially disastrous for the Bretton Woods fixed exchange rate system:
If the United States stopped running balance of payments deficits, the international community would lose its largest source of additions to reserves. The resulting shortage of liquidity could pull the world economy into a contractionary spiral, leading to instability
If U.S. deficits continued, a steady stream of dollars would continue to fuel world economic growth. However, excessive U.S. deficits (dollar glut) would erode confidence in the value of the U.S. dollar. Without confidence in the dollar, it would no longer be accepted as the world's reserve currency. The fixed exchange rate system could break down, leading to instability.
Triffin's Dilemma, as this came to be known, played out throughout the 1960s and eventually led to the Nixon Shock in 1971, when President Nixon suspended the convertibility of the dollar to gold, effectively ending the Bretton Woods system.

From that time on, the US has been able to run persistent trade and, often, fiscal deficits without risking a damaging run on the currency. Indeed, such is the global demand for US dollars that until the era of central bank intervention and QE, the US was able to fund its growing pile of government debt at lower interest rates than any other country. The US Treasury is the world's premier savings product, and the interest rate on US T-bills is regarded as the nearest we can get to a risk-free rate in the real world.

The US's ability to obtain very large amounts of debt at very low interest rates is known as the US's "exorbitant privilege". But it could also be regarded as an "exorbitant burden". The role of moneylender to the world means the US must be a net exporter of dollars. There are two ways of exporting dollars: one is to lend them, and the other is to buy goods and services. The US does both. Its banks -including the Federal Reserve banks - lend dollars to the world, and its citizens buy imported goods and services from the world.

As this chart shows, the era of globalisation has been marked by a rapidly increasing US trade deficit.


Navarro & Ross wrongly blame this on the trade practices of other countries, failing to recognise its true origin in the US's responsibility for maintaining global dollar liquidity as global trade increased during this period. And consequently, they have come up with a policy prescription which, by closing the trade deficit, would cause a crisis of dollar liquidity, potentially leading - as Triffin warned over half a century ago - to a global contractionary spiral. We have a name for such a spiral. It is called a Depression.

I suppose Trump and his team of voodoo economists would say that they don't care if the rest of the world goes into a Depression, as long as America is ok. But there is no way that America could be insulated from the effects of such a severe global monetary contraction. To show this, we have to look at how such a monetary contraction would play out.

In the first stage, banks lend less to the world. In fact, this has been happening ever since the financial crisis of 2008. Tighter capital requirements mean banks are effectively penalised for lending to higher risks: this is causing a credit crunch for businesses (pdf), especially small and medium size enterprises and particularly in developing countries. In part due to banks' reluctance to provide trade finance, and in part due to poor demand in developed countries, global trade volume has declined significantly since 2008, though a rising dollar has helped to maintain global trade value:


(chart from David Stockman)

The US's trade deficit has already reduced significantly, which indicates that there are fewer dollars in circulation than there used to be.

For much of the period since the 2008 financial crisis, the Federal Reserve's QE programme maintained or even increased global dollar liquidity. But that is now ended, and the Federal Reserve is progressively raising interest rates. This has the effect of tightening global monetary conditions. In response to this, the dollar's exchange rate is rising.

A rising dollar exchange rate makes America's exports less competitive and encourages imports. This is entirely the opposite of what Navarro & Ross want: they want to reduce imports and increase exports. So, to the next stage of the process. To counteract the effect of the rising dollar, businesses are penalised for importing, and citizens pay higher prices for imported goods because of those penalties. What effect does this have?

Clearly, America's imports would fall, reducing the trade deficit. This is of course exactly what Navarro & Ross want. But the flip side of reducing the trade deficit is global dollar liquidity shortage (and, as Mankiw pointed out, a squeeze on foreign investment in the US). This would reveal itself as a sharply rising dollar exchange rate, especially in relation to the currencies of developing countries. If the Federal Reserve did nothing to counteract it, then the effect of the Trump team's protectionist measures would be to put upwards pressure on the dollar, impeding America's exports.

The worsening global dollar liquidity shortage would force China and other holders of US Treasuries to sell down their holdings. Such sales would be likely to raise yields on USTs, to which the Fed would most likely respond by raising the Fed Funds rate. So the tightening effect of the rising dollar could be compounded by faster monetary tightening from the Fed.

Closing the trade deficit when the dollar is rising would require progressively harsher trade controls - larger penalties for importers, price rises for citizens, perhaps outright import bans for some products. Because restricting imports raises costs for businesses, we would start to see business failures, resulting in falling GDP and rising unemployment. This is exactly the opposite of the effect that Navarro & Ross claim that closing the trade deficit would have.

Not that they would succeed in closing it, though. Other countries would inevitably respond to America's protectionist measures by imposing tariffs on American goods and services.  This, in addition to the rising dollar, would make America's exports prohibitively expensive. So the effect of Navarro & Ross's protectionism would be a severe contractionary spiral in global trade, with America at the epicentre.  It is not hard to imagine what the effect on the American economy would be.

It is, of course, possible to close a trade deficit by initiating a severe recession. Indeed, it is probably the ONLY way of unilaterally closing a large and persistent trade deficit. Navarro & Ross's protectionism would not improve prosperity in America. On the contrary, it would be a severe economic decline, perhaps even another Depression. And as always, the worst hit would be the working poor - the very people who voted for Mr. Trump in the hopes of a better life.

Related reading:

Safe assets and Triffin's dilemma
When populism fails, tragedy prevails - Manchester Policy Blogs

Image from the LA Times. 




Friday, 13 January 2017

It's not an NHS crisis, it's a social care disaster



You've probably all noticed that I haven't been writing much lately. Well, not on this site, anyway, though I have been doing rather a lot elsewhere.

In the last couple of months, my life has been upended. I suppose I should have seen this coming - the signs have been there for a long time - but the speed at which this has happened has shocked me.

At the end of October, my father suffered a fall at his home on Sheppey, where he has lived alone since my mother went into a nursing home in August 2014.  He was found - after several hours - by the taxi driver he had booked to take him to see her. I didn't find out for another two days that he had been taken into hospital.

When I went to see him, I was horrified. He couldn't talk, and when I spoke to him he just stared at me. I thought he had had a stroke. But the hospital thought otherwise. They decided it was his heart, fitted him with a pacemaker (for which he had previously been recommended, but no-one had got round to fitting it), and discharged him. Unable to talk and unsteady on his feet, he went back to his home, to live alone with no support.

He tried to carry on as before. The day after his discharge, I had a phone call from his taxi driver saying that he had just taken my father to see my mother. "He shouldn't be living alone", he said. "He's not well".

How right he was. A few days later, my father was back in hospital after a fall in the street. This time, the doctors decided that he had post-stroke seizures, though they didn't know exactly when the stroke had been. They gave him epilepsy medicine. He stopped falling over, though he still had frequent small ("petit mal") seizures during which he temporarily lost the power of speech and purposeful movement. They didn't have a solution for the small seizures, so they referred him to Kings College Hospital in London, and discharged him. Yes, you got it - discharged him back to his home to live alone without support.

Both my father and I resisted his discharge on the grounds that as his epilepsy is clearly not under control and he has a number of additional health problems, it is unsafe for him to live alone and we needed time to arrange accommodation and care. The doctors told us that there would be a care package for 6 weeks consisting of visits twice a day to ensure his safety, and the ward nurses said that he would not be discharged until the care package was in place. The discharge nurse amended this slightly - she said the care package would not kick in "for a few days". So I - rashly - agreed to cover.

Two weeks later, there had not been a single visit. Clearly, something had gone wrong. I didn't know whether the failure was at the hospital, which requests care, or in the local council, which provides it. Fortunately, I was able to enlist a spy.

About ten days after his discharge, my father had been telephoned by a community occupational therapist. Telephone calls are difficult for my father, since he often loses the power of speech during the call - this is one of his (so far unresolved) care needs. So, as my father was unable to speak, the occupational therapist decided to make a personal visit to assess his care needs.

I was not present for that visit. Later that day, when I arrived to help my father with his shopping, he said "They can't help me". The occupational therapist had concluded that since my father doesn't need help with personal care, he doesn't need any help. I spoke to the occupational therapist the following day, and he confirmed that the decision was to provide no care. I pointed out that the hospital had promised 6 weeks of twice-daily visits to ensure my father's safety, and that the NHS was paying for these visits. He said he didn't think any such request had ever been received, but he agreed to find out what care had actually been requested.

A few days later, he rang me. No care request had ever been received. All that had been requested was district nurse support for my father's permanent catheter, and follow-up by the GP regarding routine EEG as part of epilepsy management.

I am not one to take such hospital malpractice lying down. We had only agreed to my father's discharge on the basis that a care package would be provided. Had we been told the truth, my father would not have left hospital until I had been able to organise private sector support for him, which could have taken quite some time. So I registered a formal complaint with Medway NHS Trust and copied it to mine and my father's MPs.

That stirred things up nicely. Within a few days, I was contacted by the sister of my father's ward at Medway Hospital. She investigated what had happened, and discovered that somewhere in the labyrinthine administrative nightmare that is the NHS's relationship with community care providers, the doctors' request had disappeared. Despite the assurances the ward staff and discharge nurse had given us, my father had in fact been discharged  to live on his own with no support.

The hospital apologised, of course. But there is still no care. And this time, it is not the hospital's fault. It is the fault of the local council.

The occupational therapist said that even had the care request from the hospital been received, Kent Social Services would still have provided no care. This was confirmed by a social worker a few days later. "We don't do safety visits," she said.

So the local authority will provide absolutely nothing for my father. No care in his own home. Nothing to ensure his safety apart from assistive technology which requires him to be able to speak - which he cannot, when he is having a seizure. No sheltered housing (he fails the means tests). Apparently the local authority has no duty of care whatsoever to an 83-year old frail elderly man with multiple health problems who is living on his own. What kind of society have we become?

Not only has the local authority refused to provide care of any kind, it won't even help us to find self-funded private sector support. The best the social worker could offer was a referral to Age UK. Age UK say they can probably provide someone to accompany my father on trips out of the house, but they don't do safety visits, and nor can they provide an on-call service as backup to the assistive line to avoid unnecessarily calling out the emergency services. So it is now left entirely to me to find a private sector care agency that can meet these needs. Until I do, my father is on his own, and I am his sole carer despite working full-time and living 30 miles away. We have been comprehensively dropped in it.

By failing to provide care, the hospital and the local council between them have effectively forced me to become my father's carer, without my agreement and - more importantly - without any respect for my own needs. I am not in a position to give up work to become my father's carer. I still have a dependent child, whom I must feed and house (though thankfully I don't have to clothe her any more - she pays for that herself). So I am now trying to manage my father's needs in addition to working full time and looking after my own family. There are only 24 hours in a day, and they are not enough. Sleep is for wimps.

Whoever failed to organise care for my father clearly didn't give a stuff. All they cared about was getting him out of hospital. Such is the pressure on beds these days that hospitals will discharge frail elderly people into unsafe environments with no attempt to ensure that appropriate care is in place. And they will also wilfully mislead the families of frail elderly people to get their agreement to an inappropriate discharge.

But the bigger issue here is the comprehensive failure of the local authority safety net. Local authorities have cut social services to the bone. Even for those who are poor enough, or needy enough, to qualify for social support, the provision is dangerously overstretched, with inadequate care homes and carers who are poorly trained, poorly paid, insufficiently supervised and seriously overloaded. And for those who can afford to pay for their care, or whose care needs simply don't meet the extremely narrow criteria to which local authorities have restricted their care provision, there is very little provision at all.

Importantly, it is not just the public sector that is desperately short of capacity. I was advised not even to try to contact private sector care agencies over Christmas because they were so overstretched. As I have said previously, this is a massive market failure. Neither the public sector nor the private sector are able to provide the care that elderly people living in the community increasingly need.

Ring-fencing the NHS budget protected it from the worst of the cutbacks in recent years, but because the NHS was protected, other areas were cut even more heavily. Local authority budgets have been cut repeatedly: many local authorities are struggling to provide even basic services. No wonder they interpret their remit so narrowly that many vulnerable people are left without care. But I don't understand why they won't act as an enabler for people who are able and willing to use private sector care support, but need help finding providers. Surely it doesn't cost much to provide a signposting service?

The really stupid thing is that the NHS ends up paying anyway. Elderly people remain in hospital far longer than they need to, because there is nowhere safe for them to go. Or, worse, elderly people are discharged from hospital into unsafe environments with no care in place, and quickly end up back in hospital after emergency services are called out by family, neighbours, assistive line call centres or voluntary services. The NHS then has to treat them for wholly unnecessary injuries, hypothermia, dehydration, and the consequences of failing to take medication.

And it's not just elderly social care that has been cut. There are widespread cuts to other social services, such as community mental health. These local authority cutbacks don't really save any money, they simply push the cost somewhere else, increasing it along the way because of the distress this causes to those affected. And when the music stops, the cost inevitably falls on NHS Accident & Emergency departments. No surprise, then, that NHS A&E is in crisis.

When social services fail, it is the NHS that picks up the tab. This, not underfunding of the NHS itself, is the main cause of the crisis in the NHS.

Like all crises, this one has been visible on the horizon for years. There have been repeated warnings about the effect on social services of severe cuts to local authority budgets. But of course now the crisis is here, everyone will say "why didn't we see this coming?" There is none so blind as those who only see money, and none so deaf as those for whom listening is more than their political job is worth.

Related reading:

Market failure
The sandwich generation
Broken windows, broken lives









No, I'm not going to respect your opinion



What does "discussion" mean?

According to the Oxford Dictionary, there are three definitions:

  • the action or process of talking about something in order to reach a decision or to exchange ideas
  • a conversation or debate about a specific topic
  • a detailed treatment of a topic in speech or writing

Well, this is a pretty wide brief, isn't it? Lots of opportunity for misunderstanding there.

I recently joined a discussion group. There are lots of these on social media, some open, some closed. Some have clearly defined topics, others are much woollier. Most do not specify what they mean by "discussion".

I expected a friendly debate in which differences of opinion are welcomed and there is no intention of reaching any conclusion. But there is no particular reason why I should expect this. Another person might expect discussion to be focused entirely on obtaining general agreement to a particular course of action. And someone else might simply be wishing to air their views on a particular topic without those views being challenged. All of these fit within the dictionary definition of "discussion".

So I asked the members of my group what they meant by "discussion". Of course, there were different views. So we are now having a discussion about the meaning of discussion. The question is, should this discussion lead to mutual agreement about what we mean by discussion, or should we "respect each other's opinions" - by which most people seem to mean "agree to differ"?

To me, the answer in this case is obvious. We cannot possibly "agree to differ". If we don't agree on what we mean by discussion, no discussion is possible. We end up talking past each other, or worse, getting angry with each other because people who want friendly debate challenge people who just want to air their views.

When there is no agreement about what "discussion" means, a "discussion group" tends to become merely an echo chamber for the majority who substantially agree with each other. Dissenters are silenced, not by moderators but by abuse from the majority. Although the group has never "agreed" what it means by "discussion", the majority view inevitably prevails.

So in order for there to be discussion, we must in the first instance agree on what we mean by "discussion". In an unmoderated group where there is no agreement about what "discussion" means, the dominance of the majority amounts to a coup. Moderation is necessary to prevent the majority becoming tyrannical.

But we don't have to agree about anything else. Indeed, discussion is more constructive if we don't. Dissent is creative. We learn from those who disagree with us. Silencing dissent is the hallmark of totalitarian regimes. Those who see "discussion" as opportunity to air their views in a supportive environment, and abuse those who provide reasoned challenge to their views, are essentially fascists.

We can, and should, disagree with each other's opinions. Discussion does not have to mean agreement. We can take the same set of facts and reach opposite conclusions, as my father and I did over the Brexit vote: I was more positive about the future for the UK in the EU than he was. We were simply attaching different weightings to the available facts and assessing the best course of action based upon our weighted view of the facts. And we will never know which of us was right. As Aslan said to Lucy, "To know what would have happened? No. No-one is ever told that. But anyone can find out what will happen." The choice was binary and irrevocable, and we now know what will happen, though we do not yet know exactly how. The path we now walk is that which leads out of the EU.

However, dissent over facts is not reasonable. If I know there is overwhelming evidence that your opinion is based upon a wrong understanding of the facts, I am not going to "agree to differ": I am going to present the evidence and expect you to change your opinion. There is not, and will never be, £350m per week to be saved by leaving the EU. There is not, and never has been, a "pension pot" containing your NI contributions. Banks do not lend out reserves, or deposits.

You may decide not to change your opinion, of course: there are plenty of people who continue to believe that the earth is flat despite overwhelming evidence to the contrary. But I am not going to respect your opinion. It is not respectable.

So I will continue to correct factual errors and challenge ill-founded opinions. And if that is disrespectful, so be it. You are entitled to your opinion, but don't expect me to agree with you. If I think your opinion is fantasy, I will say so. And if you don't like me correcting your facts, get them right.

Related reading:

The snake oil sellers
Dangerous assumptions and dodgy maths
Banks don't lend out reserves - Forbes


Image is a still clip from the feature film "Prince Caspian", showing Aslan and Lucy. 

Sunday, 1 January 2017

The return of machismo



2016 has been an extraordinary year. Memorable for so many things: celebrity deaths, the melting of Arctic sea ice, Trump, Brexit, terror attacks in Europe, drownings in the Med, destruction in Syria. The largest movement of people in recorded history. And - perhaps - the overturning of the political & economic paradigm established by Reagan and Thatcher. Are we seeing the end of elites and the triumph of the common man? Was the Brexit vote really the victory of "ordinary people"? Was Trump's election really due to a populist surge?

I look at Trump's cabinet and I don't see a resurgence of populism. On the contrary, I see the triumph of the 1 percent. Trump's cabinet is made up almost entirely of old, white and extremely rich men. Many of them are former senior military personnel. The few women are rich, beautiful and - by American political standards - young. In short, the composition of Trump's government speaks not to pluralism, or even the end of globalism, but to something else. The return of machismo.

By this I mean the sort of machismo that defines clear expectations for men and women. Men are to be rich, white, old, powerful. Women are to be rich, white, young, beautiful. Women can hold positions of power, provided that they conform to the expectations of the men who put them there. There is no place for old or unattractive women - sorry Janet Yellen, I think you are history. And there is no place for men who are non-white or poor. Maybe I am exaggerating, but this is how it appears to me.

Trump's promise to Build A Wall should therefore be seen for what it is - machismo. So too his promises to renegotiate trade agreements in America's favour, declare China a currency manipulator, and bring back manufacturing jobs (which mainly go to men). In America, we are looking at the resurgence of male power. I'm not surprised that Trump wants to build up America's nuclear capacity, either : the ultimate macho power symbol for a male politician is surely a nuclear warhead. Dammit, it even looks like a phallus. And as for that Wall - well, I don't know if Trump will actually build it, but if he does, it will become a symbol not of America's control over immigration, but its dominance in the world.

If Trump's Great Big Wall is the symbol of "Making America Great Again", the equivalent for Britain is a Bloody Big Boat. Rebuild the Royal Yacht and send the Queen round the world hosting tea parties for nabobs. The natives will kowtow and Britain will once again rule the waves. Our former colonies will submit happily to our rule leadership, and we shall have our Empire back in all but name.

Britain's machismo is maybe not quite so obviously about male potency. After all, our Empire flourished under a Queen. But it is equally silly. No way is building Britannia II going to make Britain once again a great trading nation. The trading relationships of the past were built on colonial acquisition as much as free trade, and were backed up with force: for example, our opium "trade" with China in the 19th century relied entirely on the Royal Navy. We cannot turn back the clock to that time, however much some of us might like to. The world has changed, and those we used to lord it over now expect to be treated as equals. These days, forging trading relationships involves painstaking negotiation and a willingness to compromise. We cannot simply state our terms to other nations and expect them to sign on the dotted line. But that seems to be the approach we are currently taking.

Listen, Americans, I'm sorry if some of you have been feeling emasculated by the monstrous regiment of (old) women, but machismo of this kind does not make for a peaceful or a prosperous world. Building ever bigger warheads to impress the warlords on the other side of the Urals may keep the peace for a while, but establishing reciprocal free trade agreements with countries around the world brings far greater and more lasting benefits.

You don't need to make America great again. America is already great. It is the greatest trading nation on earth. And its greatest export is its debt. There is no shame in being the producer of the world's finest savings product and its most important currency. Embrace your destiny. Let the world beat a path to your door to sell you goods and services in return for your wonderful financial products. And as investment flows into your economy, build great things - including a Wall, if that is what you want. Build the Wall to end all walls. The Wall that is the greatest Wonder of the World. The Wall that can be seen from your colony on Mars.

And listen, Britons - or should I say "English", since I am mainly speaking to those who voted to leave the EU? I know lots of you voted for "sovereignty". But if you are not careful, you will be sovereign over not very much. Far from putting the "Great" back in Britain, the Union is in serious danger of breaking up. You have to accept that you can't have your Empire back, you can't keep foreigners out and you can't rule the waves any more. Not even in British territorial waters - after all, we lost control of our fishing rights long before there was a Common Fisheries Policy.

But that doesn't mean that Britain can't be great. Indeed it IS great. There are so many things for which Britain is universally respected - its law, its Parliamentary democracy, its openness, its tolerance, its free speech. These are what make us great. We diminish ourselves in the eyes of the world when we put up barriers, restrict free speech and become intolerant of diversity. And when we undermine our great institutions, we make ourselves far less attractive as a trading partner. Although I'm sure the Queen would love to have a new Royal Yacht, this is not what will seal favourable trade deals with other countries. Rather, it is the trustworthiness that comes from the rule of law and fair dealing. Just as America's debt is its greatest export, so English law is Britain's greatest export.

I hope the demented euphoria on both sides of the Atlantic ends soon, and is replaced with a more balanced and pragmatic outlook. The next few years will not be easy. Machismo doesn't work in Latin America or Africa, so what on earth makes us think it will work for us? We need to recognise our real greatness, and rediscover what really brings us prosperity.

It is trade that makes us prosperous. Not war games, vanity projects and phallic symbols. Trade, pure and simple. And globally speaking, the freer our trade, the more prosperous we will be.

This is not to say that free trade has been beneficial to everyone. It hasn't. But that is because for thirty years, national governments have shirked their responsibility for ensuring that the benefits of trade are fairly shared. I fear that instead of governments reconsidering how best to distribute the proceeds of trade, the return of machismo will mean that trade itself is diminished, replaced by power plays, political posturing and even outright war. If this is where we are headed, we will all be the poorer for it.

I am no fan of Ayn Rand's philosophy, but on the supremacy of trade, she was absolutely right.

Related reading:

The Morality of John Galt (5-part series) - Pieria

Image from Wikimedia Commons.