Reflections on the Greek Debacle

In the country of its birth, true democracy is dead.  The voice of the people, heard as comprehensive support for the OXI (no) vote was completely ignored one week later and a new austerity package was imposed on Greece as the Greek Prime Minister capitulated under intense pressure from the EU Troika.

Austerity on steroids is back, fifty Billion Euros of Greek national assets are to be placed in a Luxembourg trust fund pledged as debt security, taxes are up, pensions down.  The Greek economy is crippled for at least two generations.  Fiscal policy is directed and approved from the EU.    In short, Greece has sold its national sovereignty down the river to stay in the Eurozone. 

The power of international capital has never been so clearly demonstrated.

What is the future for Greece, and by extension for the other members of the so-called PIGS group?  David McWilliams, an Irish economist thinks that over time, tourism, one of the largest economic sectors in Greece will become largely foreign owned.   (See Here).  He goes on to suggest that the majority of consumer goods will be imported, and all profits will be subject to foreign, mainly German, repatriation, leaving Greece impoverished.

Unpicking the events of the last few weeks, it is clear that the EU and Merkel in particular negotiated in bad faith, never having the intention of settling with anything other than the crippling austerity package that is to be implemented.  The former Greek Finance Minister confirmed this, memorably saying that they might as well have sung the Swedish National Anthem for all the response and attention their proposals received from the EU delegation,

To put a political slant on it is obvious that the European authorities fear that a recognition of the democratically achieved No vote would encourage the rise of left-leaning parties elsewhere in Europe. It also tells me that this fight is not really about the debt itself, but part of a much larger political struggle over who will actually control the EU, the people who live in it, or the political and financial elite.

Finally, it demonstrates to me the truth of something that Lord Jenkins said in the run-up to the creation of the Eurozone – financial unity is unworkable without political unity.

Can you in all honesty see Germany and France surrendering sovereignty each to the other? 

Wait for the next instalment in Portugal, or Spain, or perhaps Ireland.

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The Bankers Again

I am basing this on something I wrote in August 2012. 

As you see, things haven’t really changed all that much.  With the noble exception of Iceland, the bankers still have national governments by the short and curlies.  This vice-like grip enables them to force Governments to continue stuffing purgatives down the throats of the unknowing masses, while still raking in enough cash to keep their country estates neat and tidy and their daughters in ponies.  Greece is worrisome, because if Greece manages to get out of the clutches of the banksters, others may follow where the Greeks have already gone.

A synopsis of what I said then:

“I just don’t understand the rationale behind the current squeeze.  The purpose of the squeeze apparently is to put the economy back to rights and thereafter expand it. A sort of fiscal detox and purgative along the medical lines of it’s hurting so it must be doing you good.

I’ll be grateful if someone could please explain slowly and carefully in words of one syllable or less how putting people out of work so that they have less to spend expands an economy?

Also, explain to me why savage deflation and contraction of economies, coupled with reductions in public and personal expenditure are going to start up economies again.  If tax income is decreasing and isn’t there to spend while companies close because of empty order books, where is this stimulus going to come from?  Looks like a vicious downward spiral to me.

The story from the financial community is that if you get your house in order, then investors will return and all will be rosy in the garden again. That’s fine advice from the guys that caused the problem in the first place. It’s not much comfort when the thought is of you and your family existing on the nuts and root vegetables you scavenge while out looking for work”.

Some of the answers are more clear.  If there are fewer people working and paying tax, just increase taxes and reduce the costs of Government.  Note that the cost reduction is not by reducing the amount of Government and thereby it’s cost, but by reducing the amount paid by Government for the provision of goods and services, particularly to those thrown out of work.   Adding insult to injury doesn’t quite cover it. 

Are our bankers feeling the pain?  I don’t think so.  They are still raking it in.

Our Financial Services environment is sorely out of balance and needs to be fixed.  We aren’t going about it the right way.

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Sanctimony, Rectitude and Social Media

I’ll lay my cards on the table from the outset.   I am certainly a lapsed agnostic, and more likely an atheist.  

If I were to follow a deity, it would probably be Odin and his merry crew.  Far better to spend the afterlife carousing, feasting and having a jolly good time with a shield maiden in the halls of Valhalla than sitting on a cloud plucking a harp.   However, having said that, the ability to take the leap of faith to adopt a deity as your role model is one I can’t do, but I admire in a sort of a way those that can. 

It’s difficult for me to take as literal historical record a book cobbled together out of stories written some hundreds of years after the events they portray, and carefully edited to leave out the contentious bits that would prevent uniting all of the various Christian factions into a single party under the Bishop of Rome.  Never mind that the stories were written in different often archaic languages and passed through several translations before being translated into English in the 17th Century as an Authorised Version with one eye to meeting the political demands of the day. 

I’ve noticed recently an upsurge in the amount of wee homilies of the God bothering type appearing on social media, particularly Facebook, and increasingly so on LinkedIn.  I have no particular axe to grind with religion, you can be anything from an Animist to a Zoroastrian via Methylated  Spiritualism as far as I am concerned,  whatever blows your hair back.  

What does burn my boat is the type of happy-clappie who has a, I don’t want to call it Fascist,   but let’s say fundamentalist approach to the beliefs of others.  Basically, if you don’t share their enthusiasm you are somehow broken and need to be fixed.   If you refuse to be fixed, you are then consigned to an inner circle of hell and treated like the sort of stuff you find on your shoe after a rural idyll in a cow pasture. 

I do not like or care for this sanctimonious in yer face approach to religion.  Stop pestering me.

This week I complained to several religious posters politely advising them that LinkedIn is a business forum inhabited by an extremely diverse range of opinions on all matters, including religion, and concluding by pointing out that religious posts may well offend some, are not appropriate to a business forum and would they mind just butting out and sticking to the spirit and ethos of the forum.   The type of response I received indicated that they felt they had a divine right to post this stuff, and then cursed me unto the fourth generation, and suggested that the only sort of wings I would be getting in the afterlife would be well crispy and burned.   Just a tad over the top I felt.

Do they feel threatened, perhaps.  Religion hasn’t been getting a good press recently.  Mind you, intolerance of other belief systems has always been a cornerstone of most faiths.

All I want is for them to butt out and do their own thing in their own place and stop shoving their sanctimonious moral rectitude in my face.

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The ANC–Arrogant and Cloth-eared?

Does the ANC Government actually listen to anyone other than themselves? Does it actually care about what people think? It would appear not.

Firstly e-tolling. 

Cyril Ramaphosa this week threw a sop to the opponents of e-tolling.  It is here to stay, but have part of your debt written-off, let’s simplify and reduce the the tolling tariff and payment cap, but beware, you can’t renew your car tax if you have outstanding e-toll debt. All met with a hollow laugh and a renewed commitment to have e-tolling scrapped.

Points to note, e-tags are now superfluous.  The tariffs for tagged and non-tagged users are the same.  So why have SANRAL able to access your bank account and personal details – deregister now and throw away the tag.   Second, it has been argued that linking e-toll bills and renewal of car tax is unlawful.  It is inevitable that court cases will follow.  Stop paying.

I would have thought that one million Gauteng motorists totally ignoring e-tolling would send a message.  Apparently not.

Second, Eskom.  Eskom is bankrupt, both in financial terms and management capability. 

The current proposal to sort out their financial mess is to loot Pension Funds, both Government and Personal. That’s all.  Gimme the money.

No programme to deal with the manifest deficiencies in management and operational structures in Eskom.  No programme to deal with the management and operational issues following on from the disastrous Medupi and Kusile power station build projects.   No mention of private power generation, alternative short term generation solutions, the breaking up of Eskom into smaller, more focussed manageable entities.

Are they listening? Apparently not, because the answer to all our power problems is to build at least 6 Russian nuclear power stations at a cost of somewhere between 400Billion and 1Trillion Rand.  The first is to come online in 2023 at Thyspunt in the Eastern Cape.

We now know what No. 1 was discussing in his private tete-a-tete meetings with Putin.

I look forward to our 30% matric pass pupils, without either maths or science in the mix building and operating them.    As an example, consider Dhuva.  The Unit was down for two years because of “operator error”.  A simple generator load test in Unit 4 resulted in a major explosion with multi-ton parts of the generator flying around in the generator hall like enormous lumps of shrapnel.   An operator went on tea break and was not present to press a button to terminate the test when the rotational speed of the generator exceeded spec.  If I lived in Thyspunt, I’d either plan to move far away or start building my personal fall-out shelter.

Tina Joemat-Petterson in charge makes me even less optomistic.

Listening, I don’t think so.

One optimistic thought.   perhaps Zuma is like Nero, fiddling while the ANC empire is crumbling around him.

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Post-Election Reflections

The stunning SNP results in Scotland and the slaughter of Labour and the Lib Dems in Scotland and elsewhere make this an election completely different from any in my lifetime.

First, there seems to be a lot of chat about the SNP forcing a second referendum over independence.   Inevitably that will happen.  Hollyrood is there and functioning, and there is a a load of discussion over the types and limits of the devolved powers.  However, like pregnancy, you can’t only be a bit independent.  The people are way ahead of the politicians.   Scotland has turned it’s back on Westminster.  All the politicians can do now is catch up. 

If that means leaving Westminster after the inevitable falling out with the Tories and raising the Saltire above Hollyrood, then that is what will happen.  The signs are already there, Human Rights has caused a major rift this week.  England will vote to abolish the EU legislation, Scotland will vote against abolition.   We haven’t even started talking about Europe, money, submarines or austerity versus welfare spending.

I felt at the time of the referendum that the process said more about England than Scotland.  Scots have a clear sense of identity, the English need to find one.  While everything continues to be defined in terms of distance from Mayfair and the Civil Service geography of “London and the Provinces” lives on,  that is where their problem will lie.  

Time will tell. 

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Happy New Year from Kabul

Yup it’s Hogmanay in Kabul.  First time for many years I’ve seen in the New Year with a cup of tea.  Singing, dancing, and not a drop to drink.  And that’s this afternoon at work.  Not safe to hang around after dark.

Now to Kabul itself.  In a better world the Travel Advisory entry should read:

After a hard day walking the ruins of an ancient Buddhist temple complex, we returned in our luxury coach to the Kabul Hilton and settled gently onto the sun deck where we sipped exquisite cocktails.  The sun was sinking slowly over the majestic snow-capped mountains,  reflecting off the silvery Kabul river as it headed off downstream.  Our waitress, as fine an example of the beauty that is Afghan womanhood as you could find, brought over a refill and a small platter of snacks to nibble on.  The merry cries of the street vendors below lent an exotic romance to the scene”.

Let me rewrite.

1. The Taliban destroyed all the Buddhist temples and replaced them with mines. Walk around one and you will lose your legs.

2. No Hilton, no booze, no cocktails.

3. Mountains yes, and very spectacular, but the Kabul river is an open sewer.  Saw a dead horse floating down it yesterday.

4. Afghan women are not pretty.  An ethnic mixture of Indian, oriental and the Russian stans,  they have a hard life and they show it.  I have yet to see one that would cause even the mildest twitch in father’s southern fruits after eleventeen pints of Old Overcoat.

5. Merry cries, more like demented shrieking, punctuated by the occasional bang and/or gunshot as the crazies resolve their issues. 

I live and work in secure compounds built on the mediaeval castle concept of rings of protection, Big walls, outer bailey, more big walls, inner bailey, more big walls, then the living and working complex. Armed security guards every few feet.   Get up, go to work in an armed convoy, work, come home again in an armed convoy, eat, sleep.  Dead exciting.  Seeing what’s on the Indian movie channel becomes exciting.

Kabul – Imagine seeing every bloke in the street carrying some sort of weapon, from a pistol, via an AK to an RPG rocket launcher. Imagine full-on fully armed military convoys muscling their way through the traffic.  Imagine the architecture of the Alexandra township in the 80s.  Imagine Butterworth todayImagine taxi drivers that could teach our SA lads a thing or two.  That’s Kabul.

Not a place I will be adding to my list of favourite holiday spots.

But the people are really nice when they aren’t shooting at you.

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Is A Tipping Point Approaching

The average PAYE taxpayer currently pays between two thirds and three-quarters of their income one way or another to the various layers of government, but there are only 5 or 6 million of them to support the 52 million or so in SA.   As Mike Schussler says, an unsustainable situation.  Taxpayers are becoming increasingly hacked off with reading stories of the looting of Government coffers and examples of profligate waste while local and national government is presiding over a slow but sustained collapse of the national infrastructure.  In many areas, Municipal Services is an oxymoron.  

More and more people are questioning whether they are receiving value for the tax payments they are forced to make.  Given a free choice many would pay far less or stop paying at all.

Take the current favourite, electricity.   It was not really rocket science to work out that if you were adding millions of new homes and business to the grid that you would need increased generative capacity and an extended and working distribution infrastructure.   Our lords and masters knew this because they sat on a report and ignored increasingly panicky representations from the industry for nearly ten years and did nothing.  Hence our national growth is restricted, and we are a hair’s breadth away from a complete failure of the power grid.   If four or six hours of sitting in darkness in a previously powered area during a planned power cut is bad, consider the effects of no electricity at all for two weeks.   That’s how long it will take to recover from a complete grid failure.

What is really adding salt to the wound is that the situation could be much eased with one simple action.

For most users, the reality of not paying the bill is that you are cut off by your Municipality or Eskom.  Finis und klaar. However,  there are people, householders and businesses, who have never received a bill, people who are unlawfully connected to the grid, and people who have never paid a bill that are continuing to receive power.   Some Municipalities  collect payments  from users and don’t pay Eskom.      The result is that Eskom are owed billions for unlawful and unpaid usage. Eskom won’t tell exactly how much.  Cut off power to these users, and the risk of power cuts and a total system collapse for the rest of us significantly lessens.

However, this does not happen.  No visits from Eskom or the Municipality to cut them off.    The conclusion that most people draw is that the policy of no disconnections is politically motivated.  The ruling party don’t want to alienate their voters.

The knock on effect is really undesirable.  If  laws are enforced for one section of the community, but not for others, then this will surely lead to an overall disrespect and disregard of all laws by all sections of the  community.  In the case of electricity, I am surprised that there have not been any reported cases of previously law-abiding users stopping payment and simply reconnecting themselves after the disconnection team have left.   Why bother stopping at four-way stops, why bother with car licences, why bother paying rates, why bother interacting with the State at all.   Where will it end?

I have a gut feeling it will end in tears in the not too distant future.

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