Watch out for the deflecting of blame ...

Following my last post, it was interesting to observe the comments made on Flanders' blog (which resulted in me adding a few myself).  For me the key point arising is the risk of tarring particular generations with the same brush ... and starting to blame one another ... both of which are wrong.

One blogger (Boilerbill) commented ... 

"It is curious how an article pointing out that a certain sector of society has done relatively well, turns into 'the selfish generation'. Being selfish implies that there was something deliberate about what has happened - for the most part there wasn't. If there are villains, they are those who built the economic models - the economists and politicians.

I receive a public sector pension and for most of the time more was being taken in, than was being paid out - in fact we were subsidising general taxation. As early as the mid 70s those who had taken the responsibility for predicting our economic future should have seen that it was a Ponzi scheme and change it to a funded pension. People were complaining about paying too much - that would have been politically and economically right time to introduce a change which would have avoided part of the pensions crisis. In those days people trusted with handling money - especially savings - were held in high regard. Anything to do with pensions was regarded as boring but safe. People bought pensions wanting not be a burden on their children. They were not economic modellers.

This is just one example of where there may have been unease about what was happening and the economic modellers got it wrong. Like any person, you take what is on offer. You may question its viability, but when the experts tell you that it is OK, you go on and take it. The politicians are supposed to tell you how it is. In the past we were told that everything is going to be all right, but a bit too complicated for you to ever understand. It seemed all right so we re-elected them. Now we are told the future is bleak. Politically that is a good message to make - blaming it on Gordon won the election, but blaming it on a declining generation may win future elections.

There is a problem and the government is being over generous to some sections. The balance needs to be changed. The economic model which we were told would work has failed. But ask any of those born between '45 and '60 and they will tell you they were trying to build a future for their children. The fact that it didn't work out may be their fault for failing to understand the limits of the economic model, but there was little intentionality, so to label them as selfish says more about the accusers than about that generation" 

I had to agree, and commented ... 

"I agree. IMHO the key point with this article (and post 229) is that the small minority in power who practice Poweromics* (e.g. Politicians, Bankers) are able to do so (and successfully line their own pockets & flourish) without being challenged in a world surrounded by Ignoromics**. If you want to challenge Poweromics ... you have to reduce Ignoromics (as they are partners in crime).

IMHO there will be no new 'leaders' emerging whilst there are so few people wanting someone new to 'lead' ... and I'm afraid Ignoromics still prevails at this time hence it hasn't happened yet ... IMHO this won't be the case forever ... but things will unfortunately probably have to get much worse before it does ... unless people can find a way to fast-track the removal of Ignoromics, whilst those in power practicing Poweromics (and preparing for this) throw everything they can at them to stop them.

David Clift

'For evil to flourish, all it needs is for good men to do nothing' [Edmund Burke]

* Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed.

** Ignoromics = People are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better (i.e. Type 1 = Ignorance, Type 2 = Apathy).

and followed this up further by saying ...

IMHO the issue is less to age/generation and more to do with type of people we currently have in positions of power (e.g. Government, media, corporations, banks) ... i.e. Egocentric & Ethnocentric instead of more Worldcentric people (for definitions go to http://renegadeeconomist.com/blog/big-questions-hot-handle.html) ... e.g. take a look at a small extract from this link below:

"Introducing tighter regulations for bankers or politicians does not raise their level of maturity, morality or their ethics, it just limits what they can get away with. No, it is the type of people, the Ethnocentrics themselves, that have to go. Worldcentric people by definition and by their nature would not have abused the old regulations, let alone need new ones. Anyone below Worldcentric on the “chart” should not be selected or elected into positions of leadership in politics or big corporations, not just banks. Fewer people would fit the bill and that would limit our choice, and so it should.

The second of the two issues was the failure of commentators to seriously question the capitalist economic system that has proved to be so fragile and unjust. It has brought wealth to half the world while the rest starve; it thrives on excess consumption and the inevitable emissions, and it seriously retards the evolutionary development of individuals and cultures. Bankers and politicians alike strive to prop up the old failing system which they abused, because they know no better.

It did not occur to them that this was a golden opportunity to start to create a viable, sustainable economic system in line with the requirements of emerging Worldcentric human consciousness stage. Putting off the inevitable only makes the next economic crisis bigger and sooner. Worldcentric observers are amazed, distraught by the primitive ethnocentric thinking of our politicians and bankers, but they are up against the power that they still exercise. 

However there is also a groundswell of more conscious or ‘worldcentric’ people who will no longer tolerate the old order and they will become ever more vociferous until the ethnocentric majority of politicians are discredited, ousted and replaced. Some commentators will reread if not resurrect Karl Marx, but the way is forward not backwards. A new economic order is essential, one that puts people and planet before profit".

Moving forward I think we need to careful not to allow a deflection of blame to occur ... e.g. onto all the older generation, when the 'real people' 'stealing everyone's lunch' (breakfast, dinner, tea and future) are a few egocentric and ethnocentric people who currently have power (and misuse power).  However the issue that can probably be raised at most people's door is either Type 1 or Type 2 Ignoromics, which is the very thing that has allowed (and still allows) the egocentric/ethnocentric leaders currently in power to misuse power (and apply Poweromics).

Brown: The collapse of the UK economy was down to me

Gordon Brown today admitted he made a mistake in not introducing tougher bank regulation when he was chancellor.  The PM, chancellor from 1997 to 2007, said that in the 1990s the banks had all been calling for less regulation.

"And actually the truth is that globally and nationally we should have been regulating them more," he said in an interview on ITV1's Tonight.  The Conservatives said Mr Brown had "failed", while the Liberal Democrats said his admission was "not enough".  The prime minister said he should have put the "whole public interest" before the banks.

Mr Brown said: "In the 1990s, the banks, they all came to us and said, 'Look, we don't want to be regulated, we want to be free of regulation'." ... "All the complaints I was getting from people was, 'Look you're regulating them too much'. And actually the truth is that globally and nationally we should have been regulating them more," he added.

"So I've learnt from that. So you don't listen to the industry when they say, 'This is good for us'. You've got to talk about the whole public interest."

Ed Balls, who worked with Gordon Brown when he was chancellor, said both had previously admitted they should have done more to control the financial sector.  At Labour's morning press conference he said: "In retrospect we should have been tougher with some of the investment banks which did not know the risks they were running."

Business Secretary Lord Mandelson added: "Regulation should have been more intrusive and the regulatory practice of the Financial Services Authority should have kept pace with the fast-changing developments in the financial services sector."

Shadow chancellor George Osborne said: "So finally Gordon Brown admits he failed to regulate the bankers and increased taxes on the poor (removing the 10p tax band). We've had 13 years of his economic mistakes. Britain can't afford five years more."

Lib Dem Treasury spokesman Vince Cable said: "It's not enough just to hold your hands up and say sorry without having a plan for making sure that the same thing doesn't happen again."

Most people (particularly in the blogosphere) know this already, and many (including myself) believe admitting to being partially responsible for the worst economic mistakes for generations is not enough (i.e honesty) - if he had represented us properly (which as Prime Minister is his job!) he would have always acted in our interests (not the banks), if he was a capable leader he would have asked far more questions (rather than simply listening to the banks), and if he was selfless, honest (and honorable) he would have admitted his mistakes at the time (and resigned without question or delay) ... instead of using spin to create a smoke-screen (e.g. a 'global problem') and deflecting blame onto others (e.g. America - which President Obama will never forget) ... both strategies regularly adopted by those who apply Poweromics* (to maintain their grip on Power).  Given we are fining the leaders of Northern Rock for their failings, perhaps we should fine/charge Gordon Brown for his role too**, so he is made bankrupt, never forgiven and never allowed into a position (or to profit from a position) of power again (e.g. relinquishing any right to a position in the Lords)*. 

* Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed. 

** NB In China he would have been locked up and probably receive the death penalty (for 'economic sabotage').

More 'spin' than 'science'?

For some time the Government have been creating great fear amongst us - warning us all about climate change ... in fact if you listen to Ed Miliband [Secretary of State, Department for Energy and Climate Change] he doesn't mention climate change at all now ... he only mentions "Dangerous Climate Change".

But if we really want to solve the problem (which I'm sure we all do), we need to understand the problem, and to do this scientists (like myself) have to look at the evidence in order to separate 'fact' from 'fiction' ...

Anyone listening to the Government (and the news) would naturally conclude that climate change is being caused by us, because of all the extra CO2 we're creating (e.g. burning fossil fuels) ... so I started to read the IPCC reports on climate change (i.e. to read the evidence), and they indeed state that CO2 is the main 'anthropogenic' gas causing climate change ... ok, but what does 'anthropogenic' mean? Being a scientist, I could not move on until I got the dictionary out ... and it means 'man-made' (caused by humans, or produced by humans).

This turns out to be a key word as again, being a scientist, I immediately had to ask ... so what about the other gases then? To my surprise I found that all non-'anthropogenic' gases (e.g. water vapor) had effectively been ignored. But a second, and much bigger surprise, was about to come ... as I did a little more digging into the science* and found out the following:

"Water vapor is responsible for 95 per cent of the greenhouse effect, an effect which is vital to keep the world warm. If we didn’t have the greenhouse effect the planet would be at minus 18C, but because we do it's plus 15C.

The other greenhouse gases: carbon dioxide, methane, nitrogen dioxide, and various others including CFCs, contribute only five per cent of the effect, with carbon dioxide being by far the greatest contributor of these at 3.6%.

However, carbon dioxide as a result of man’s activities is only 3.2% of that, hence only 0.12% of the greenhouse gases in total, and human-related methane, nitrogen dioxide and CFCs etc make similarly minuscule contributions to the effect too (0.066%, 0.047%, and 0.046% respectively)."

Wow - so water vapor (nb which also includes water 'droplets' in clouds) accounts for over 90%, and man-made CO2 only 0.12% ! ... Surely this is wrong? Well it turns out it isn't - and the IPCC report authors won't actually deny this either ... they'll just argue water vapor is not 'man-made' (because it's mostly part of a natural cycle, linked to evaporation, the ocean, the clouds, and the rain) ! But did you know that? ... Has anyone told you that? Well it turns out that big word 'anthropogenic' at the start of the report was very important ... important for allowing people to create 'fear' and 'spin' ... and as one scientist put it

"Someday the world will wake up and laugh when they finally understand that the entire pursuit of economic ruin in the name of saving the planet from increasing carbon dioxide is in fact a terrible joke..."

Except it's no joke ... as this belief is actually stifling the important science we need to do to ensure real solutions are found (for instance understanding the role of sun, water vapor and how clouds actually form - which, believe it or not, we still don't really know)! In fact the situation is worse than this, as some car manufacturers are now, given all the 'spin', creating hydrogen cars - which would actually create more water vapor!

So why all the 'spin'? Well there are a number of conspiracy theories e.g. to restrict the rate of growth in the East by the West (e.g. China - see a previous post on this), to get taxpayers to be more willing to accept congested roads and pay more for travel (nb the Government also wants to rapidly introduce road pricing to replace petrol tax - before the oil runs out and cars all run on electric!), to create the next economic bubble, to divert blame for taxing people more away from the Government and onto the Climate ... etc etc!

As we know 'creating fear' and the 'use of spin' are all used by people who apply Poweromics**, but they also attempt to use 'blame', 'guilt' and 'threats' using their position of 'power' too - to stop any challenge to what they actually want to do ... e.g. the Government are using their position of power to threaten 'non-conforming' scientists with losing their funding, and take a look at Peter Sissons (a well-respected BBC newsreader) recent article about the BBC with regard to its reporting on climate change too ... Peter (like myself*** and any true scientist) is neither selfish or a heretic, in fact he's quite the reverse - he's someone who really does care, and would like us to learn the truth so solutions can be found ...

* “Solar Radiation Absorption by Carbon Dioxide, Overlap with Water, and a Parameterization for General Circulation Models,” Freidenreich and Ramaswamy, Journal of Geophysical Research 98 (1993) : 7255-7264) ****

** Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed.

*** I'm a big supporter of approaches that create a more sustainable world too e.g. minimizing the massive amount of waste in the world, the use of alternative energy sources to oil, taxing the extraction/use of resources and the conserving/recycling of far more resources too (e.g. just take a look at my book - and not just it's contents [P199-239] ... but the fact that it's also freely available on Google books too! ****

**** If you're not a big fan, or don't have the time to read lots of scientific articles, just take a look at one of the free alternative (and growing number) of reports/videos to Al Gore's 'An Inconvenient Truth' (which Al Gore has been successfully using to travel the globe - and making millions of dollars - telling people about ... rather than simply putting it free on the internet [e.g. YouTube] for everyone to see - does this not tell us something too?)

'We want more Power' ... but do they deserve it?

The Bank of England wants more 'Power' ... but does it deserve it? They have failed to 'lead' and act on our behalf, so why should we give their current 'leaders' more 'authority' and 'power'?

The Government are responsible for setting the wrong targets / goals, removing asset prices (e.g. housing) from the inflation target, and allowing lax regulation of financial services to prevail ... the FSA are responsible for failing to regulate in a proper & responsible manner ... and the Bank of England are responsible for being ignorant to the economic risks and/or choosing to do nothing about them ... 

They are all quite predictably being very careful not to start a blame game - and why? ... because they are ALL to blame ! The Government and the treasury are ultimately responsible, yet there has been no change there, nor in the FSA ... or the Bank of England ...  

Personally I find it hard to believe these groups suffer completely from Ignoromics (and if true they should be fired for this anyway). I do however believe they apply a huge amount of Poweromics and operate with a great deal of collusion. David Blanchflower, arguably one of the better and more challenging members of the Monetary Policy Committee (MPC), is leaving and being replaced by Dr Adam Posen, an American Stephanie Flanders (BBC's Economics Editor) recalls from her days whilst studying economics at Havard (can you see even more of the cosy 'club' here?) ... I think the idea was for us to be re-assured by this, but given the comments made on her blogs it's turned out to be very different ...

... and the solutions proposed are not around changing a member of the crew ... but changing the 'leaders' and the 'system'. Take a look at one of the early comments, and my comments below as well (nb there are many more on her blog too):

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Comment 5 (John_from_Hendon)

MMG - Mervyn and his minions MUST Go.

The whole idea of the MPC and the Governor have some from of understanding and will do the right thing in setting interest rates is proven to be wrong and what is worse it is a dangerous falsehood.

We need a new system - not new bodies!

The fact that the Bank 'knew' (and I have it in writing, under both Eddie George and Mervyn King) that their interest rate policy was designed to create a credit bubble as it deliberately and wantonly ignored asset price inflation means that the system must be changed.

They got interest rate policy catastrophically wrong for at least the whole of the last decade. The also knew that they had done so at the time. They are lilly livered cowards who take the Governments shilling and pretend that they are some from of independent experts and are setting interest rates to the best of their ability and skill. (OK, they may be doing their best - but it is totally inadequate!)

Fire the lot and start again. This time the Bank MUST take into account asset price inflation and imported deflation when setting rates - if they do not - the recession will last decades from one bubble to the bust in shorter and more violent cycles and more of the country destroyed each time. Critical to avoiding this - they must restore SOUND MONEY.

Interest rates must value money at some reasonable positive level sufficient to restrain asset price inflation. Asset price inflation is the cause of the banking difficulties along with too low interest rates that created it. So rates up to 4 - 6 percent PDQ.

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Comment 7 (leanomist)

Did Adam Posen predict the problem well before it happened? I believe David Blanchflower almost did (or was at least the closest in the MPC).

Let's ask a few more simple questions:

1. Traditional 'economics' is dead. Does he realise this? 

2. Does he know that real 'leaders' predicted this situation over 20 years ago, and predicted a "New Economics" being born "Out of a Crisis"... 

3. Does he know who predicted this (nb- he was a 'creative outsider' and not a eminent lecturer in economics at Havard), why he said this, and what the new form of 'economics' will look like*?

Business schools are 1-2 generations out of date (cf 21st century practices) and it appears this is similar in Economics too. What we need to do is to ask basic questions, bring more realism to bear and adopt some effective & sustainable solutions for once (not just ones that benefit the speculators, money lenders and gentlemen's clubs). 

David Clift, a Future 500 Leader

* NB It won't be Poweromics! NB Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed. More info available at http://poweromics.blogspot.com

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Comment 8 (leanomist)

Post 5 John_from_Hendon

"The fact that the Bank 'knew' (and I have it in writing, under both Eddie George and Mervyn King) that their interest rate policy was designed to create a credit bubble as it deliberately and wantonly ignored asset price inflation means that the system must be changed"

===========================

... My conversation with an MPC member re the need to include house asset prices inflation properly would support this assertion too ... and hence I agree with John_from_Hendon's conclusion.

Changing one of the 'crew' will do little to stop the ship from sinking, when the whole system was at fault and focused on the wrong targets/goals ... 

... and if the 'leaders' knew this, but chose to do nothing about it, then removing them is arguably the least that should happen (eg. how about taking the losses out of their lucrative pension 'pots' - they would probably have acted then)!

David Clift, a Future 500 Leader

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Comment 19 (John_from_Hendon)

One of the many tragedies of the western World's regulatory systems is that its interrelatedness is not well understood and frankly I can't think why?

This new chap may be young and dynamic but if he was educated into the same fundamentally flawed ideas of economics taught at Harvard (or Balliol) over the last two decades.

Their teaching MUST have substantially contributed to the Credit Crunch. (Leaving aside Milton Friedman's silly ideas that underpinned and gave intellectual support for Thatcherism and Reganomics.)

We are still doing the wrong things! These are after all the people who gave intellectual respectability to ignoring house price inflation and zero interest rates and the dafter quantitative easing! They seem to be surprised that ever lower interest rates gave rise to ever more exotic and dafter and exotic ways for the financial community to fiddle the books to show that they were still making money.

None of the economists in the current cadre of those educated in the unscientific and 'fake science' of economics in the last quarter of a century are fit and proper persons for any responsibility even over a whelk stall let alone the Bank of England's interest rates policy - they have shown by creating the conditions for the recent credit boom and bust that they have failed and their education is a failure. 

(In this I agree with the opinions expressed by the majority of the posters to this blog.)

(MMG - Mervyn Must Go)!

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Poweromics - Hiding problems and deflecting blame

Their is a great deal of anger being directed by MP's towards the UK House of Commons speaker at the moment ... 

Whilst it's probably true he's not got the moral standing to lead the reform of MP's expenses (as he was one of the MP's feeding from the 'trough' ... and tried all he could to stop the information being made available to public) ... he should not become a 'scape goat' - MP's are still individually accountable for their actions, and the moral values, or the lack of moral values, they have demonstrated ... 

Those who apply Poweromics* like to 'hide problems' but to also 'blame others' ... they've not managed to do the first ... and they cannot be allowed to do the latter ...

More people are saying they want to stand as independents now ... but can UK people actually have proper democracy** now (i.e. fit for the 21st Century) ... so we can really have our say !


* Poweromics = People using position and power for their own personal gain, based on poor moral values, self interest and greed. 

** We only get a say/vote once every five years in a general election, and even then only a small minority of votes actually make a difference as to which of the two main parties gets in Government ... the only votes that effectively 'count' are fringe votes in marginal constituencies (2-3% of the total).

Comment added to Nick Robinson's blog - 192 (Will he stay or will he go?) and 172 (A question of when, not if?)

PS Is David Cameron wanting us to have more of a say too? ... or justing wanting to bring his own form of Poweromics to bear ... ?

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Comment 171 (LippyLippo)

MPs are acting like the losing team on the 'Apprentice'! They all participated in the expenses sham that lost them the confidence of the public, but in their desperation to save their own skins, they all turn on the guy who gets flustered when questioned by Sir Alan, hoping he'll be the one to get fired, leaving them to go back to their (second) houses!! 

Their hypocrisy is astounding. They stood up, one after the other, to demand the resignation of the Speaker, hoping that they could pin the blame squarely on one scape goat before sticking their heads back in the trough. Do they think we're stupid? Do they think that this crisis will simply go away if they manage to pin the blame on the Speaker? That his sacking or resignation will somehow atone for the false claims, the dishonesty, the misuse of tax payers' money? It will not. It must not. This demands a root-and-branch review and the deselection of guilty members. Maybe the Speaker does deserve the boot, but he is not alone by any means. We must not let MPs off the hook over this, wiggle as they might.

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