A close shave

I'm not much of a one for televisual stimulation, but every now and then my piggy eyes are drawn to the corner of the living room. What caught their attention today was an advertisement for a razor. Just a razor. Apparently it has more than one blade and this is meant to give a man the ultimate satisfaction. It made me ask something I have wondered about for a while. Why should we get excited by a close shave?

Is it one of those things people care about only because advertisers tell them they should? Look at the reality of the thing. Almost all men (and more women than care to admit it) grow facial hair. Some of us think we look marginally less absurd if we cut it off than we would if we let it remain in place. So we buy a device to assist us in that task.

It all used to be pretty simple. You'd have a cutthroat razor which you kept honed to perfection on a leather strop. They lasted for decades. The only drawback was that in the hands of the very drunk or the very stupid they could live up to their name, but no one cared; if you killed yourself while trying to scrape unwanted hair from your face it was probably inferred that your life was hardly worth living anyway.

One day a magician in Las Vegas, or was it a sword maker in Sheffield, invented little blades and a metal holder to screw them into. The blades could be replaced when so blunt that you shed more than a pint of blood in front of the bathroom mirror in the morning. Buying a packet of blades and replacing them when necessary was a pretty simple affair. Unscrew handle, take out old blade, insert new blade, tighten handle, try to remember to dispose of old blade in something other than the baby's breakfast bowl. Far too much effort for some, so single units were invented containing a small blade (consisting of very little other than an edge) set into a rigid plastic holder. These would last about three days before going blunt or rusty, so people bought them by the gross.

While all this blade swapping was going on, a bright spark had the idea of making an electrically powered machine for cutting hair from the face. Some preferred the electric gadget, others kept to the more traditional ways; fair enough.

I think it was some time in the 1980s that advertising concentrated on the closeness of the shave, as if this matters to 98% of those who don't wish to sport a beard. Of course there are some people who grow hair at a highly impressive rate and for whom a particularly close shave delays the moment at which it appears they haven't bothered at all. But the rest of us can get by perfectly well without a second or third blade to cut a tiny slither that was missed by the first. Yet still the message persists ... are you satisfied with the closeness of your shave? The question itself prods and nudges the unwary into thinking that a close shave confers benefits without which their lives cannot be properly fulfilled.

It really is a most extraordinary con-trick.

I'm an electric gizmo chap. A pack of cheap Bic disposables lurks somewhere in the bowels of the house in case I forget to recharge the Philishave, although this hasn't happened yet. And how close is my shave? Well, you see, that's just the point. I have no idea. I run the machine over my flabby jowls and end up with a face that looks shaved to me. Could I find a device that cuts off a little bit more? Possibly, but why should I want to? What does it matter? What benefit will result if I do and what detriment do I now suffer because I don't? The answer of course is that it makes no difference to anything.

I am a pasty-faced fat bloke. No one takes a second look at my face as I waddle down the street. Yet according to the advertisement I witnessed this evening I could be a leading international sportsman and an instant sex symbol if only a further fraction of a millimetre of facial hair were sliced away every morning. It's the sort of notion that makes you wonder whether the world has gone completely mad.

Lost, one plot, if found return to 10 Downing Street

A feature of someone having a job beyond their capabilities is that from time to time they will expose their true limitations. We see it in every walk of life. So many couples have bought pubs with a view to a blissful life of serving pints and ploughman's lunches, only to find they cannot manage staff or cope with the paperwork. As barman and cook they might be stars, as proprietors they go bankrupt. The jobbing builder who has earned a decent living for years by replacing roofs, laying patios, fitting doors and painting houses can find himself a fish out of water when he takes on his first house conversion. And in my own field of work, many a barrister is outstanding at one or two days trials in which the issues are limited but simply cannot maintain the high level of concentration required to present a month-long case to a good standard. It's all a matter of horses for courses. Each of these people, having failed in the bigger tasks, can still perform an excellent service and earn a good living by reverting to the individual jobs they do well. There is no shame in trying something, finding you can't do it and reverting to what you can do.

What is very rare is to find someone who held a substantial position for a long period of time and appeared to know what he was doing, only for it to become apparent later that he really didn't have a clue all along. It happens with fraudsters, but they deliberately set out to deceive and laugh all the way to the bank while their victims pay them. They know they will be exposed some day and just hope the victims will be so embarrassed by their own gullibility that they won't involve the police and will just put it down to experience. It happens also when very skillful managers are given executive responsibilities they cannot cope with themselves, they delegate and take advice and ride through on the seat of their pants. One day they get put on the spot and have to think for themselves, then they are exposed. It has never happened in senior government circles in my lifetime until now. Yes, there were people I didn't rate who held senior ministerial appointments, but that's different, that's just my opinion. Now we are seeing clear objective proof that the man who was Chancellor of the Exchequer for ten years and is now Prime Minister really didn't have the foggiest idea all along.

There have been hints since the beginning. His famous pensions grab, stripping pension funds of their long-standing exemption from tax on the income from dividends on shares, was criticised as something that would lead to shortfalls in funds. Yet there were arguments in favour of what he did - he removed an anomaly, over time the funds would be able to recover, it was necessary to pump money into the NHS and schools so it was a price worth paying. It was possible to excuse it as a political decision regardless of the effect it had on pensions. Nonetheless the criticism remained. Even in 1997 insufficient provision was made for pensions, to take a big chunk out of the pensions pot each year seemed likely to add to that problem. It raised a question about his ability to see the bigger picture.

Money was pumped into the Department of Health and the Department for Education. Eye-watering amounts of money. He called it "investment" and boasted of it as a great thing for the country. The improvements in service for the little people were small in the NHS and almost non-existent in schools. So much was pumped in at the top and so little reached the bottom that questions were asked about the efficiency of the system. Still he boasted that it was all "investment" for the future and (too) many believed him, thinking that "investment" must produce a long-term benefit even if we can't see it yet. He was "investing" so he received the benefit of the doubt. Now it is clear beyond argument that the vast majority of this additional "investment" was wasted on form-filling bureaucracy and pointless, expensive gimmicks. It was not spent on health and education but on exercises designed to make the government look good. And it worked, they won elections, so they carried on with more of the same.

The whole structure of banking and financial services was changed. The single most significant consequence was "light touch regulation" which left the banks and finance companies at liberty to undertake high-risk transactions with no questions asked. They did undertake such transactions and, for a while, appeared to be making a lot of money. That resulted in them, and their employees, paying lots of tax. A double-whammy. Under poor Gordon's stewardship of the economy the financial sector was hugely profitable and he had ever expanding receipts to spend on yet more of his "investments".

Once it all started to unravel we learned a lot about the brilliant man with his hands on the steering wheel. There was something he said late last year which troubled me enormously, although I only touched on it in passing at the time. The decision was taken to ban short selling of shares in financial companies. Short selling is the practice of agreeing to buy shares on a date in the future at a price lower than their current market price. It is done when the market price is expected to fall but it can also cause the price to fall because people infer that those who have made those deals know something is wrong and that the price will fall, so they offload their holdings and supply exceeds demand causing the price to fall. The ban was put in place for fear that an artificial fall in the market price of shares in financial institutions would be manufactured by speculators. Fair enough. Poor Gordon clearly did not know what short selling was because he referred to it as "short term selling". Although I can't remember when I wrote about this, I recall saying that no one who knew anything about the financial world would refer to "short term selling". He could only have said that because he did not have the faintest idea what he was talking about.

And now I finally arrive at the point of this missive. News has broken that poor Gordon had one of his hissy fits on the way to America to be given the type of reception by President Obama that would be given to the Prime Minister of a bankrupt African dictatorship. It is reported that poor Gordon got wind of the intention of the press to suggest he should apologise for getting the country into recession and decided to challenge the reporters who were travelling on the plane with him. He is reported to have put forward three arguments to defend himself: (i) it all started in America, (ii) every previous British recession was created by high interest rates and high inflation whereas the UK had low interest rates and low inflation during his time as Chancellor and (iii) house prices were high because of lack of supply.

When people get angry they say what they really think. It is reported that poor Gordon was angry when he assailed the press contingent. There is every reason to think he believed what he said. Let's see what it shows about him.

His first point is fair. It did all start in America. If truth be told it started in the late 1970s when they were nutty enough to require banks to lend to the indigent, but we can concentrate on more recent times. It started in America because thirty years of bad lending built up a huge portfolio of losses which had never surfaced. They were bound to surface one day and when that day came it would affect the economies of all developed countries. No matter how well or badly each country had been run it would be affected somehow. That goes without saying, but that does not mean that every country would be affected in the same way. The mere fact that it started in America is neither here nor there. No one is blaming poor Gordon for that. He seemed to put forward "it started in America" as meaning he cannot be subject to legitimate criticism for the way our economy has been able to deal with the problem. That is patently absurd. True though his first proposition is, it is nothing by a red herring. He should be able to understand that.

His second point is just breathtakingly stupid. Recession is a continued fall in Gross Domestic Product (GDP), usually defined as a fall in GDP for two consecutive quarters but there is nothing magical in that formulation. GDP can fall one month and pick up the next, generally that isn't a problem. There is only a problem when there is a sustained fall in GDP, yet the problem is not the fall in GDP itself, after all that is just a measure of current economic activity, the problem is that a sustained fall in economic activity bites into wealth. I really don't think poor Gordon understands wealth.

Wealth is stuff that makes life comfortable. We are wealthy in the UK because we have houses to live in, electricity and/or gas to provide light, heat and cooking facilities, we have enough food and clothing to sustain us, we have motor vehicles and trains to allow us to travel, we have facilities in our homes and our towns to provide entertainment and information and we have lots more other stuff besides. Somewhere like Zambia is not wealthy because it does not have these things on anything like the scale we have them. Our lives are comparatively more comfortable, therefore we are wealthier. Wealth is stuff.

In order to maintain our level of stuff we have to maintain GDP because an awful lot of stuff gets used up every day. Tomorrow we need more food, more gas, more electricity, more petrol, more paper, and more of all the things that we consume. A fall in GDP means we can't maintain our level of stuff and, therefore, can't maintain our level of comfort. Over a short period this is just part of the normal swings and roundabouts of life, but over a sustained period it leads to significant problems which affect the living standards of millions because it means a lot of people cannot afford the amount of stuff they previously enjoyed.

So, now we know recession is all about a reduction in the amount of stuff we can afford. What have interest rates and inflation got to do with it and how can they be the only causes of previous recession? I say "the only causes" because that is the substance of what poor Gordon said. His defence is that previous recessions were caused by high interest rates and high inflation and because we did not have high interest rates and high inflation he cannot be blamed for the current recession. That necessarily involves three propositions: (i) it was high interest rates and high inflation that caused previous recessions, (ii) because high interest rates and high inflation caused previous recessions it was not possible to predict any other cause of future recessions and (iii) no matter what changes happened to the economy the first two propositions would remain true.

The first proposition is utterly unsustainable. Interest rates and inflation can contribute to the pressures that cause a sustained fall in GDP but they cannot cause it all by themselves. If his proposition were correct all that would be needed is for the government to direct a cut in bank base rate and recession could be avoided. That is absurd. A highly developed modern economy is a complex web of corporate and individual transactions. Those transactions are decided on by people, real people with all the good and bad qualities people have.

The recessions in the 1970s, 1980s and 1990s were not caused by interest rates and inflation, interest rates and inflation merely reflected underlying problems in the economy. The major cause in the early 1970s was a sustained rise in oil prices which increased the costs of business and caused widespread cut-backs. There were other causes too. The early 1980s saw another sustained rise in oil prices combined with massive stagnation in nationalised industries. There were other causes too. In the early 1990s the recession was almost entirely a result of a false boom creating a credit bubble that popped rather sooner than anyone expected. It popped because other factors caused interest rates to rise, but interest rates did not cause the recession they merely brought out into the open the fact that apparent increases in wealth financed by credit were unaffordabe.

Because the first proposition is unsustainable the second necessarily falls. Yet the second also falls independently of the first. Even if the first proposition is correct, the second does not follow. Even if high interest rates and high inflation caused earlier recessions, it does not follow that other factors could not cause a future recession. Once we recognise that a recession is a sustained reduction in the amount of stuff we can afford, it is obvious that all sorts of factors can cause a recession.

And that leads to the third proposition inherent in the second part of poor Gordon's panicked outburst. Acts of government that change the structure of the economy have the capacity to do more harm than good. They also have the capacity to do more good than harm. What they will actually do depends on factors wholly outside political control. Those external factors are infinitely variable and that fact, of itself, gives the lie to his third proposition.

The final part of his outburst was that house prices rose purely because of lack of supply. At this point it is simply impossible to take him seriously. That argument would not have gained a pass in A-Level economics in the 1970s (yes, it would get a starred A grade today, but that is a different matter). Let's look at the most basic analysis. Price is a product of supply and demand. If supply exceeds demand the buyer is in the driving seat and price falls. If demand exceeds supply the seller is in the driving seat and price rises. OK, fair enough, that's readily understandable. Now let's look at what drives demand. What drives demand is the amount of money buyers have at their disposal. The more they can borrow, the more they can pay. If it is right that supply exceeds demand the seller is in the driving seat but the price he can achieve is limited by the amount potential buyers can pay. Lend them three times their gross salary and they can pay less than if you lend them five times their gross salary. It's not a difficult concept. You would think someone who was Chancellor of the Exchequer for a decade would be able to understand it.

And so we can now see the twilight zone that is poor Gordon's understanding of real everyday economics. Recessions can be imported and destroy our wholly sound economy. Only interest rates and rates of inflation can cause recessions. The only factor affecting house prices is the volume of supply. Does he really believe this nonsense? If he does we are in an even deeper hole than we thought. If he doesn't we now have the final proof that he is so deeply dishonest and mendacious that he is unfit for any governmental position.

But we needn't worry. He'll say something even more stupid in the next week or two.

Is that a goat? Let's scape it.

One problem with democratic politics is that the politicians need votes to get power. They neither want nor need votes for the sake of getting votes. They want power and gaining votes is a means to that end. There was a time when it was pretty much the only way of gaining power, but now there is a string of well-paid jobs with huge power for those who proved themselves unfit for office in their own country. But I'm not going to dwell on the EU, I want to look at domestic politics because today we saw a pathetic, posturing, amoral lunge for power by the meaningless Liberal Democrats which means, in practical terms, a pathetic, posturing, amoral lunge for votes.

I know that the occasional person pops into my parlour from outside the UK, so I should say something about the Lib Dems, as they are known, because only a very close observer of UK politics from overseas is likely to have any idea they even exist. The Lib Dems are our third largest political party, generally gathering a few percent either side of one fifth of the votes cast at general elections. Although there is no direct connection between the percentage of votes cast for each party and the number of seats in Parliament that each party wins, the Lib Dems usually have roughly proportionate representation in the House of Commons. They have a habit of blowing with the wind, switching their policy platform quite radically from left to right according to the whim of opinion polls, but still they are a minority party with no chance of power unless an election results in no majority in the House of Commons for either of the main parties, in which case they can pledge their voting power in the house to either Labour or the Conservatives, depending on which of the larger parties offers them the tastiest sweeteners. The Lib Dems were formed in the late 1980s by a merger of the Liberal Party and a breakaway faction of the Labour Party which decided Labour had lurched too far to the left (despite the most prominent members of the faction, known as the SDP, being leading figures in the heavily left and heavily disastrous 1974-1979 Labour government).

The Lib Dems have been a bit of a mess for many years. They have had competent leaders and some competent MPs from time to time but something always turns up to spoil things just as they seem to be getting somewhere. Without doubt the most able Liberal leader in recent times was Jeremy Thorpe, until he found himself on trial for conspiracy to murder; his acquittal proving insufficient to resurrect his career. Then they had David Steel for some years followed by Paddy Ashdown, two chaps of great ability but unable to present a third course while the country was arguing between 1970s-style state socialism and dipping a toe in the waters of free enterprise. Charles Kennedy followed Paddy Ashdown. An immensely impressive speaker, poor Charlie was an even more impressive drinker and left behind him a party machinery exhausted by having to cover his arse when he was on a bender. Then came Menzies "Ming" Campbell, a hugely sensible and pleasant man, an Olympic medallist and a perfect choice to be a fair-minded and much liked High Court Judge. Unfortunately he was a party leader instead, in which role his rice pudding-like lack of charisma came to the fore. Now their leader is someone called Nick Clegg, young and rich and with even less presence than Sir Ming Campbell. Their real leader is their Treasury spokesman, Vince Cable, created real leader by the BBC which seems to give him far more coverage than any politician other than poor Gordon Brown. Today Vince had a spot in the party limelight at the Lib Dem's Spring Conference.

One reason, indeed the only reason, Vince deserves the limelight is that he was the only leading politician from any of our three main parties (other than former Chancellors of the Exchequer Ken Clarke and Nigel Lawson and former PM John Major) who warned consistently about the problem of excessive credit. The opinions of Clarke, Lawson and Major were dismissed as the bitter bleatings of yesterday's men, whereas Vince was seen to be a here and now politician. All credit to him (no pun intended) he was right. He was also right in arguing against the government taking major interests in struggling banks because the result would be transferring massive debts from the existing creditors and shareholders, all of whom volunteered for the risk of losing money, onto the shoulders of Mr and Mrs Ordinary-Taxpayer, who did not. Full marks, Vince can spot a problem and explain it clearly. He is not so good at coming up with workable alternatives to the government's panicked lunges from one bail-out to another, but no one's perfect.

The time he becomes awful is when he descends into raw vote-grabbing, then he is cringeworthiness personified. Today provided a classic example. He made a speech to the Spring Conference, a rallying cry to both the party faithful (for whom "both" seems an apt description) and to disaffected Labour supporters. The Lib Dems know there are lots of people who voted Labour at the last election who are not prepared to do so at the next. Some will switch to the Conservatives, just as they switched from Conservative to Labour in previous elections. Others might vote Conservative but might vote Lib Dem, it is these he seeks to woo. The course he chose to take today was to appeal to the basest and most mindless political emotions, envy and revenge. After ensuring he would get the attention of Labour voters by blaming everything on Mrs Thatcher he turned to his target du jour, "fat cats".

His brilliant idea is that everyone paid more than the Prime Minister should have their income exposed to public gaze. Well, actually, not everyone. Only those who are employed by public companies. At the moment the remuneration of directors of public companies must be disclosed in the company's accounts and to the shareholders. This is a long-standing requirement because shareholders have the right to vote down remuneration packages. Many a large company hires the services of specialist advisors who do not actually act as directors because they do not guide the course the company takes, but their advice is relied on heavily. If they cross the line and become more than advisors they can find themselves in the legal waters of the "shadow director", and very deep and pungent waters they can be. Not a few senior business figures deliberately act as advisors only so that they can collect handsome remuneration without having to expose their private financial affairs to the world. Mr Cable's rant explains exactly why they do this.

A cynic might suggest that these people want money for nothing. I would suggest they want a good level of pay for sharing their experience and expertise with those who think it would be beneficial to receive it. We can all hold our own views about whether the remuneration is justified by the level of expertise behind the advice, but, frankly, it is nothing to do with us. And it is nothing to do with Mr Cable or any other politician. Every company has to disclose in its accounts how much it has paid to consultants because it affects the company's financial state, but how much each individual consultant has received is a private matter of no relevance to the financial state of the paying company, any more than it is relevant how much of the fee they pay their auditors goes to each of the individuals who conducted the audit.

Mr Cable was merely jumping on a particularly cretinous bandwagon. We now know that the directors of some banks were lacking in navigational skills. They directed their employers into a quagmire rather than to the land of milk and honey. So be it. It happens. It happens with Billy Blowtorch Plumbing Ltd and Steve Sirloin Butchers Ltd, now it has happened with a number of massive banks. What difference could it possibly have made for the remuneration of directors to be set out in more detail than the law currently requires and for other employees earnings more than £194,000 a year to be named?

How does he think the process would work? "Oh my gawd", says 53 year-old cleaner Gladys Higginbottom of 34 Acacia Avenue, "Royal Bank of Scotland paid some non-directors more than £194,000, they must be speculating on dodgy derivatives and accumulating toxic debt, I will alert my MP immediately and prepare for RBS to be nationalised in three highly inefficient stages." As they would say in the East End of London, do me a favour. Making public the remuneration of employees tells no one anything about how a business is being run. It's just Sunday tabloid prurience.

Perhaps Mr Cable was laying the groundwork for his party to return to a previously favoured policy of punitive additional income tax for those earning more than £100,000 a year. Or perhaps he has let his massive exposure on the BBC get to him. After announcing this absurd proposal he then said "we have to crack down hard on corporate tax avoidance". Not evasion, avoidance. Tax evasion involves not paying what the law requires you to pay, avoidance involves only paying what the law requires you to pay rather than paying more than the law requires you to pay. Did he really mean this? Let's be generous, let's assume he meant to say that he has identified ways in which more tax can be levied by closing so-called loopholes. Fair enough. Put forward your proposal to raise taxes, Vince, and let it be debated. Let's see if your efforts to close what you perceive to be one loophole will do anything other than encourage people to find another. I won't hold my breath.

He then suggested abolishing top-rate tax relief on pension contributions (just as we are beginning to see the true depth of the pensions black hole) and increasing some rates of Capital Gains Tax. This, he claims, will allow tax cuts for the lower paid. Great, that's how much? £5, £10 a year off Gladys Higginbottom's tax bill? Assuming there is any net increase in tax revenues at all, the impact at the bottom of the pile will be negligible.

Throughout Mr Cable's speech there were references to the new bogeyman, the well-paid banker, the current hate figure of populist oratory. It's all a load of complete guff. He can pick on them now to his heart's content. In six months they will be seen for what they are, a very few people who made a lot of money by making bad decisions. We will have moved on from the juvenile blame game to the more serious question of how we pay for the government's cack-handed attempts to deal with current problems. He really should have more sense than to scapegoat a handful of people we had never head of before and will soon forget.

Real food for me, please

A spate of entertaining is about to descend on FatBigot Towers. For reasons lost in the mists of alcohol invitations seem to have been handed out willy-nilly for attendance at the domestic trough and, no doubt, I'll have to do all the cooking. In an idle moment this afternoon I thought about the task ahead and wondered whether I should try some fancy dishes, the sort the cheffy types do on the telly. Fortunately I soon came to my senses. No matter how I approached the subject, I could see no good reason for the menu at FatBigot Towers to list anything other than real food - meat, roots and shoots.

Not that I am decrying poncy nosh, it's rather good fun once in a while to spend a lot of money you don't have on very small portions that taste amazing considering how minuscule they are. There is no point pretending they are a meal, though, they are a fancy snack pretending to be a meal. I've tried making that sort of stuff from time to time and have been quite pleased with the results (leaving aside the many abject failures, of course), but it's an awful lot of work and time and the end product can't soak up much booze, so it's not really suitable for a communal feast with sensible people. The last time I tried something fancy it was from a recipe by Gary Rhodes. Mr Rhodes is the man who finally persuaded me that cheffy stuff isn't real food because he advised that the gravy should be strained through muslin. I mean, really! How has it come to this, that ordinary people who want to try something a bit different have to invest in lengths of muslin and remember not to use fabric conditioner when washing it so as to avoid the sauce getting cloudy? It's all too much fuss and quite disproportionate to any possible benefit.

So I returned to casseroles, roasts, pies, soups and puddings, the stuff I grew up with and everyone I know grew up with. And the thing is, it's so simple. Of course it takes time to work out a combination of ingredients that provides a decent dish, but once that is done you have decades ahead of you in which you can fill tummies to general satisfaction. You also pick up a few little tricks to call on if something goes wrong, but none of them requires a PhD in anything.

Having said that, some people just don't enjoy cooking and others suffer from culinary dyslexia. I know someone who had such a flatmate long ago in undergraduate days, she neither could nor liked to try cooking. On one memorable occasion she was microwaving a pre-prepared meal and exclaimed "Oh god, I hate all this bloody cooking". Fair enough, some just can't get on with the whole thing, so be it, I am sure they are a tiny minority. There are plenty of chilled and frozen products to assist them, so they need not starve (unless they are strict vegans and refuse frozen food for fear it might contain real birds' eyes).

For the last couple of years the cost of food has risen quite considerably, way ahead of average pay increases, so one might think more and more people will be turning to home cooking to keep the price down. The alternative is paying not only for the added cost of ingredients but also for the pleasure of having chicken curry extruded through a stainless steel nozzle in a factory and into a little plastic tray. If you can cut-out the factory and the plastic tray it seems obvious that a meal should be cheaper, and you will know exactly what has gone into it. Perhaps more are cooking proper balanced meals, I certainly hope so.

Yet still there is a stubborn group who seem unable to break the pizza and chips habit. These people's dietary ways are quite beyond my comprehension. At Christmas I heard a distant relative was in hospital with chronic constipation. She is 18 years old and lives (without benefit of clergy) with her boyfriend who is the father of her 18 month-old child. They exist on a diet of cheap pies and pizzas from a well-known chain specialising in frozen food, always with chips. Fruit and veg? You must be joking, the closest they get to fresh vegetables is the lettuce and tomato in their weekly Big Macs. Eighteen years old and hospitalised by the concreting qualities of so-called "convenience" foods. When she was even younger she was guaranteed one proper meal every week or two when she visited her grandparents on Sunday and was presented with a proper meal of roast meat and piles of fresh veg, but those days are behind her. Now she just eats the easy stuff because that is what her mother provided and, frankly, she is too lazy and too blinkered to do anything else. Unless her habits change there seems every prospect of further hospitalisation in the future, it's a desperate situation.

I wonder whether it would take more than someone teaching her a few simple, cheap, nutritious recipes. What about minced beef and onions with peas and mash? Do it the easiest possible way. Hack up a couple of peeled onions, never mind fancy slices, just chop them up a bit, stick the mince in a frying pan and stir it while it cooks, add the onions, crumble in an Oxo cube, add some water. Peel and boil a few potatoes, drain them and mash with a masher. Boil some frozen peas. It's not haute cuisine but you don't even need to bother with optional extras like herbs or spices in with the mince or a thickening agent for the gravy, it's still a good balanced meal and cheap. Or get £2 worth of diced stewing steak at the supermarket, throw it in a casserole dish with a chopped onion, Oxo and water and stick it in the oven for a couple of hours. Mash and peas again if you want, or boiled spuds to save the tedious effort of spending a minute with a masher in your hand. It's really very very simple to turn out basic balanced meals. The level of skill required is no greater than opening a box containing a frozen pizza and remembering to cook it for thirty minutes rather than forty.

The forthcoming guests at FatBigot Towers will get basic simple stuff. There will be no risk of constipation because there will be plenty of veg to go with the casseroles, roasts and pies. I will know exactly what has gone into each meal and they won't get within sniffing distance of an E Number (the system by which artificial food additives are classified by the EU, for those who don't know the term). It's not rocket science, as the saying goes, it's just the provision of the fuel we all need in a cheap and, I hope, tasty combination. It will also provide plenty of blotting paper to help absorb the wines they will bring and, with any luck, a fine time will be had by all.

Never mind the quantitative, feel the ...

So, the merry-go-round has been started up in the great funfair of the vanities that is current economic policy. The government is printing £75billion of monopoly money now with up to another £75billion when this lot fails to achieve anything, so we can make that next month then. This is hailed by the BBC as "Bank to pump £75billion into economy". Doesn't that sound nice? We all need more money in these difficult times, how very lovely of the Bank of England to give us all so much to play with. Super.

It reminded me of a divorce case I dealt with twenty-odd years ago in which the the wife was giving evidence about how much money she needed. After describing her need for a house, a car, two televisions, long finger nails and a small poodle was was being cross-examined about how her husband could be expected to find so much money out of his small shop business. Her reply was "he's hasn't just got the shop he's got a company". Indeed he had, the shop operated through a company with £100 of share capital (ironically owned equally by husband and wife). She honestly thought that a company could just make money appear as if by magic regardless of how much went through the till. "Bank to pump £75billion into economy" has the same ring to it. It gives the impression that this massive pot of cash is going to appear out of thin air and be unleashed for the greater benefit.

Of course the company of the divorcing husband might have been able to raise a loan and, in turn, lend that sum to the husband to pay for the wife's poodle, but there would be nothing magical about it. The company would have to repay the loan with interest and the husband would have to repay the company. No magic new money, just borrowed money that will be a net drain on resources unless it can be put to a profitable use. Such borrowed money is new money for the people who borrow it but the crucial point is that it does not increase their net wealth. It puts, say, £100,000 in the credit column but puts £100,000 in the debit column. As interest accrues further debit entries appear and their net wealth diminishes unless there are corresponding increases in the credit column. That is the whole point about credit and wealth. If you borrow money and make it work for you so that you make a greater gain than the amount of interest you have to pay, then you genuinely create new wealth from that money. But if you just spend it on things that get consumed you diminish your wealth by borrowing. Our pitiful government has defined its own profligate spending as "investment" for the last decade, but that doesn't mean it was investment any more than I might go to the supermarket and say I have invested in a pound of cheese.

The contrast between the divorcing couple and the Bank of England is that the latter can just magic new money out of thin air. There is no need to print a single extra £10 note to do this, all they have to do is press some buttons on a computer and "kerching" they have an extra £75 billion appearing on a computer screen and credited to them. So, if Dodgy Mortgages PLC needs £10billion to lend to individuals and businesses the Bank of England can say "We'll give you £10billion for the mortgages loans you made in 2006 and which are now defaulting." A piece of paper is signed, the Bank of England is now the proud owner of the right to receive payments of interest and capital on loans that aren't worth the paper they are printed on and Dodgy Mortgages PLC is free of those bad debts and has a clean £10billion ready to advance to the waiting hordes. In reality all that has happened is that the bad debts are still in existence but an extra £10billion of cash is now floating around.

The problem with doing this is that there has been no increase in real wealth, just an increase in the money supply. The concept of wealth is at the heart of understanding what money is. Money is just a means of measuring wealth. If I own a house, a car, furniture, books, paintings, sculptures and a set of golf clubs, it is those things which represent my wealth. Whether you value them at £100,000 or £2million, my wealth is exactly the same, all that has changed is the nominal value attributed to each pound. And how do we know the current nominal value of a pound? We take the total wealth in the country and divide it by the number of pounds in circulation (OK, there's rather more to it than that, but it's a good rough guide). Increase the number of pounds in circulation without increasing the assets they represent and each pound represents a smaller proportion of real value, in other words you need more pounds to buy each thing. Prices go up. You have inflation.

One problem with inflation is that it makes ordinary everyday things unaffordable for the least well-off. A great many people spend all their income on the basics - housing, water, food, clothing and fuel. Increase the number of pounds they have to pay without also increasing their income and they have to forgo basics. Not nice. A situation to be avoided if possible.

Throw lots more money into circulation and you risk creating huge inflation of the type seen currently in Zimbabwe. So why, one might ask, is the government following that path now? It seems to me there are two reasons.

The first is to create inflation so that current debts (measured in pounds) represent a lower proportion of national wealth. If you owe £100,000, you owe £100,000. If today £100,000 represents the price of a Rolls Royce and tomorrow it represents the price of a Scoda, your debt falls in real value despite being the same number of pounds. This helps you as a borrower and shafts the person to whom you owe money, which in many instances is ultimately an overseas bank or investor. As always, if something looks too good to be true, it is. Domestic inflation hurts the poorest first last and all the time. That is a high risk for any government to take merely to reduce the real value of debts measured in pounds, and it does nothing at all to debts measured in other currencies.

The second is to provide a stimulus to the economy, primarily by making more money available for the banks to lend. At the moment it is asserted that credit has dried up causing housing sales and high street sales to stagnate, and causing businesses to be short of both working overdrafts and loans to fund investment in expansion. If this stimulus works, real wealth could increase thereby negating the inflationary effect of there being most pounds sloshing about. After all, an increase of 5% in the number of pounds in circulation doesn't matter if wealth increases by 5%, the two balance themselves out. So, if you increase money supply by 5% first and this causes a 5% increase in wealth you will reach a balance even if there is a time lag between the two.

To my mind a number of factors point towards inflation being a greater likelihood than a stimulation of economic growth.

First, there is already an inflationary element in the economy because assets have been overvalued for years, especially housing. Our real wealth has been worth far fewer pounds than it purported to be. While the money supply seemed to be balanced with asset values at their over-stated level, as that level becomes more realistic we will have a surfeit of pounds. To throw more pounds into the national pot increases the prospect of inflation in areas other than housing.

Secondly, there are excessive levels of personal debt on credit cards and through second mortgages which will be repaid through cutting back on discretionary spending. Much of the boom economy was built on spending funded by unaffordable credit, that will end. In addition, those burdened with hefty liabilities on credit cards or other loans will repay those debts by not spending at restaurants, clothing shops, electrical good suppliers and all the rest (or they will go into insolvency). The scope for boosting personal spending by boosting credit is severely limited. Shops selling the optional extras of life are likely to be facing a tough time no matter how much extra cash is in circulation.

Thirdly, the stock market falls over the last year have wiped a third or more off the value of many investment funds. The pressure to save more will be strong. Although historically low rates of interest provide a disincentive to save because the value of what you have saved actually falls when you receive 1% interest and general inflation is above 1%, the fact that existing savings have been decimated requires many to do what they can to build up the funds they will need later in life. This, again, acts to restrict the amount people feel able to spend.

Fourthly, borrowing to buy a house or flat will only be done by those who really need to. The housing market is, it seems to me, still grossly inflated and has a long way to fall to get to realistic levels. Even if it only another 5% (highly wishful thinking, in my view) that is still a £10,000 loss on a £200,000 property; no sensible person will take that on unless they have no other option.

Fifthly, the banks have to be more stringent in their lending criteria than they have been for many years otherwise they will just build up another massive portfolio of bad debt. This affects not just lending for house purchase but for everything else as well. Since they must lend less and with greater profit margins, the scope for a consumer-led recovery is reduced further.

Sixthly, lending to businesses is bound to be tighter as consumer spending falls because potential business borrowers will have to explain how they will be exempt from the downturn in spending. At the moment we hear government ministers complaining that businesses can't get the credit they need to keep going, but this assumes they will be able to keep going even if they get the credit they seek. That is quite unrealistic. Many businesses that were a good risk to the banks a few years ago are now a busted flush.

Seventhly, higher taxes will have to bite within the next year or two because the government has borrowed so much money to throw at the problem. As and when the recession bottoms-out, the higher taxes will have to kick-in, thereby lengthening the time before consumer spending can return to anything like the levels of a couple of years ago.

All these points, and there are probably many more, suggest that it is unrealistic to hope we will spend our way out of this hole. Yet again the government has not had the courage to speak the one unassailable truth in all this horrid mess (and, to be fair, the Conservatives also don't have the guts to say it). For years and years we have been living beyond our means and pretending that we have real wealth and substantial spending power when the reality is that we are nothing like as wealthy as we thought.

We have been living a lie and any attempt to resuscitate that lie by trying to stimulate both borrowing and spending is extremely dangerous. Either it will not work at all, in which case the result is massive wasted expenditure; or it will work in the short term, in which case the problem just becomes greater sometime in the future.

And the greatest error is to think there is a solution other than allowing the problem to work its way out in its own good time. If ever "do nothing" was the right approach, it is now.

Has Gordon gone green?

In the course of a stuttering and nervous performance, the only things missing from poor Gordon's speech to the US Congress were handstands and wetting himself. He spewed out the usual panoply of meaningless soundbites with his customary lack of vision. Unlike his predecessor, poor Gordon cannot inspire through his delivery, he can only read a set script. The difficulty this causes him is that his words fall to be interpreted from the written page without the way they are spoken offering any insight into their true meaning. The BBC has helpfully published what purports to be the full speech (here). It is worth reading in full to see that he wasn't saying anything most of the time, Tony Blair's speeches read the same way but by listening to them you got a sense of meaning wholly missing from the printed words.

There was one thing poor Gordon said that caused me great trouble. The words cited by the BBC are these:
"... it is only by tackling climate change that we create the millions of new green jobs we need."

This really is a classic example of meaningless circular twaddle.

If we are to try to find some meaning in it we have to start by trying to spot a substantive proposition among the fluff. I think there is one, I think it is contained in these words "the millions of new ... jobs we need". He is certainly right in suggesting that millions of new jobs are needed, and you can leave America to one side, millions of new jobs are needed here in the UK as we already have almost two million people unemployed according to the official measure and at least the same again hidden by the selective nature of that measure.

So, we have a logical starting point, we need millions of new jobs. But this sensible proposition is qualified because he actually said "the millions of new green jobs we need". Why, pray, do we need millions of new green jobs rather than millions of any other colour of employment? The answer, of course, is that we don't. It's pure wibble. An unemployed person seeking to earn a living needs a job, any job. Green, black, blue or yellow with pink spots, it restores dignity into his life and puts food on the table. An income of £25,000 earned by making gas-guzzlers puts every bit as much food on the table as an income of £25,000 earned as a climate change interface consultant.

Having found a sensible proposition and seen it rendered senseless by an unnecessary and irrelevant adjective, we can then look at the first part of the phrase to see if that restores meaning. "It is only by tackling climate change that we can create the millions of new ... jobs we need" That is a logical proposition. Incorrect in fact, but internally consistent. If no jobs are available from any other source, they could, in theory, be created by projects to tackle climate change. But it is not his case, and could never be his case, that tackling climate change is the only source of new employment. So that can't be what he meant to say.

Let's see if it can be approached in another way by extracting different words. Try this: "It is only by tackling climate change that we can create ... millions of new green jobs". That works, but only if we have a definition of "green". Indeed, it works only if the definition of green is "a job that tackles climate change". If this is the correct interpretation, he said it is only by tackling climate change that we can create jobs tackling climate change. It's hard to disagree with that as a proposition, it is as true as saying it is only by tackling the lack of gas-guzzlers that we can create jobs making gas-guzzlers. It is true insofar as it goes, but it doesn't go very far because it merely states a truism more accurately expressed in reverse - it is only by creating jobs making gas-guzzlers that we can tackle the current lack of gas-guzzlers. Similarly, it is only by creating jobs tackling climate change that we can tackle climate change. Yet this doesn't express his full point because it makes no mention of the need for those jobs.

We can always test a proposition starting "it is only by doing X that Y can result" by asking what the position would be if we don't do X. Poor Gordon starts "it is only by tackling climate change" and then talks about jobs. So what will happen to jobs if we don't tackle climate change? Well, it rather depends on what you mean by "tackle climate change". He didn't say what he meant, which leaves us with an infinitely variable concept. Assuming he did not mean seeking to change solar output, the churning of the oceans, the speed of the winds or any other of the thousands of natural contributors to our climate, it is probably fair to infer that he meant the alleged influence of production of carbon dioxide by industrial processes and the use of such wickednesses as motor cars and aeroplanes. If that is right, it follows inevitably that jobs will be lost as industries are forced to increase their costs or close completely. So, if we don't tackle this aspect of climate change existing industrial jobs will be preserved and if we do tackle it existing industrial jobs will be lost. That's not a good start for an argument about the benefit to employment of tackling climate change.

Against this background of losing some existing industrial employment, where does poor Gordon's analysis stand? Having lost those jobs it is necessary to replace them but without the new jobs doing the evil that required the old jobs to go. Thus, we find a need for "millions of new green jobs". Yes, this is good, we have found a possible way in which there is a need for "millions of new green jobs". Ah, but there is a problem, the very thing that causes that need is said to be the creator of the "millions of new green jobs". No, that doesn't work. Tackling climate change in the manner I have identified creates a need for millions of new green jobs, but it does not create millions of new green jobs it merely destroys millions of old non-green jobs.

I have to admit defeat. I cannot find any sense in what poor Gordon said. His conversion to greenieness has been adjourned.

From simple to sinister

It is now Sunday evening and many have already written about a most extraordinary explosion of brainless vitriol from the deputy leader of the Labour Party, simple Harriet Harman, nonetheless I will not be able to bring my blood pressure under control without saying my piece, so here it is.

This morning the Leader of the House of Commons and deputy leader of the Labour Party was interviewed on BBC television. Her interviewer was a tame poodle of the Labour Party, a man whose wife is not only the daughter of a former minister under the previous Labour government but also a close friend of the woman he was interviewing. This was undoubtedly a good thing. Some have bemoaned the lack of criticism in the questioning and the failure to follow-up daft answers with any sort of penetrative analysis of the weakness of those answers. They have a point, but they miss the real value of allowing someone like simple Harriet Harman to be interviewed by a receptive sponge. It allows her to say what she really thinks, safe in the knowledge that she will not be contradicted or challenged. And that allows us the chance to see how very dangerous she is.

She was asked about the pension arrangements of Sir Fred Goodwin, about which I bleated a couple of days ago (here). Her response (see BBC article here) was in three parts. First she said Sir Fred should not count on drawing his pension "because it is not going to happen", then "the Prime Minister has said that it is not acceptable and therefore it will not be accepted" and finally "it might be enforceable in a court of law, this contract, but it is not enforceable in the court of public opinion and that is where the government steps in". I doubt that she has any idea of the meaning of these three statements, so I'll see if I can help the poor cow.

Her first assertion, "it is not going to happen", a standard form of words used by mobsters. When I dealt with criminal work at the Bar I occasionally acted for people suspected of involvement in organised crime. Some of them had long criminal records and were very likely far more than merely suspected, a couple were later convicted of Mafia-like activities and all suspicion was removed. They operated their business by deciding in advance what the result should be and using any means at their disposal to achieve that result. A brothel is for sale and Robbie the Rasta wants to take it over, Big Terry the mobster says "that is not going to happen". The next day Robbie the Rasta is found to have sustained injuries to his knees and testicles from a number of baseball bats and Big Terry ends up in charge of the brothel. Well well, what a surprise. If you decree the result in advance you are placing yourself in the same camp as Big Terry because you are applying the same standards he applies.

Her second argument is even more worrying: "the Prime Minister has said that it is not acceptable and therefore it will not be accepted". Have we really descended to a state in which the Prime Minister can dictate whether individual transactions will be honoured? Have we really descended to a state in which a senior government minister can boast that we are subject to Prime Ministerial fiat? The sad thing is that we have been in that position for some time. So many laws now give ministers discretion to make major decisions without having to seek specific approval from Parliament that it is hardly surprising to find the government thinking the default position is for more and more matters to be subject to ad hoc exercises of ministerial discretion. None of the major recent decisions taken about the economy have been subject to Parliamentary scrutiny, or, if it comes to that, even of cabinet discussion. The Prime Minister and Chancellor of the Exchequer have decided between them to borrow and spend billions of pounds without anyone else having a say at all. Simple Harriet is merely taking that position one step further. Of necessity she has to be seen to support poor Gordon as he lurches from misjudgment to misjudgment. Her hero has within his power the right to hand over billions of pounds to RBS, so why shouldn't he be presumed to have the power to decide how £693,000 a year of that money is spent?

Her third proposition is the one which identifies just how deranged she now is. Remember that the basis of her point is that Sir Fred Goodwin has a legally enforceable contractual right to receive his pension; she is accepting for these purposes that he has a legal right to the money. Then she seeks to suggest that legal rights are subject to "the court of public opinion". Although she is pretty thick, it is hard to imagine she really believes this to be the case. But let's take her at her word, and assume she does believe it. What is "the court of public opinion"? Well, first it is not a court. In a court you have to argue a case against a background of laws. The law trumps everything. Public opinion is just that, the current state of opinion as measured by ... ah, there's the problem. Public opinion cannot be measured except by asking a sample of the public and extrapolating the balance of views held by that sample to find the general public opinion. It is not a reliable way to gauge anything because so much depends on the chosen sample and the framing of the question. And it can change tomorrow and the next day.

Let's put these two questions: (i) do you think Sir Fred Goodwin should receive a pension of £693,000 a year for life and (ii) do you think contracts should be upheld? And let's follow simple Harriet and assume the answer to the first question is in the negative. Public opinion can then be said to be in favour of preventing Sir Fred getting the dosh. It doesn't take a very prescient person to guess that the answer to the second question will be in the affirmative. So where does that leave "the court of public opinion"? It is giving contradictory rulings - that he should not receive the money and that he should receive the money. How do we resolve this conflict. That, it seems, is where the final part of her third proposition comes in. Not only did she say contracts are subject to "the court of public opinion" but went on to say "that is where the government steps in". But the government cannot step in to enforce the rulings of the "court of public opinion" because those rulings are contradictory. In other words she is not, in substance, arguing that public opinion should dictate whether a contract is enforced, she is saying the government should have this power. Seeking to justify her position by relying on public opinion is just a smokescreen.

The position she puts forward is deeply sinister, but it is also consistent with everything she has ever stood for and argued for. She is a dedicated Marxist for whom The State can do no wrong. The arbitrary exercise of power is an inevitable outcome of The State being more important than the people. Simple Harriet is far too stupid to think through what she says, she is in a blind panic to keep her career alive by appealing to the basest instincts of her core supporters. Her absurd comments will come back to haunt her. In the meantime I look forward to her making a bigger even arse of herself when she has to back-track, as she undoubtedly will.