The great energy awakening

I saw a SUN leader today which urged the government to cut the excessive green taxes that we face in the near future, apparently as Italy and Spain are already doing. 

At last perhaps, after many years of eco-loons parading their virtues for all to see, there maybe the slow realisation that the fantasies of the greenies have no bearing on reality. China, whence our Xmas presents are to be made, is currently suffering from extreme power shortages with factories closed. This will at least give a chance to catch-up on supply chain issues, but is both unlikely to reduce prices as scarcity increases and also, umm, involves them lobbing another few billion tons of coal into their power system. 

As such, our efforts of our own pale into insignificance. And the ultimate victim must come in the form of "Net Zero 2050."

This plan, indeed law thanks to a virtue signalling parliament, has no basis in reality whatsoever, the technologies to make it happen do not exist nor the political will to build the nuclear baseload we would need.

But the biggest piece in buy-in, to change peoples' lives so radically you would need their support. Yes lots of people emote about green issues but as we know, most still drive diesel cars. They expect someone else to do something. In this case, it will start to impact everyone from now on, which I personally think is a huge vote loser and so will come upon more stringent scrutiny in the future. 

American Corporate Culture

The energy crisis is so shocking, let's try to raise a smile instead for the weekend.  As always, I turned this morning to Dilbert  - Scott Adams' worldview is refreshingly unusual, and it frequently turns into excellent humour - to find in the opening frame, the Boss asking:  If anyone has an objection to my plan, this is the time to voice it.

Well, you can find out how it ends here.

My own personal encounter with this cheery manifestation of American business culture was as follows.  Our London office, staffed mostly by Brits, was in receipt of a dynamic new American CEO, who immediately instituted some far-reaching changes.  He duly held a 'Town Hall Meeting', at the end of which he asked for questions: "- any questions at all".  

Accustomed to the British style in which this invitation was to be taken literally, up spoke Bob, a middle-ranking manager, with a courteous but penetrating question that was absolutely on point in the circumstances.  He got an answer.

When the executive team next assembled, the CEO said to us:  Now obviously everyone assumes Bob is going to get fired now, but you can tell your troops, I'm going to overlook it this time: he's OK.

The Brits amongst us glanced around at each other, somewhat stunned.  None of us had assumed anything of the sort ...    Yep, in the Land of the Free, some elements of the freedom package are selectively applied.

I'm sure there are several other unnerving stories out there, so go for it.  Did I say "smile for the weekend"?

ND

Energy crisis continues - where is the clamour?

If anything, I am amazed at how little the energy crisis is hitting home. Gas prices are 200% up and this means that we will shortly be paying well over 100% increases on our domestic bills. So much for keeping a lid on inflation, this alone will drive inflation to over 2% per annum without any other factors. 

It still seems to be just a business news page issue, the petrol shortage, although energy for transport is seen as something different. To be blamed on Brexit or the pandemic as per your choice. 

The energy crisis has none of these factors. The Government is 100% squarely to blame over the last 10 years. Cutting gas and oil stations too quickly, not replacing nuclear and then over-relying on Wind and Solar when they are not fit for core supply with the current lack of battery capacity. This is before we get to Nick's post of the lack of gas storage. The whole of Europe is suffering the same issues. 

How these costs work themselves out will be both interesting and horrifying. Costs and prices will go up as input costs are hugely increased - no both wages and energy. Countries, cough America, with domestic supply will have a huge advantage for the next few months. China is struggling, rationing power all over the place where it can. 

Why the media and opposition can't see what a hole the Government is in over this and one which for which there are simply no short term answers.

Can the Tories recover their sanity?

 Today is the start of the Tory party conference. Whilst ahead in the polls against the mad left of the Labor party, they reality is this feels alot like 1995/6 to me. Back then, John Major's Government had lost its way, focusing on some bizarre things like the Cones hotline. Their credibility was shredded by the ERM debacle and never recovered. Blair breezed to a landslide in 1997. 

Today the Tories are lost, Boris is raising taxes to pay for the pandemic, they seem to think that wage rises are the way to improve the economy and that Brexit related shortages are not their fault. The thing is, most of them are and for now the public, unhappily, are ready to accept the Covid excuses, that won't last much longer in the face or incompetence. 

Also, the lack of ability to nail some poor behaviours is not helping. Take the DVLA, as we noted here they managed to be on strike and on furlough for long periods last year. Refusing to work at the Unions behest. Now we find ourselves lacking in qualified HGV drivers, the lack of new ones can be squarely blamed on DVLA unions officiousness - if only anyone from the Government could put two and two together. Instead, despite lacking drivers, the Government is against allowing in foreign drivers at a time of desperate economic need. This makes no sense whatsoever, there is no upside to this decision. Get the drivers now and plan for the long-term - don't plan for the long-term during the short-term crisis. 

Wage rises are another example of muddled thinking. Of course, over-supply of labour pushed wages down and effectively, along with China imports, caused the deflation which has left us with record low interest rates for over a decade. Closing off both these taps at the same time is going to be inflationary - what good will that do if rising wages are inflated away? There needs to be productivity improvements to match the rise in wages for sustainable growth - automation and digitalisation are the key drivers here which should see taxes cut for business investment.

The pronouncements of Tory ministers are very far from any complex understanding of the situation they find themselves in and Boris famously has no ideology but instead divines the populist will of the moment. This means despite lots of talk about long-term there is no George Osborne sense of actually meaning it or doing much to deliver it. 

My personal view is the Tories are at the edge, reliant on Labour being so abysmal to allow them to continue, but it wont be long before this is overcome if they continue with the manifold misteps of late. 

Insurgency in British Politics

A while ago in Parliament, when Corbyn was still leader, he accused Boris of being a "phoney outsider" - an odd, Westminster-bubble insult as we noted at the time.  Goes to show, though, how much of an advantage being an insurgent is nowadays deemed to be.   Corbs, of course, had been told that being a genuine outsider was his USP, and he wanted to see off any pretenders to this crown.

This was brought to mind as I found myself pondering how to vote in next week's local referendum on whether Croydon should switch from the Leader/Cabinet system of local government to the Elected Mayor variant instead.  (Sadly, the old Committee System is no longer on offer.)

How does this referendum arise?  Well, enough people signed a petition: but why?

Because the local Conservatives, who always used to hold the borough council (and, at one time, all 4 parliamentary seats, as we had in them days**).  But demographics have worked against us and it's been Labour for nearly 8 years (and they also have two out of three MPs now).  But the popular vote is still majority Conservative across the borough as a whole, the ward boundary arrangements not favouring us at all.  So the Elected Mayor wheeze is designed to keep Labour out of power, because they may still command a majority of council seats after the next elections in 2022.    

Given that in their 8 years of control Labour have literally bankrupted the town with their self-aggrandising Toytown politics, you might might think that's a bit pessimistic about the good sense of the Croydon electorate; and maybe it is - though fewer people seem to care about the bankruptcy, the blatant corruption++ and even the squalor of the council properties than you'd imagine.

But equally there's huge, sluggish apathy in all directions.  So the push for a mayoral putsch, which has aroused passions amongst those in favour but barely any other reaction at all, seems quite exciting and, well, insurgent.  I can easily see it succeeding: probably a low turnout with 80% in favour of a mayor, or something bizarre like that.

This is what the left hates about the Tories: endless flexibility when it comes to policies & ways & means.   They hate Boris, too, but seem unable to do anything about him.  They wish they were the populist revolutionaries but in many senses the permanent revolution is on the right.  

More Croydon Referendum news in due course.

ND

__________

** To be fair, it was a bit aberrational: Croydon Central has been a genuine marginal for 60 years, and the two northern constituencies were natural Labour territory, more akin to neighbouring Lambeth and Lewisham.  But they were held by strong Tory personalities: a much loved local worthy (a hanger-and-flogger); and the saintly Bernard Weatherill (who, as an old India hand, could converse with his electorate in their own tongues).  It was never going to last - and it didn't.

++ Space doesn't permit me to recount the stories, but the redoubtable Inside Croydon is chock full of them, as is Private Eye.

Self Sufficiency Revisited

For it's Tommy this, an' Tommy that, an` Chuck him out, the brute! 

But it's " Saviour of 'is country " when the guns begin to shoot

[In response to a BTL question last week]

Yes, paying for an insurance policy is always annoying when there's not a cloud in the sky: but there's always regrets when the rain sets in.  So now the cry goes up: why do we have so little gas storage?  Why did the government allow the Rough storage facility to close?  Why are we so much worse off than the Europeans?

The answer, ladies and gentlemen, is the usual convoluted story.  Rough (a partly-depleted gas reservoir in the southern North Sea) was cannily sold by its American owners to the old British Gas (when still a monopoly / monopsony) for conversion to a storage facility.  They spent an epic amount of money on it, and were very proud of it when it came on stream.  But there's a very strong case that they never actually needed in those days (1980s), such was the strength and diversity and flexibility and reliability of North Sea gas production straight from the fields.  However, monopolies of that kind are run by engineers, whose solution to every question is "build more stuff", especially when they can just dump the cost on captive customers.  And so they did, gold-plating and all.  How we all laughed.

Two changes of hands later and it's back with Centrica, one of the several linear descendents of the old BG.  Rough is huge, & what we call "seasonal storage", i.e. 180 days to fill it, 180 days to blow it down (rather than smaller fast-cycle: perhaps 30 days to fill and 10 days to blow down).  It found its place in the early years of this century as a perfectly commercial asset, making its way in the very liquid, dynamic gas market that developed in the last half of the 1990s and hasn't (yet) looked back - indeed, it's spread to the whole of Europe.

Where they still, however, do some things a bit differently, most notably in Italy.  Some history: with the exception of the Dutch, they've all been uncomfortably dependent on Russian gas for many decades - enough to make anyone invest in a good bit of storage.  In most countries it is operated more-or-less commercially, with the glaring exception of Italy (also a big importer from, errr, North Africa) where the government mandates in detail the maintenance of extremely costly, and most would say excessive, gas storage inventories, and won't allow the storage facilities to be operated commercially at all.  As insurance policies go, this one is very costly indeed.  The French used to be similar, but not for quite a while now. 

Because ... we now have a thriving and very efficient integrated European gas market, embedded in an increasingly efficient global gas market mediated by shipborne LNG - so folks can choose their supply-security measures from a range of alternatives:  physical storage; virtual storage; call options; flex contracts etc etc.  They all have their pros and cons: I could draw you a nice table in powerpoint®.  So when Rough suffered a couple of explosions and became "too costly to repair" (and after Centrica's pleading for a special subsidy fell on deaf ears) it was allowed to fall idle.  (Though not abandoned, because Centrica dreams of getting a big subsidy to restore it / convert it to CO2 storage / convert it to hydrogen storage / convert it to a theme park / anything, really  ... except shell out for actual, final abandonment.) 

Behind this lay an important factor: the price spreads (seasonal, and general volatility) that drive the value of a storage-option were in the doldrums, and remained that way for the best part of a decade.  Centrica wasn't the only European operator closing storage facilities during that period, by any means.

The decision was perfectly fair, commercially; and not particularly negligent of the government of the day, either.  Because, even now there's little concern we will run out of physical molecules of gas, from a variety of sources: it's just the price that folk don't like.  But hey, markets are like that when there's an Actual Shortage; and more storage in the North Sea would barely be noticed against the global price-spike we are now suffering.

HOWEVER: it's fair to say that at times like these, the whole "efficiency / rely on an effective market" vs "self-sufficiency / don't trust the market" debate gets revisited with a vengeance, and rightly so.  Because There's No Right Answer!  There are some well-tried quant methodologies to deploy, and they illuminate the issue:  but as ever it all hinges on the assumptions.  People who are anyway self-sufficient tend to lord it over the rest and claim their position is the moral high ground.  People who could never remotely be self sufficient (e.g in Belgium, where there is no indigenous gas whatsoever) are, faute de mieux, rather keen believers in open markets.  I once had a very interesting discussion with a Chinese person (a commissar with a commercial delegation) who, on receiving a presentation about cross-border gas and electricity interconnectors in Europe, commented sniffily that it was a very bad thing for a country to be reliant on imports for gas and electricity.  I politely remarked that yes, it was a debating point for several nations, not least those who import almost all of, *ahem*, their oil ....   I digress.

This is indeed a debate we return to periodically here, not least with our good friend Sackerson.   And we've discussed Rough specifically, too.   There have always been fair points on both sides.  Personally, I'm way up the open-market end of the spectrum.  But it's a continuum, and if you can ever identify clearly enough that the risks are increasing (volatility is generally a good metric) then you can justify a higher insurance premium - be that in the form of storage, call options etc etc.  Since it's been going that way since Jan of this year (I first wrote about it here in Feb), you may be sure all the capable players have been doing just that.  And, by the way, there's no obvious reason why volatility should be going away any time soon, and plenty of reasons why it should stay high.

ND

New source of tanker drivers: not what you'd guess

So at the weekend I was chatting to Someone Who Knows, & apparently ... the mass lay-off of commercial pilots has resulted in significant numbers of them becoming long-distance truckers.  (a) They have the skills!  (b) they are totally reliable;  (c) they can deal with complex away-from-home schedules.   

And they make decent money trucking.  What's not to like?  Not as if there will be many flying hours for them any time soon.

(Of course, how long they can hack it without hot and cold running stewardesses is another matter.  Yes, I've known some pilots.  Still, some of those cabs have proper beds ...) 

ND

Gotta love a petrol crisis

 Last year it was toilet rolls, the flour...

Now the old favourite a good old scare about petrol and, err, boom. There is no petrol. 

Can confirm out of my window a 1 mile queue to the only petrol station with any left around here currently with a very happy franchise owner no doubt. 

These crises are such a good example of the downside of the risk-cost management approach of just in time delivery. Who wants expensive stock when you can rely on 99% delivery of enough product. Only the 1% of the time is rather painful.

As to the Government, nothing can be done. If petrol stations all get emptied, then indeed there is a crisis. Saying there is no crisis just makes it worse as people second guess. The crisis subsides in a few days when the cars are full and the stations can gradually re-stock. 

Perhaps the only lesson for now is that with a shortage of HGV drivers, perhaps there does need to be a hierarchy of need to allocate our resources - food, power, petrol, public transport, ambulances - these could have some priority to available resources, but all too complicated to figure out and implement before the crisis is over. Endure it we will!

Energy Crisis Rumbles On

This could get interesting.  Thus far, nothing fundamental has happened that should cause deep alarm, and the (UK) government has actually responded quite intelligently.  But there's an obvious risk that nerves are lost and mad policies get enacted in a hurry, which later become hard to unravel (see several of Sunak's little wheezes over Covid).

First of all, what does anyone expect when the whole world (a) is trying to stop using coal (yes, even China and India, though not trying very hard); (b) has installed epic quantities of wind power; and (c) is recovering strongly from the pandemic, including running big schemes for massive infrastructure development?  Oh, and the world's biggest producer (little Volodya, this means you) is willfully holding back supplies for political reasons?  

Commodity price spikes, that's what.

Although every country will have its special circumstances, the basic phenomenon is hitting everyone.  So - the market (and it's only relatively recently that the gas market has become global, thanks to LNG and the gradual cessation of mad oil-linked pricing in the Far East) is functioning correctly!    

One of the first things that will happen is that US shale producers (those still standing, that is) will be dusting off their drilling plans, having experienced an awful 18 months of rock-bottom gas prices.  That'll help.  (Wonder whether Boris will take another look at fracking, too ... but not this side of COP26!)   And not just gas production: the economics of a whole range of energy-related items will change, too: grid-scale batteries - the major beneficiaries of electricity price volatility, which is what we're seeing - are making absolute fortunes right now.  Some will benefit hugely, some will not:  the list is endless.

But what might policy makers stumble into at a time like this?  Actually, Kwasi Kwarteng gave a very good defence of the free market when he spoke over the weekend (as did Boris in his incoherent bumbling fashion): hopefully this means they aren't inclined to intervene in stupid ways.  The principles they've given for NOT bailing out the tiny suppliers (who shouldn't even exist - a real indictment of Ofgem that they ever got supply licences: many of them are outright scammers), but ensuring the smooth functioning of the "supplier of last resort" mechanism, seem prudent enough.  But the need to intervene in the chemicals industry (which I think is fair, given we are in uncharted territory) might result in mission-creep on other fronts.  The special-pleaders are forming a long queue ...    

What else?

Russia:  the Euro-wallahs are pretty angry with Putin's naked ransom-holding over Nord Stream 2.  What will they do?  Germany has an election coming up ...

Europe:  expect plans to shut down coal & lignite plants to be thrown into reverse (but not this side of COP26 ..!)  Even the Graun has noticed that Europe is fundamentally hooked on natural gas, whatever the greens might like to wish for.

Nukes:  EDF will be salivating at the prospect of a large-scale failure of nerve by HMG on a new public finance mechanism for more new nukes.  Rolls Royce won't be far behind with their odd "mini-nukes" plans (they aren't so "mini" at all).

Lefty-greens:  these types never miss an opportunity to set up their demented wails ("if only we had gone over to 100% wind five years ago, none of this would have happened ... oh, wait a minute ...";  "this shows the need for 100% nationalisation and a New Green Deal which involves everything we've ever wished for including Trans Rights, all bundled up together in green string") etc etc.  I think we may safely ignore them, just as Kier Starmer wisely does.

COP26:  The entertaining prospect emerges that November's COP26 might take place against a background of power cuts, if not to the conference hall then to industry.  (Actually I think that's more likely in Feb-March, but we'll see).  In any event, the whole thing has become more problematic for Boris and his longed-for global "king of the world" PR triumph, because even though most countries will politely defer big "retrograde" measures until after November, few of them will nowadays have quite as much stomach for "wind power solves all problems", or "you rich nations can easily afford $100bn p.a. for us developing nations" - in private, anyway. 

There are loads of other potential ramifications but I'll stop there for now.

Will the lights go out?  Regular readers will know I endlessly back National Grid to prevent this.  But this year, the cost of doing so will be very high indeed.  And you know what?  If we get a serious cold spell, they might actually fail this time.

ND

AUKUS - welcome news indeed

Back in June I wrote here [OK, Cold War It Is]:

Joe, you and your new posse gotta rescue already-suborned New Zealand, and make Australia feel a lot more comfortable with its situation.  Fast.  Otherwise it'll be clear that your reach is only to those lazy countries that are a comfortable distance away from the coming action in the Far East.   And even they will still be defending their precious Sino-exports and graduate-student fee income, hoping nobody will notice or mind too much.

He was listening!  And now we have AUKUS, replete with new nuclear subs for Oz.  (Gotta love the choice of name: not sure AUSUK would have worked at all ...  At least someone was giving half a thought to the matter.)

A bit of context.  What has recently become common parlance as "the Five-Eyes (intelligence) community" is officially AUSCANUKUS, with the 'Aus' being Australasia.  (You will sometimes find people, e.g. Wiki, inserting an 'NZ' but that's technically spurious.)  Sadly, NZ has been so thoroughly suborned by China, they've effectively self-selected themselves out of the inner circle; and we have to guess Canada had no particular reason to be in on this latest one.  Pity, but there it is.

Now to the reactions.  China very hostile, natch: say no more.  France, hahah!  Crocodile tears all around.  They were screwing up their own Oz-deal, and had it coming.  What are they going to say to us - if you don't back-track, we'll let all those refugees sail across the Channel?  (Oh, wait a minute ...)   In fact, what we'll be saying to them is: pipe down, Johnny Frog, or we'll leave those troops of yours in Central Africa with no helicopter support or aerial reconnaissance.

And everyone else on the world stage?  Well, by Heaven, after the Afghan debacle, something had to be done, or else the Taiwanese and many others besides would have been starting to make their accommodations.  Let's hope there are several other good ideas where this one came from rolling out over the weeks and months - most especially including something significant and soon for New Zealand, please.  As often noted here before: the lines of logistics in politics - particularly in foreign policy - can be very short.  Imagination is everything.

Which brings us to the Labour Party - which rushed to applaud the whole thing!  With a speed that must leave plenty of domestic lefties just reeling.  Even the Graun is more or less onside, even if leaving themselves a bit of equivocal wriggle-room.  (Gad, these people are so easily blindsided!)  We can expect some pushback to this amusingly tame position, I expect, in the run-up to Party Conference.  (Perhaps Starmer's Lotto crowd plans to make it yet another dividing line for advancing their really quite ruthless purge.)

Anyhow: credit where it's due - hats off to Biden this time.  

(I reserve the right to call him senile again if he drops the ball next time, though.)

ND

More power disaster

 UK power prices soar after key cable hit by blaze - BBC News

Oh dear, so the earlier in the week incredible rise to £345 per MwH has been easily surpassed now by another £100 per hour or so.

Oops, and this is long-term, half the interconnector gone until March. Talk about bad luck, CFO's at retail power companies are going to be having a lot of sleepless nights. 

Maybe we should have built that Iceland interconnector after all!

UPDATE

I see Utility Point and Peoples' Energy have both ceased trading today. So much for fixing your domestic pricing....will be last man standing shortly. Maybe Centrica's share price will have a counter-intuitive bounce!

Time to switch off

 I really mean it too..

Check this story out - a very well written piece in Bloomberg that actually factually summarises all the relevant key points at hand. 

Due to no wind, there is a 10% gap in energy production in the UK this week. France has many of its nukes off-line, so we rely on back up coal and gas. Right at the point where global supply chain issues mean that prices are soaring.

And I mean soaring, one contract on Monday went for £1760, as opposed to the usual £50 per KwH. The average a mere £345 - just a seven-fold price increase for the week. 

Of course, the wind will blow again, but there is no way this episode does not lead to markedly higher consumer prices over the winter. Cold spells in winter now are going to cost the wholesalers even higher prices than this as supplies of gas are so tight. 

As such, time to make sure you turn of unused plugs around the house and look to limit consumption where you can. My rough guess is electricity prices will double over the winter at a minimum from where they are now and stay that way for a while. Worst case will be 3x or 4x the price in January.

Hello, is that inflation I see coming down the road at speed?

Boris blows it

 Maybe I am a slow learner, I gave the Government a break on Covid. they made some mistakes and more than decisions they got right. But we all make mistakes under pressure (you should see my ever dwindling share portfolio, which I can only make rise in a falling market, sadly the market has been on the up for years).

Brexit too, many of the benefits are just plain ignored by the Remainers in favour of more and more ludicrous stories of empty super markets- the truth as ever is somewhere in between. But the lack of joining EFTA will bug me, as so much of the aggro now we need not have. 

However, the NI tax rise has broken me. Hosing more money on the NHS is insane. The health service is barely fit for purpose and health inflation accelerates away all extra spending. The money taken today won't likely ever really go into social care. 

Social care is a mess, throwing more state backed money at it is a bad idea. It is a mess partly because 90% of the sector is state backed, with all the price gouging, poor service and poor working conditions that usually entails. But Boris wants more of this. 

Boris has lost any kind of ideological compass. This is a Labour policy through and through, so Labour even Ed Milliband would not have tried it. If the Tories want to be Labour, fine, but then we may as well vote for the real thing and be done with it. 

Here it comes...

 https://www.reuters.com/world/asia-pacific/taiwan-reports-largest-incursion-yet-by-chinese-air-force-2021-06-15/

Made a prediction last week, turns out I was a bit on the cautious side, China look to be getting ready for this imminently whilst Old Man Joe gets sipping his horlix. 

Paying for care - tax rises incoming with bucket loads more statism

 Well to be honest the dinner was a pretty rubbish affair all round and now we face the bill.

The Covid bill, which is going to entail more and more to be spent on Healthcare as the Country ages and with worse health outcomes. Plus the nurses and doctors who deserve 15% pay rises, them too. 

Having seen the leaks from the Government that they are going to raise National Insurance, one of the most invidious taxes that hits both employees and employers, to pay for Social Care. 

Where is the capitalist and market answer from the Government? Surely the obvious solution is to create a subsidised insurance group, Government owned, that people could pay into and indeed have different level so potential care. This way if Tarquin is very worried about the family home, he could top up the insurance to make sure it did not get sold to pay for care. 

To me, why should the Government take this whopping amount of money to subsidise the middle class to keep their inheritance. It is another rubbish policy choice, rewarding the old (who don't pay NI anyway) and the middle class (who could afford the care). It is not great for high earners as they actually pay the NI and it will mean another drop income for them, when they already pay 37% of all taxes. 

What has happened to the British government over the last two decades, it has totally switched to always seeking more central power and tax raising. The Blair government's spited inheritance continues to affect us to this day. 

Can China avoid the Taiwan gambit?

 I am back, after sometime away in a country that makes the UK feel very cheap indeed. 

Watching the Afghan disaster from afar, as we all did, I could not help but see the Chinese rush in behind, like the fools they are, thinking that for them it will be different. As different, as it was for the Americans from the Russians, is the predictable outcome. The Chinese have invaded with money at least, rather than weapons, but it will soon be frittered on corruption, just like home for them.

However, as much as the US did need to back out of the Country, the cack-handed way it has been done has created a new post-Vietnam environment. For a good decade or more after Vietnam, the US was very isolationist and not very interested in policing the world. Reagan made do with an arms race against the Ruskies which he won at a canter, but involved no hot war at all. Only a little bit of hanky panky in Iran and Iraq was allowed, to keep the hawks busy.

Now Biden has really shaken the game, by ending it. The US is engaged nowhere in the world, certainly not Africa and won't be going into the Middle East anytime soon, save for some face-saving drone strikes against ISIS when it can find them. 

Meanwhile, in the economic world, the huge shortage of silicon chips continues to drag on the economy and push up prices everywhere. UK car sales have cratered, as there are a lack of vehicles to sell, just as the second hand market has taken off. Computer abusers have not had new gaming or mining chips for nearly 2 years - unheard of. 

Over 50% of the world's production sits in Taiwan. Just off the coast of China, a boat ride away. Taking this over would give a hug short-term boost to China, just taking the factories off line for a few weeks would wreak more havoc on the West to go with the Virus they gave us. 

President Xi must be very tempted by this play. The US has no appetite for hot wars and would be a huge risk trying to defend Taiwan. China, with good planning, could do a Crimea and present it as a fait accomplit, welcomed by a new puppet Government etc. 

China will do this one day, today is an opportune time as the adversary is weak and distracted and led by a senile and unpopular President. It could well be now. There are risks of course, the untested PLA could prove a disaster and the whole escapade resemble more the Bay of Pigs than Crimea, this will weigh in the thoughts of the Politburo who are very conservative, so we shall see in the near future how they fall. 

Inflation Edges Ahead. Or Not

We keep having this debate, don't we?  Raging inflation just around the corner - or merely a knee-jerk reaction based on misinterpreting various straws in the wind?

Well, today we learn that Eurozone CPI has hit 3%, a ten-year high.  Aluminium is way up, along with most of the supply chain for building stuff (notably, 'green' stuff).  Oil has come off its July peak, but natural gas is actually quite scary.

Then again ... we seem set to be importing a whole new wave of cheap labour.  The day that the Unions long for, when the Brexit / Covid labour shortage** really kicks in and transforms the relationship between capital and labour, never quite seems to arrive.

And people are repaying their mortgages.  And CU is away, so we can't even ask him.

Maybe we should have a compo:  UK CPI for December 2021, anybody?

ND

___________

** Earlier this month we did a short west-country tour, during which we patronised 7 establishments (hotels, restaurants).  Didn't hear a single non-Brit voice amongst any of the staff.  Wouldn't have been able to say that three years ago.

Wind Your Neck In, Tony Blair

Blast from the past ...

We're hearing too much from that man.  Originally penned with Iraq in mind, but the song remains the same.  The usual apologies to Edward Lear. 

They went to war in a Sieve, they did, 

In a Sieve they went to war: 

In spite of all Hans Blix could say, 

At Bush’s command on that fateful day 

In a Sieve they went to war! 

But when no weapons were found in the place 

And everyone cried, “You have no case” 

Said Tony Blair “we’re trusting to luck” 

We don’t care a button! we don’t give a f***! 

In a Sieve we’ll go to war!’

Far and few, far and few, 

Are the scruples of Tony Blair; 

His lies are bold and he’s shameless too, 

And they went to war in a Sieve. 

They went to war in a Sieve, they did 

And totally unprepared 

With not enough armour for soldiers to don 

With too few choppers – the list it goes on 

But Blair, he never cared. 

And every one said, who saw them go, 

“O won’t they be soon undone, you know! 

For the list of shortcomings is terribly long, 

And happen what may, it’s extremely wrong 

To send our boys unprepared!”

Far and few, far and few, Are the scruples of Tony Blair… 

The casualty figures soon started to rise, 

The coffins they soon came in; 

So to cover their arses they lied and lied 

(No sign of remorse for the many who died) 

And they gave the order to spin! 

And they hunkered down at Number 10 

And they lied and they spun and they lied again 

"Though the charges against us be ever so long 

Yet we’ll never admit we were rash or wrong. 

While we have breath, we spin!”

Far and few, far and few, Are the scruples of Tony Blair …

 

ND

"Unite the Union": made me laugh, anway

On the subject of what about the workers  ...  C@W readers are forgiven for not following every cut & thrust of trade union electoral matters: but Unite have been choosing a successor to 'Red' Len McCluskey.  The story so far: there were initially 4 candidates, 3 from the left plus Gerard Coyne, Starmer's man. This throws the left into disarray - Coyne will win if the other three can't settle their differences and choose a single candidate!  Well, to echoing cries of 'careerist', 'splitter', 'traitor' etc, they couldn't.  Everyone hates each other much more than they want anything constructive.

Eventually one did drop out, to back the strongman leftie Steve Turner; and the Left solemnly pile in behind him, telling #4 (one Sharon Graham) in the time-honoured fashion of macho lefties - sorry love, not this time. 

Then on Monday, lefties started posting - you know what, that Sharon might actually win ...

Haha!  And so she has.  (Presumably someone leaked something from the counting office.)  Now everyone from Starmer's office to the assorted lefties are rushing around saying this is a great result.  I believe this is technically known as "accommodate yourself to the new reality, comrade".

More popcorn!

ND

What About the Workers? - weekend reading

An interesting development in leftie thinking about the Labour Party is that it has moved on from the Corbynite framing "we are the 99%, against the 1%",  to a new formulation:  "we are the progressive, 'values-based' urban coalition and we rather hope we might muster 50.1%".

Who gets sidelined in this switcheroo?  Why, the white working class, that's who.  There's many an old-school workerist-marxist who doesn't like the sound of that, and here's a good essay along those lines.  Exerpt (my emphasis): 

... any political platform based on a shared set of “values” rather than a shared economic interest risks turning the actually existing working class into a problematic minority partner in a coalition of do-gooders.  We have already seen the dangers of this kind of liberal condescension, handing the Conservatives endless opportunities to ideologically consolidate their grip on previously Labour voting strongholds with a heady brew of right-wing culture war and strategically targeted public spending.

ND

Footnote[1]:  BTL, decnine & Elby mused on the new 'values' orientation.  On that theme, there's another good article here:

"Labour’s preoccupation with ‘values’ is a basic political error ..."

[2]  Rulings on the bot-naming compo appear at the foot of the previous post.

Weekend: Name That Tesla-Bot!

Elon Musk said he would probably launch a humanoid robot prototype next year, dubbed the “Tesla Bot”, which is designed to do “boring, repetitious and dangerous” work. The billionaire chief executive of the electric carmaker Tesla said the robot, which would be about 5ft 8in tall and weigh 125 pounds, would be able to handle tasks such as attaching bolts to cars with a spanner or picking up groceries at stores ...  Musk said the robot could have “profound implications for the economy” 

So: name that bot!

My proposal?  Why, Botty McBottface! 

ND

___________

Judge's rulings: 

1) Mr BQ wins the compo - perfect! 

2) Andrew (The robot does not exist. It is literally a powerpoint and nothing else) has the solid truth of the matter 

3) E-K is to fill us all in on his evidently excellent news

Nation-building: Blame The Germans

No apologies for returning to Afghanistan on a day like this.  Over the weekend I was chatting to a diplomat who offered the following suggestion.

After 9/11 the US was all for a crash-bang-wallop intervention in Afghanistan to nail OSB, nothing more.  This is indeed how it started: US + UK special forces, linking up with the Northern Warlords.  The shellshock induced in the whole world by 9/11 (Putin was giving a lot of help, and Pakistan could be leaned upon heavily) meant that a lightning campaign was eminently plausible.

Enter the Germans, with the enticing prospect that it could become a NATO mission ... but their price was the Liberal Meddler Overseas Agenda: schools for girls etc etc  Despite his own Defense establishment's opposition, somehow Bush Jnr swallowed this - and thus it became Policy.

So there's a thought.

There are plenty of liberals / progressives (and Paul Mason) wringing their hands over the thwarting of this agenda as I write, even as they despise the USA and (most of) its works.  Well, maybe in 2001 they all swallowed the End of History yarn, and thought America could impose anything on anyone.

ND

UPDATE: 

' “Saving women” was the reason so many of us backed the invasion'

Polly Toynbee, of course.

[1] it would probably have included Trans Rights today

[2] perhaps dreaming to go one better than his father's epic Coalition during Gulf War One (see this lengthy thread)

Weekend listening: 'Revenge of the Real'

This, I reckon, is worth 60 minutes of your listening-time.  The import of the pandemic for all our futures is indeed a very big issue, and all thoughtful contributions are welcome.  More interesting ideas in here than you'll encounter in the average hour of your life.

(Sorry it's from a leftie podcast, but there we go.  Nothing if not broad-minded here at C@W ...)

Actually, it's also interesting in a mild sort of way that it should be hosted by a leftie like Bastani.  Anytime the Real intrudes on wrong-headed thinking is helpful; but surely this'll have given him a few things to ponder quite close to home ...

ND

Afghanistan: why history is really important

 

When you're wounded and left on Afghanistan's plains

And the women come out to cut up what remains

Jest roll to your rifle and blow out your brains ...

 

When we last briefly looked at this, Don Cox BTL offered a link to a piece that suggested the Afghans would surprise us all in combatting the Taliban effectively  (Taliban on the Way to Kabul? Not so Fast…)  Hmmm.  Looks more like a re-run of Vietnam on fast-forward; quicker even than the major ISIS surge in Iraq before external parties intervened.

There's an excellent book, Afghantsy, on the Russian's decade of direct intervention in that benighted land 1979-89 by Rodric Braithwaite, a former UK ambassador to Moscow who (though not a military expert) seriously knows his stuff.   Even the Russians - a bordering nation, prepared to commit a large number of boots on the ground and be quite brutal themselves - couldn't achieve anything, as Braithwaite recounts.   Obviously, we couldn't either - in the 19th century or the 21st.

The book's early chapters cover two centuries of relevant history very well: history that anyone proposing to get involved should have acquainted themselves with before making any decisions at all.  The uncompromising facts about this brutal land and its endlessly turbulent, factional and belligerent people make one wonder if anyone thus historically equipped, Russian or in turn American, would ever have committed their infantry to the place.  Blair?  Just tagging along, as ever.  Which brings us back to the Americans ...

Biden's irresponsible closing contribution on this has been extraordinary - the TV clip being shown yesterday surely confirms him as utterly senile.  He seems capable of dropping any ball and the world once again depends desperately upon the 'checks and balances' of the American system - much under strain during the Trump regime, and to be sorely tested now, it seems.  With its more-or-less unilateral command of US foreign policy (where political 'lines of logistics' are shortest), I ask again: what other half-baked nonsense will the White House perpetrate?

ND

A*++ results day

It is that time of year where I do the appraisals of staff and colleagues, this year in the spirit of transparency and honesty, I thought it best to be public with my comments about Mr Drew.

"It has been a fantastic year for you, whilst the pandemic has meant we have not actually met or spoken, your output has been such that has rightly eclipsed both Plato and Aristotle as go to guides for wisdom in the modern age. With this in mind and recognising your needs to be rightly admired amongst your peer group of course to please your dear old mum too, I can say you have indeed earned fully the special A*++ rating, created in fact just for you."

* 360 review feedback welcome in the comments

* Appraisal grades are in no way linked to the pay round later in the year. 

* White males in receipt of any appraisal grades above fail will be marked down by a minimum 5 levels during the equalisation meetings in September. Sorry old fruit. 

Reality closing in on 'decarbonisation'

Returning from the annual Drew westwards foray - having gloriously reunited with C@W stalwarts from that neck of the (rather damp) woods - I find the wonderful story circulating of Wee Nicola being put on the spot by 'climate protesters' who'd like her support for their opposition to the Cambo oilfield development.

Her turn, then, to be skewered in the run-up to COP26.  Boris has of course already backed off fracking and that Cumbrian coalfield for reason of adverse green COPtics, but those English would-be developments have rather limited** strategic impact on the economy.  Rather different in the case of Cambo, because of course Wee Nicola wants the Scots to believe in oil revenues as the underpinning of their economy post IndyRef2.    To come out now as being opposed to all future oil & gas developments (and somewhat surprisingly, in Scottish waters there are plenty of those 'in the pipeline', so to say) is to slit her own throat.  They don't come much more strategic than that.

Haha!  The SNP spin-merchants will need to be pretty creative on this one, given that there's no end of troublesome leftie-greens lined up to needle her relentlessly.  What price a new SNP "green future" policy that will conjure 100,000 new jobs out of thin air, all faithfully promised to materialise starting, errr, 2024...

ND

___________

**Though not zero ...

Normality beckons - Tube Strikes ahoy

 Cancelled this week but threatened again for the August Bank Holiday, Tube Strikes are back!

I am not sure I can be sure the RMT are on a strong wicket here, the Government are going to have to fill  TfL with a £500 million shortfall again this year due to Covid. This means they have the Mayor over a barrel and many of the long sores that have been welling can be lanced. 

One of them is the pensions for TfL staff, the final salary scheme is very generous. Staff retire at 65 on nearly 50% full salary if they have been employed long-enough. The cost of this is eye-watering for the Government and no wonder, with the private sector having ended these schemes 20 years ago now, that the Government wants to manage this for new starters at least. 

It does not surprise me the RMT want to strike over this, it is the right thing to do to protect their members from their perspective. I just don't think they can win when the Government is already having to subsidise their wages directly to say they should also keep their superior pension benefits.

However this makes a strike quite likely, but having been up to London a bit of late, I doubt too many people will notice and all the buses are empty anyway!

100,000 cases a day and the end is nigh

The "Johnson" Variant indeed. 

By now, 2 weeks are opening up the Country, the group of assorted communists and losers who call themselves Isage (Iceage would be better, given the historic nature of their views) had managed to get Keir Starmer to say the Government were being reckless, that cases would soar and we would be in a new wave of terrible pandemic - and lo the Johnson variant was born. 

The thing that gets me is no one calls all this rubbish out enough. For the whole pandemic the downsides, which in reality have been bad enough, has been really skewed to the downside. 

As if life has not been bad enough, the Government, Labour Party and general media are always willing to give a voice to someone who fears the worst. As a kid I recall people walking around London with the signs above - they were not routinely given any credit and endless media interviews. 

The bug to me about this is it means the pandemic psychosis is going to on for a long time if the media insists on listening to every Cassandra going. The current one they are going to start on is vaccine escape of a new variant, something the drugs companies are happy about because they have easily tweakable vaccines to sell us - not because it means back to square one.

Oh for a summer silly season!

Dominic Cummings: The Silly Season

Sorry about the lack of posting: in my case, two deals to close before 31 July.  And hols soon!  

Anyhow, in the meantime one of our regular anons offered us this BTL yesterday, on the subject of Dom  - Dom Cummings, that is!

"Dom is a tragic case, very bright and driven guy, could have been a real asset to the UK, who gets shafted (like pretty much everyone who works long enough alongside Boris, he's not special), takes it personally and proceeds to make himself unemployable by not just spilling beans but pouring them on the floor and rolling round in them naked. Even I'd think twice about employing him. Real waste of talent. 'Great wits are sure to madness near allied, and thin partitions do their bounds divide' "

(We like the cultured stuff so thanks for that, anon.)

So: by way of a silly-season potboiler  -   would DC have survived at all in former ages, or suffered the fate of Savaranola?  Have his revelations already been priced into Boris' reputation?  Does he have anything more to offer, or is he beyond polite society's pale, a broken reed?   Discuss!

But do remember - the laws of libel apply online ...

ND

Only in the Guardian ...

 Only a Graun sub-editor could let fly with this ...

To win support!  The sheer wickedness of it!

ND

Government poorly served by the civil service

Apologies for the lack of posts from me this month, should improve a bit now. Real world work has been very busy which I guess is a good thing overall.

Watching the unfolding PR disaster of the Government this week has been quite something. I really am lost as to how nearly 18 months into the pandemic, the Government still can never seem to get ahead of its own agenda. 

Today they released the list of occupations where the self-isolation rules won't apply. How is it possible they had not planned for this a week or two ago? A lot of blame is going on Boris and the Tories for this, rightly so as the buck stops with them.

However, what the hell is the civil service up to? Why are the Ministers constantly in a flux of changing medical and governmental advice. It is one thing to accuse the Tories of lacking consistent messaging, which they surely do, but the lack of preparation and foresight sits firmly on the civil service. 

They are the ones enacting the policies of the Government and supposedly considering all the pitfalls and opportunities. Very little of this seems to be going on. As a taxpayer the value for money here is really poor. 

Dealing with a pandemic is a challenge, but the strategy has been right for a long time now after the initial few months of screw ups. It is the delivery which is so poor and the Government should ask questions of the competence of its senior advisors....maybe Dom was right....

Lambasting Liverpool

Dawn and I had a fair amount in common ... a shared South Welsh/Irish heritage via peri-urban council estates; swearing; and a deep love for Liverpool ... Whenever we met up in Liverpool, you could see Dawn revel in its doolally joie de vivre, its Irishness, its Catholicism, and the simple fact that it’s a place where being a socialist doesn’t make you a weirdo.

Maybe that recent endorsement goes some way towards explaining one or two other current news items concerning Liverpool ... 

Liverpool has been stripped of its coveted world heritage status after Unesco blamed years of development for an “irreversible loss” to the historic value of its Victorian docks. The UN’s heritage body concluded at a meeting in China on Wednesday that the “outstanding universal value” of Liverpool’s waterfront had been destroyed by new buildings. The decision is a humiliating blow for the city and gives Liverpool the ignominious distinction of being only the third place to lose the status in nearly 50 years. 

And this:

“Nothing less than a full reset of the Labour Party in Liverpool is needed.” [The report] recommends that Labour nationally takes over candidate selection processes in Liverpool until June 2026, and that it immediately fast-tracks outstanding complaints in the Liverpool City region, completing them within six months. The panel led by former government minister David Hanson says it received evidence identifying a “toxic culture” within the Labour group on the council and “dysfunctional governance running throughout the organisation”. Looking at local party meetings, the internal investigation was “told of a toxic atmosphere in some meetings, not welcoming to members, where often members especially women were targeted for bullying or abuse”. The panel was “presented with evidence of a history of antisemitism that already has led to expulsions and suspensions”

Scouse takeaway:  mmm...

Such a pleasant place!  (And we haven't yet wheeled in David Olusoga to tell us about the slave trade.)   Personally, I'm extremely partial to Beatles music which goes a long way to redeeming other shortcomings: but (strange factoid) Liverpool is, I think, the largest city in western Europe where I've never done any business.  I do have friends there, though.  And scouse is, errrr, a remarkable foodstuff ...

Yet I imagine there are C@W readers with more positive things to say about the place ... so do please let us know!  

"Did you tell me once Father Jack had a trial for Liverpool?"   "No, Dougal, he was on trial, in Liverpool ..."

ND

Getting Forensic on Starmer

Well, it's what he supposed to be famous for ...

So last week there was some self-serving Stamer-stuff shared with the Beeb, and our man had his line, and by heck he'd learned it well.

“I could see tonight what people wanted to know was: ‘That sounds good. It sounds like what I want to hear. But can you earn my trust over the next few months and years into the next general election in order to make me vote for you?’ And that is what I will do. I will sweat blood over those months and years to earn that respect.”

.... "trust must be earned. And what I heard tonight was that people weren’t saying, ‘I’ll never trust you.’ What I heard them say is ‘I’ve lost confidence in Labour, but I could, I could have confidence in the future, but it’s up to you to win it.’ And that’s what I’ll do, you know, sweating blood for the next few days, weeks, months, and years in the next general election."

Now whose fingerprints are all over that form of words?  I have a long memory for these things.  Way back in 1997 after the GE, Peter Mandelson craved respectability on the Left beyond the confines of his nasty little den on Millbank, and decided to stand for the Labour Party NEC.  He did the rounds of the studios in his unctuous way, saying (this is from memory**, but fairly verbatim for all that): 

"What I hear people in the Labour Party saying is: 'We know this chap has had a lot to do with the Election victory, we like that, but we think he should be more accountable, we think he should be on the NEC'."

Let's stick our necks out here and suggest that Mr M never heard a single person say that: he made it up.  (Certainly, he got somewhere close to nul points in the NEC election that year.)  I'm not alone in thinking suspicious things like this: the good lefty folks at Novara media have the same view on a 2021 Mandelson "citation", concerning something he was "told on the doorstep" -  while pounding the streets at the recent Hartlepool by-election, no less (yeah, right - mushy peas in hand, shoe-leather almost worn through, dusk falling) that goes as follows:

“One person said to me ‘Sort yourselves out, sort yourselves out. You picked the wrong brother and you ended up with Corbyn so that’s goodbye to you. When you’ve sorted yourselves out, we’ll look at you again’. That is what the Labour Party has got to do.”

Yup, pretty implausible again.  And I think we may forensically discern the modus operandi.  You come up with a fairly subtle, oblique line that serves your purpose (Trust is a wonderful motherhood-&-apple-pie thing: nobody can object to me wanting some of that.  I'm going to win back people's trust, starting with this: 'I'm so honest and humble that I admit the Labour Party - that is to say, the previous guy - blew it'.)  Next, you ventriloquise it into the mouth of Someone you conveniently met.  Then you report it as your having rightfully been given your marching orders: you've listened carefully, you humbly realise they're right: and by golly, that's what you're going to do!

In short: this is Mandelson-playbook format, with Mandelson known to be very much on the case right now; you, KS with your carefully learned and self-serving lines, are Peter Mandelson's stooge; and and I claim my Boy Scout Political Forensics badge.

ND

____________

** After drafting this I googled on the offchance of finding something corroborative from 1997.  And lo! - this, from the Graun ... 

"people have seen me at the centre of things, doing this, doing that, apparently calling the shots, giving the orders. 'But, accountable to whom?' they ask ... 'Who elected him? Who put him there?' They by and large see me as a force for good in the party and the Government, but they would like to see me be more accountable, and I think they're right". 

Oh, it's so perfectly crafted, you gotta love it!  "Who elected him? ... so I suppose, well, we'd better, errrr, elect him!"

What George Orwell Didn't Realise

All manner of ambitious people are in the market for good psychological insight.  Businessmen, con artists, priests, politicians ...

'Smith!' screamed the shrewish voice from the telescreen. '6079 Smith W.! Yes, you! Bend lower, please! You can do better than that. You're not trying. Lower, please! That's better, comrade. Now stand at ease, the whole squad, and watch me.'

It's long been obvious that no legislation is required to force a large section of society to keep their telescreens on at all times.  

And now we have Peleton:  being shouted at remotely for not keeping up with your communal exercises performed in front of the telescreen.

Orwell was a pretty good leftie psychologist, and reckoned people could be made to love Big Brother (and keep those screens on).  He hadn't perhaps realised that plenty of people love Big Brother without any compulsion whatsoever - and are willing to pay to have him beamed into their homes & watch their movements.  Ah, capitalism!  -  always ahead of the game.

ND

Bank of England - What inflation?

 So as we see record rises in inflation and to continue Nick Drew's theme some key elements are being ignored...

There is a much wider theme at work, there is a huge shortage of computer chips due to raw materials shortages. The big issue is the change in demand with cars now needing more chips as well as phones and most things electrical - the supply chain for the near doubling of demand is going to take a couple of years to fix. Plus China, as ever, interferes where it can with raw materials and supplies to Taiwan which is the home of much of the world's chip production (recent military manoeuvres too on the China side of the Taiwan strait are fund too....).

So used cars, used computers etc are all seeing huge bump in price, as are say new cars which are limited in number. 

Against this background, the Bank of England issue another £1.5 billion of quantitative easing this week to try to get the UK economy booming again.  Err....excuse me? Wage inflation is at over 5% this year, supply of goods is restricted. There are only two outcomes.

Stagflation - inflation but little economic growth or just plain old inflation with higher wages and prices in a spiral. 

The genie is out of the bottle, last time this happened, it was 20 years to get it back in. Plenty of time over the summer for us to reflect on how this will impact the Economy, markets and Government. 

Inflation (part 94)

Not for the first time this year, I can't help drawing attention to surging energy prices:  they are continuing strongly.  Wholesale gas in Europe has doubled (sic) in the past 4 months, with electricity, coal and carbon rocketing also.  I don't recall anything quite like this since oil went to $147 for a nanosecond in 2008.

The recovery programmes are starting to kick in.

Post-covid wages are obviously under huge upwards stress in many sectors.  Catering staff can't be found, as any trip to the pub / restaurant / hotel will readily confirm.

Where on earth is this heading?   Very uncomfortable for some - even the triple-locked pensioner might be queasy.  Sunak has balls if he seriously proposes to short-circuit that.

ND

Open Thread, Footie Special

 Ho, hum.  Even more politico-sociological potential than usual.  Have at it!

 ND 

 

PS: was it a particularly eye-catching streaker that the TV wouldn't show or talk about?  Or something political?  (Or both?)

If nobody actually knows, we can have a compo and guess ...

Afghanistan and an important political principle

A principle in public affairs offered here several times before is that lines of logistics in politics can be very short  (Drew's Fourth Law of Politics).  Deals of enormous importance can be struck in a trice and sometimes delivered almost as quickly: think the Tory-DUP pact after May's disastrous GE 2017.  This is especially true of foreign affairs.  Unlike many domestic spheres when delivery on a policy can take years, a treaty can be signed and often executed in a flash: think Treaty of Paris 1763, which re-drew the map of the world.

So when the Americans and *ahem* their allies slunk away from Afghanistan last week, what did anybody expect?  That people would sit back and watch the Taliban slowly roll up the map, like the North Vietnamese in 1975?  The Afghans are - of course - in discussions with a range of possible "new friends" and something quite radical is likely to happen in that geography very soon.  Stroke of a pen.  Overnight.  Only limitation is the imagination of those concerned.

The USA, though often more inclined to rely upon overall might than ingenious diplomacy, was nonetheless once quite adept at this stuff in its own way.  What a senile prat Biden is.  How much more of the world is he going to allow to be carved up over the dinner table - by other people?

ND

Friday Fun: All projection is reflection

 Absolutely the worst thing happening this week is the adoption of the England Football team by all and sundry. 

Heaven know we have needed a good news story for a while and here one is. But this weekend is going to see an ocean of pixels and newsprint devoted to "Why England's success means...." and what comes after will surely be whatever the pet subject is that the author normally bangs on about ad infinitum. 

Here are my ideas for what we might want to avoid reading:

"Why England's success shows a new emergence of left-wing patriotism"

"Why England's success shows the positive of conservative patriotism"

"Why England's success can only happen outside of the EU"

"Why England's success shows Boris is a bad leader"

"Why England's success shows Boris is a good leader" 

"Why England's success shows immigration is good"

I mean, all of the above I have either read or know I am going to be asked to read in the near future. It is a tedious part of the new click-bait media culture that see churnalists just use whatever the new bandwagon is to keep their own views going. No one I see is using it to change their established and set views on the world which seems to be the norm these days, unfortunately. 

So as a task for the readers over the weekend, I have some work for you. Below are some heroically bad takes, even worse than the above. Can your precis an article for them for 100 words in the comments, even better if some moron's write them and you can post links to them...

"Why England's success is a prelude to the green revolution"

"What England's success tells us about capitalism" 

"Why England's success is good/bad for LGBT issues"

Silly Season: Summer Reading

À propos of a note I made about capitalist innovation at the dawn of the industrial revolution, yesterday one of our esteemed BTL anons kindly recommended my well-known classic on this topic: 

"The history of donkeys in pre-Industrial Great Britain"      Author - Nick Drew. ISBN 978-0-7334-2609-4. Price: £9.99

Haha! Cheap at twice the price: I have a few signed copies left ... 

Suckers who bought this also liked: 

• "High Fashion on the High Street: how M&S single-handedly revived the British shopping experience" by Bill Quango
  
• "A Capitalist's Giude to Spelling" by CU 
• "Me and My Mask: cheerful floral designs for that essential, easy-to-wear accessory nobody should be without" by EK 
• "Where Is He Now?" by BE    (who? - ed) 
• "I Agree With Nick!" - the important new best-selller, by Timbo

What else are you taking to the Festival this summer, for those rainy afternoons?

 ND

Amazon scrapping stuff by the million: a free-market conundrum

Let's elevate our gaze from Batley & Spen, excellent result as this is (as Elby pointed out in the comments on yesterday's piece below), and before the footie starts up again.  Back to proper C@W stuff: and for those who missed it in all the excitement, an Amazon warehouse has been bubbled for sending hundreds of thousands of perfectly serviceable items for scrap every month - indeed, with a target of 130,000 items per week, no less!   The knee-jerk reaction to this is obvious enough and, being someone who abhors inefficiency & waste, I felt it myself.

But that's it, isn't it?  Knee-jerk.  What's the analysis? 

"Analysts suggested goods might be being destroyed in this way because it is cheaper to dispose of them than to continue storing the stock.  Similar investigations in France and Germany have found evidence of the practice in other Amazon warehouse."  (Well of course.  And anywhere else in the world, we may be sure.)

 Here's the analysis I'd want to see.  What if any is the role of the following factors?

• retail price maintenance? (i.e. not wanting to cannibalise prices by offloading at deep discount instead of scrapping).  If so, at whose behest - Amazon or the manufacturers / importers?
• contract terms imposed on suppliers by Amazon? (e.g. £xx per month warehouse charges if a single item is left unsold).  If so, do such charges bear any relationship to cost?  At whose cost of capital?
  
• industry practice elsewhere?  Maybe every bulk distributor/retailer is doing the same, but mostly flying under the radar because they are much smaller & less high-profile than Amazon
• are all laws & regulations on recycling / waste disposal / landfill charges etc being observed?
  
• are other relevant externalities being priced correctly?  (can't think of any at the moment, retail / logistics not being my specialist subject; but I bet there are some: over to Mr BQ ...)

I'm also willing to bet that, on a given set of 'reasonable' assumptions on each of the above, there could be a hard-nosed, wholly-logical economic rationale for the practice we've glimpsed here.  The hard fact - often deeply counter-intuitive to the layman - is that sometimes the marginal value of hard tangible commodities is zero, or even negative.  Happens in the energy business (my sphere) all the time, exemplified by (e.g.) wholesale electricity / gas / oil prices going negative (respectively: frequent / rare / only once ever).  Like the concept of a negative inventory in storage which, again, happens in my game all the time.**   By the lights of whatever calculation this would be, scrapping wouldn't be "inefficient" or "wasteful" at all.

But it's still intuitively abhorent, and if I were a policy maker, I'd be saying two things.

1. Show me small tweaks on the pricing of the externalities that gives a different economic outcome; and if that turns out to be easy, we'll regulate accordingly.  There are strong parallels with our perennial debate over what's the "optimum" degree of self-sufficiency: it depends upon your assumptions, of course.  PS, I'm particularly interested in things that have Amazon as their principle economic 'victim', because it's pretty damned obvious that right now Amazon is under-taxed by a big margin, i.e. effectively subsidsed already. 

Or else:

2.  We're going to ban it, period.  And before the free-marketers rise up and howl "traitor", well I'm a free-marketeer too; so let me give you precedents.  Many years ago, the largest UK North Sea oilfield (Forties / BP) had no gas gathering system.  Oil production almost always yields associated gas, generally captured and piped away as a perfectly valuable by-product, or used locally as fuel.  But in its permitting application BP made the case that in this particular instance, the field was so far offshore, and the amounts of gas relatively small, that no economic gas recovery was possible: pipeline would cost too much don'tya know, old boy.  But the nation wanted the oil production to go ahead - so the gas (which in absolute terms was actually rather a lot) 'had to be flared'.  And so it was, for many years.++

Well, BP's 'economics' were there to be audited alright.  We may be sure the numbers added up, down and sideways: spreadsheets are like that.  But one day the government had had enough, and told BP to sort itself out.  Lo and behold, BP had another look, and found a way.  Like so many things, you don't know what you can do until you must (see the Piper Alpha story we've recounted before: one of the most powerful economic lessons I know).

Waste on that scale is an abomination.  If the 'numbers' show it's the right thing to do, well the inputs are wrong and they need to be changed.  That can be arranged.

ND

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**These are the real-world phenomena which completely screw the minds of econometricists, those 'academic' astrologer-charlatans who leech off unconfident and gullible managements and governments.  I was once told that negative power prices couldn't exist because the mathematical representation that was used to model them couldn't accommodate a negative.  Pfft.  By the standards of the physics of the day, Watt's steam engine was also impossible.  A good job us practical types are allowed to just get on with things.  Oh, and by the way, there is a perfectly good way of modelling it - just need to work a bit harder, that's all.

++ The entire Russian oil industry used to work like this, BTW, flaring its associated gas: and the Russian gas industry flared its NGLs!  Could be seen from space at night.