Author: anomalyuk

Financial Regulation

I think its fair to say that the financial industry has not been admirable over the last few years. One of the best accounts of what went wrong is this:

Prince was saying he was constrained to follow the conventional wisdom, even when it was palpably insane.

It is therefore understandable that people are saying the manifest errors of the industry should have been restrained by regulators. Given that governments end up bailing out the casualties, it cannot be denied that government has the authority to attempt to prevent such bailouts becoming necessary.

The question is not whether the government is entitled to prevent excesses, it’s whether it would actually succeed in doing so. Is it really the case that politicians or civil servants will be less influenced by the crowd effect of conventional wisdom than are financial executives with, in some cases, millions of their own on their line?

One year ago, there was no motivation for regulators to get banks to cut down on lending, to stop buying mortgages, and so on, even if the powers existed for them to do that (which, to a degree, they do). If you are asking regulators to prevent bubbles, you are asking them to outguess the market, which, while not impossible, is not something I would generally expect them to achieve.

How to treat spin?

In March 2003, I wrote:

…much of the propoganda on WMD’s has been misleading or dishonest. Sure, Iraq is months away from making nuclear weapons (if someone else gives them fissionable material). The same goes for the Sons of Glendwyr — getting fissionable material is the only difficult bit.

The government had tried to make us think Iraq had a nuclear weapons programme by telling us, effectively, that it didn’t. That was much more revealing than an actual lie, even an obvious lie, because it proved that the government knew the facts and was spinning them in one direction.

Now some climate sceptics have been claiming that the world has not got any warmer for the last ten years. I actually didn’t think that was true: from what I saw there was a confusion between US and global temperatures. I have not repeated the claim here because I didn’t think it was true.

But the World Meteorological Organisation apparently published a statement that begins:

GENEVA, 4 April 2008 (WMO) – The long-term upward trend of global warming, mostly driven by greenhouse gas emissions, is continuing. Global temperatures in 2008 are expected to be above the long-term average. The decade from 1998 to 2007 has been the warmest on record, and the global average surface temperature has risen by 0.74C since the beginning of the 20th Century.

According to the Deltoid blog I got this from, they put out the statement “to correct the erroneous claims in the media that global warming had stopped”

The thing about the statement is that every factual claim is entirely consistent with the claim that global temperatures have not risen for ten years.

Since they unquestionably rose before 1998, they obviously remain above the long-term average, and likewise the last decade is the warmest on record. Temperatures have obviously risen over the last century. The rest of the WMO statement, (at least, the rest of what was quoted by Deltoid) also fails to contradict the proposition that temperatures have not risen since 1998.

Now, as facts go, it’s a minor one. It’s perfectly true that ten years is not long enough to draw any firm conclusions from. But like the 2003 Iraq claims, the fact of the spin is much more significant to me than what I can actually know for sure. I didn’t know what WMDs Iraq might have, but I knew for certain that the government was trying to make it seem like they had more than was actually the case. I don’t know how strong the evidence for AGW is, but I now know as an absolute certainty that the WMO is trying to make the evidence appear stronger than it is, in both cases not because the authorities are lying, but because they are spinning.

Olympic Shame

I do not feel that the Olympics are tainted by being held in China. In fact, I think China is tainted by holding the Olympics. I would think much better of the country if it refused to hold them, and better still if it refused to participate. I would support any boycott of the Olympics, ever, wherever they are held. In fact, I think I will start a campaign to have the 2012 Olympics moved to Yangon.

To me, all the complaints about 2008 are summed up in this priceless photo (h/t Distributed Republic)

Protester with sign: Would we have allowed Nazi Germany to host the Olympics?

No better demonstration could exist of the reality distortion field that surrounds this most objectionable of institutions.

Religiosity

My initial theme here was the difference between Europe and America. One of the most obvious is the importance of religion in America. Various explanations have been put forward for this difference, but mostly they do not account for the discrepancy.

I used to claim that everyone in England who seriously believed in God ran away to America to get away from the Tudors, but that doesn’t explain the rest of Europe.

I have heard it suggested that the welfare state in Europe has displaced religion, but that is too recent to account for a difference in religiosity that is much more longstanding.

I am inclined to a much simpler explanation: religions in America are more successful because they are privatised by the constitution. While the history of religion in Europe is one of religions fighting for state power with which to eliminate the competition, American churches have concentrated their efforts on appealing to the population.

If the US Constitution included an amendment that “Congress shall make no law respecting an establishment of education, or prohibiting the free exercise thereof”, then I believe the US would have the most successful schools in the world to go with the most successful churches in the world.

A New Era in Politics

Amid all the noise of the last few weeks, one minor story marks, for me, the beginning of the end of the old politics and the start of a new era.

The old politics is marked by belief in democracy. Voters complain about politicians incessantly, and, from time to time, vote against them. Unfortunately this entails voting for other politicians, and so has minimal effect.

In the new era, people see through the machinery of democracy and the abstraction of party, and hold politicians as individuals personally responsible for their misdeeds.

The sign of this new era, is, of course, the campaign to “bar” Alistair Darling from every pub in the country. Forget all the grand theories about Government, Politics, Budget; what has concretely happened is that Alistair Darling has forced various retailers of alcoholic beverages to pay more for their stock. Certain of those retailers have announced that they will decline to do business voluntarily with the man who did this.

It is my belief, alluded to previously, that we have far more influence over government in the course of our ordinary activity than we do as explicit participants in the political process. This is hardly a new idea; leftist revolutionaries have always known it, hence their emphasis on the Trade Union movement, or the mob.

This is only the beginning, though. It challenges one part of the great fallacy of politics: the part that says that the way to influence government is by participating in the political system. Imitating the publicans and ignoring the system is an advance, but they are still caught in the other part of the fallacy: the part that says that what matters are the decisions of a few famous people at the top of the hierarchy. In fact, the system of government (as opposed to the political system) has a position and a momentum of its own (as I discussed last month) and putting even direct pressure on the system’s figureheads will have limited effects. The principle which is being applied to Alistair Darling needs to be applied to every functionary of the state who turns up with a badge or a uniform and makes our lives less pleasant.

Now, maybe some of these people are actually helping us. The refuse collector who leaves behind a second bin cannot be deterred without the end result being that the first bin is left behind also. That is one of the great benefits of this approach, that it distinguishes between the concrete complaints about what the state does and the endless whining about what the state doesn’t do.

At present, the state employees most at risk of being threatened by the public are those who actively support the most state-dependent: the benefit officers, the social workers, the nurses in A&E on a Saturday night. If it becomes the norm that state workers can be prevented from doing their jobs by direct public opposition, both sides will benefit. The underclass will become more supportive of their servants or else will suffer the consequences, while the victims of the state — the people with fixed addresses and jobs and bank accounts and something to lose — will have some measure of protection from the persecution they currently face at the hands of “the system”.

Kafeel Ahmed, Idiot

At the time of the ludicrously inept propane-bomb attacks in London and Glasgow last summer, my biggest worry was that apparently those involved in the attacks were practising medicine. I would always hope to be treated by doctors with better knowledge of basic science than was demonstrated by those terrorists.

It is now emerging that one of the doctors, at least, was just the brother of the Glasgow suicide arsonist, who may or may not have been aware of the direction of his brother’s activities, but who is not accused of being active in planning them. That’s good news; there’s every chance that the defendant, Sabeel Ahmed, may be a competent doctor.

The idiot arsonist himself was no doctor, but, apparently, a “climate change expert”.

I would love to claim that climate alarmists generally are ignorant of chemistry and physics, but that is clearly not the case. I might with slightly more justification claim that there is a common tendency involved, which is to jump to worst-case conclusions. It is actually possible for a propane/air mixture to explode very destructively, it’s just very very unlikely without a very sophisticated process of using the right proportions and mixing very well. It is possible that the feedback effect of the climate system to CO2 forcing could be positive rather than negative, but that likewise is very unlikely. The alarmist case is based on climate models that appear to show that the feedback is indeed positive.

As an argument, that’s still a bit of a stretch; it’s worth thinking about it but I wouldn’t expect it to change anyone’s mind. The actual irony of this case is that Ahmed S. was pursuing an activity — climate alarmism — which has a serious chance of weakening or destabilising western civilisation. Even competent terrorism is less of a threat than climate alarmism. To give up green activism in favour of incompetent terrorism is, for an opponent of Western domination an own goal of Gary Sprake proportions.

Telephone and Bank privacy

Another point about all this: it’s raised to my attention something I was familiar with but which never really sank in before.

There was a huge fuss over warrantless wiretaps. The law in the US is to tap a US phone, the government needs a warrant. For a time there was a program of not doing it, and it was discovered by the press and caused a huge scandal. The recent arguments have been over whether the telephone company that illegally assisted in the tapping should be prosecuted or given immunity.

But investigators didn’t need a warrant to find out about Spitzer’s transfers to QAT. They didn’t need even to ask. His bank, like all banks in the US and the UK, was legally obliged to report anything suspicious to the authorities. Every employee has to be reminded every year of the sort of things they are supposed to be wary of, and reminded that they personally are criminally at fault if they have suspicions and fail to report them to the organisation’s appointed “Money Laundering Reporting Officer”.

It is as if AT&T, now being sued for wrongfully intercepting its customers’ conversations on behalf of the government, were in fact legally obliged to listen in to all its customers’ calls, evaluate them, and notify the authorities of anything suspicious.

But somehow that’s never received the public attention that phone-tapping gets.

The thing about privacy safeguards is that people don’t really care about them particularly on their merits. They have symbolic importance because they have been the subject of controversy in the past. That is why your right to the presumption of innocence vanishes as soon as you sit down in a car, and why your right to privacy disappears when you enter a bank branch. The authorities use the new powers to go around the safeguards, and then finally start to flout them when they are so used to working around them that they can’t believe anyone still takes them seriously any more.

An unusually honest politician

I’ve reconsidered on Spitzer. As I said, he’s done nothing that should be illegal. The motivation for criticism against him is that he prosecuted people for various victimless crimes, including prostitution, and is therefore a hypocrite. That turns on whether his role as a prosecutor should have been to follow the law, his conscience, or the will of the electorate – the old question of representative government. I no longer strive to strive towards such things, so the case for me is a question of corruption rather than hypocrisy.

But what’s the accusation here? This is a politician with considerable power, who it seems has been paying for sex with his own money. He didn’t put some bit of fluff on the payroll, funnel contracts to her, lean on some quango to put her down as a consultant, or pay her out of some slush fund extracted in the course of ordinary corruption. He went to an ATM and drew $4300 from his personal bank account. If that’s not indicative of an unusually honest politician, what the hell is?

There can’t be any doubt about it, since that’s how he got caught. If he had paid for sex with taxpayers’ money, like so many of his peers, he would probably have got away with it. That’s not a paradox: governments spend so much money, and get so little in return, that bonus services are easy to hide.

Spitzer

Yes, it’s funny that Spitzer was caught paying prostitutes.

But it’s funnier that he was grassed up by his bank for large unexplained transactions. That would have been an interesting one for the MLRO. (I wonder if Spitzer had the sense to bank with an institution he hadn’t hit for hundreds of millions of dollars?)

And, of course, the FBI followed up because it looked like some kind of evasion of campaign finance laws. What a tangle of nasty illiberal laws he got caught up in. You can’t even pass a few grand for an evening’s company in a hotel without involving a whole bunch of compliance officers and federal agents. All those laws should be repealed tomorrow.

Still, couldn’t have happened to a nicer guy. It’s the service providers (who are actually facing charges) who I have sympathy for. Hopefully they’ll end up with their own TV show or something. 2010 update – the TV show fell through, she had to settle for a newspaper column