As Mrs Thatcher told CUCA in 1976, “He must go — and go now.”
http://petitions.number10.gov.uk/please-go/
Please sign this petition. Could it go viral? Tell all your friends and it might.
As Mrs Thatcher told CUCA in 1976, “He must go — and go now.”
http://petitions.number10.gov.uk/please-go/
Please sign this petition. Could it go viral? Tell all your friends and it might.
By Ben Gadsby

There is a temptation, I think, amongst Conservative supporters and campaigners to think the game is won. We’re consistently over 10 points ahead in the polls (17 this morning), the Labour Government is dogged by scandal – how can the next election not be a Conservative victory?
But we cannot afford to be complacent. Below the headlines, the opinion polls repeatedly show that the position is not as strong as it seems. Just 21% of people trust Cameron to keep his promises. The top team is still prone to accusations of being toffs. The traditional Tories still seek tax cuts and a harsh line on crime. They are placated by the size of the lead. As it shrinks, and policies are announced, there will be murmurs.
We have a unique opportunity. People who used to shut their doors as soon as the word “Conservative” was used no longer recoil, they even engage. Time and time again, the people who propelled Blair to power and condemned us to the political wilderness are saying the same thing – I’ll never vote Labour again.
How do we capitalise on this? Hit the streets. It’s all perfectly well discussing the merits of Thatcherism and sipping on gin, but the election will be won on the streets, not in the Bateman Room. Whether you deliver leaflets, canvass, or tell, you can do something to bring us back to power.
It’s tempting to look at the opinion pools, and the papers, and conclude that the election is won. It’s not. This Wednesday’s budget is the election budget. The European elections are the final dress rehearsal. The general election is not won. The campaign is only just beginning. So get involved now – and help make history.
Caution and ambition are the two reins of her passion. So far, it must be said, she has led her party and handled herself with great skill and circumspection. Ministers who go around saying that she is “Labour’s secret weapon” underestimate her as party leader and as a vote-snatcher. She has shown restraint especially in refraining from committing herself to policies. Her tactical objective, now that the election can be glimpsed over the horizon, is to remain as uncommitted as possible while deflecting as best she can accusations of Carter-like “fuzziness” on the issues.
The Guardian, Wednesday 25th May 1977

When will the government stop transferring wealth from the the poor to the rich? The hundreds of billions for bailing out banks or “stimulating” the economy are far more significant than the millions claimed by MPs. Whether the money comes from taxation, borrowing (deferred taxation), or inflation (taxation by stealth), it is theft from the poor. The poor are the only people who face marginal tax rates of 70%, 80%, 90%, 100%, 110%. This must stop.
“The main assumption behind which the Enemy Class justifies its looting of the taxpayers is that any cuts in public spending must fall on the welfare budget. Of course, it is a false assumption…”
Creditcrunchy
A Cautionary Tale
~
Behold the Crunch of Credit!
That alliterative beast
Which skulks along Threadneedle Street
With violent caprice;
Which darkens every board room door,
And prowls about the trading floor,
Devouring Christmas bonuses;
Disturbing fiscal peace.
Beware the Crunch of Credit!
The debt that bites, the risks that catch!
Defaults of every size and sort
He’ll frumiously despatch!
Observe the Crunch of Credit
And his wicked weaponry.
The stocks have crashed, the LIBOR soars,
¡Negative equity!
Survey the Crunch of Credit:
How he slithers, how he writhes,
How he toppled with one subprime swipe
The fated Rock, the mighty Bear,
Brought low the Brothers Lehman,
Made the Scottish banks despair!
Perceive the Crunch of Credit,
And detect his subtle powers:
How he raised from rank obscurity
That mercurial Peston of ours.
Admire the bard’s concise adage
And prescience so stellar:
“The nature of bad news,” he wrote in truth,
“Infects the teller!”
And banks, in their lividity,
Sent copious liquidity
Careering through pecuniary pipelines.
Recapitalisation was on all the experts’ lips,
While the name of Keynes was whispered in the streets.
And so we took the plunge
And bailed them out, the bungling banks.
Each mortgage-backed security
We bought hold-to-maturity,
And now we must all hold on to our seats.
Eheu!
The Crunch of Credit
Hath another victim slain.
Just as we mourned the passing
Of the noble Woolworths chain
The news arrived of worse to come –
GM and Chrysler are undone!
Across that vast new continent
Exhausted cries of woe accrue;
Their answer is a distant, but distinct,
Bavarian “Juhu!”
And yet they have their problems too:
The market shrank, the Euro flew
As the glorious pound became less sound;
O what were we to do?
St Gordon took his sword in hand:
All boom and bust he’d soon disband.
Long time his manxome foe he sought –
So rested he by his brooding tree
And stood awhile in thought.
And as in dithering thought he stood,
The Credit Crunch, with eyes of flame,
Came whiffing through that tulgey wood,
And burbled as it came!
A spending spree, slashed V.A.T.
The fiscal blade went snicker-snack!
And though the sword was double-edged
It didn’t hold him back.
And at Westminster’s Palace
He arrived in prudent pomp,
And took to the despatch box
With a clunking-fisted thomp.
“Fear not,” said he (for mighty dread
Had seized their troubled minds);
“Glad tidings of great joy I bring
To you and all mankind.”
A silence grasped the chamber,
Every member was in thrall…
“For I have slain the Credit Crunch
And saved the world withal!”
And hast thou slain the Credit Crunch?
Come to my arms, my beamish boy!
O frabjous day! Callooh! Callay!
The Dow Jones shall be up today!
What forces dark could explicate
These grand felicitations?
A Faustian pact, no less,
Bought with our future generations.
It was now clear the Saint had been
Trained in the School of Madoff,
And all men of good sense agree
It’s time that he was laid off.
But Gordon is not all to blame;
Some people bear a greater shame.
The problem, if you care to see,
Was monetary policy.
Who spawned the Crunch of Credit?
That ‘twas bankers still persists.
All true, but don’t forget
The scholarly economists.
The money in supply, M4 –
as it’s known in the trade –
Approximately doubled over that
Debtors’ decade.
The learned persons thus assembled
Knew this and lamented;
And yet, instead of raising rates
Accordingly, relented.
And as night follows day
They had unwittingly consented
To preconditioning
This boom and bust unprecedented.
But how now learned friends?
What weaponry are you possessed of?
Alchemical de-squeezing
Such as “quantitative easing”?
The Crunch of Credit scoffs
And, Calibanically gleaming,
Jeers, “Who are these pretenders
With their gyring, gimbling scheming?”
And lo! so sudden from the sky
A voice was heard to prophesy,
“Hark, ye mimsy banks!
Hark ye, thou uffish Premier!
Hearken all who hear the call
Of downturns and despair!
The reckless beast cannot be maimed
With instruments of recklessness.
No victory can yet be claimed
While mired in such a fecklessness.”
And choirs celestial sang the strain
Which plumbed the very azure main:
The words of our absolving shrift,
The ancient liturgy of thrift:
“Sumptus censum ne superet!”
Repeat it, pray, lest we forget:
“Sumptus censum ne superet!”
The Hellenistic world agreed:
“????? ????” they decreed.
And in the plain vernacular,
Micawber took the lead.
Yet howsoever it may be said,
How loud, how slow, how clearly read,
Let each without exception
Brand its meaning on his head.
And then, just when
We can say Amen!
To being in the black,
We’ll go anew galumphing
To spend what we don’t lack.
~
(with grateful acknowledgements to Mr Lewis Carroll)
Did Thatcherism leave the nation divided?
http://uk.youtube.com/watch?v=cpdbEK3E4U8
The greatest divisions this nation has ever seen were the conflicts of trade unions… under the dictat of trade union bosses… They used their power against their members. They made them come out on strike when they didn’t want to… It was that which Thatcherism, if you call it that, tried to stop. Not by arrogance, but by giving power to the ordinary, decent, honourable trade union member who didn’t want to go on strike. By giving power to him, over the Scargills of this world…
That is one conflict. That is gone. Now another one.
I believe passionately that people have a right by their own efforts to benefit their own families. So we’ve taken down taxation. It doesn’t matter to me who you are or what your background is. If you want to use your own efforts to work harder, yes, I’m with you, all the way!
…
We’ve had an increase in home ownership, the heart of the family, under this government… Far more share ownership. Far more savings in building society accounts. This is what is building “One Nation”. As every earner becomes a shareholder. As more and more people own their homes. No, we are getting rid of the divisions. We are replacing conflict with cooperation. We are building One Nation through wider property and democracy.
Daniel Hannan is a Conservative Member of the European Parliament. He spoke to CUCA in Michaelmas 2008. With Douglas Carswell MP, he is author of “The Plan: 12 months to renew Britain.
One of the advantages of leaving the European People’s Party is that we will get more influence. Because he is not a member, Mr Hannan was the only Conservative to speak when Gordon Brown visited the European Parliament today. Here is what he said:
“Perhaps you would have more moral authority in this house if your actions matched your words. Perhaps you would have more legitimacy in the councils of the world if the United Kingdom were not going into this recession in the word condition of any G20 country.
The truth, Prime Minister, is that you have run out of our money. The country as a whole is now in negative equity. Every British child is born owing around £20,000. Servicing the interest on that debt is going to cost more than educating the child.”
Do watch the whole thing. If only we could have seen Gordon Brown’s face.
On Tuesday 17th March 2009, Professor Kevin Dowd gave the Libertarian Alliance’s 2nd Annual Chris Tame Memorial Lecture, “A Libertarian View of the Financial Collapse”, which I attended at the National Liberal Club in London.
http://video.google.com/videoplay?docid=2495820480786986515&hl=en
There is a transcription with notes and appendices at http://www.libertarian.co.uk/lapubs/econn/econn111.htm.
Despite its title, Professor Dowd’s lecture did not focus on the causes of the financial crisis. For that, I would recommend “The Financial Crisis: Causes and Possible Cures” by John Allison, CEO of BB&T, on 29th January 2009.
Professor Dowd did identify statist measures which contributed to the banking crisis: limited liability laws which encourage irresponsible risk taking; the deliberate destruction of the convertible pound which allowed inflation; state-mandated deposit insurance; and central banking. All this is the opposite of a free market, far from a laissez-faire system which some people claim it to be.
He criticised the reappearance of Keynesianism, which he described as “discredited and abandoned in 1976″. He criticised the government response so far, pointing out that credit is tight because confidence is lacking, not because interest rates are too high, and that printing money will erode confidence further. Erratic government action, such as further bailouts when previous ones didn’t work, also erodes confidence.
However, most of Professor Dowd’s lecture was on how to fix the banks. Our objective is “a safe, stable and efficient financial system”. “This can be achieved through a system of laissez-faire, or free banking.” Our objective is free banking on a sound commodity based currency.
We could apply laissez-faire immediately, in the middle of the crisis, and let market forces purge the rot out of the system. This sharp but short shock, says Professor Dowd, would be better than what governments actually did. However, it would be politically difficult.
More importantly, we can do better.
The Bank Recovery Programme
Professor Dowd proposes a “bank recovery programme”, involving no state guarantees and no bailouts, which would deal with the fundamental structural problems of the banking system.
The key question is: How do we deal with financially distressed firms?
Professor Dowd says that we should simply apply receivership law to banks just like any other firm. A firm’s liabilities should match its assets. If a firm’s liabilities are greater than its assets, it should go into receivership. The aim should be to restructure a bank’s balance-sheets so the firm is adequately capitalised, and hopefully return it to operation. Assets are written down, and creditors are paid off first. Shareholders get what is left, if anything. If creditors have to take a hit, then shareholders lose everything. If the firm is still potentially viable, it is recapitalised with new shareholders and returned to operation in a financially healthy state.
In the case of banks, there is share capital, and deposits (debt). The debt obligation is fixed in nominal terms. If a bank does not have enough assets to meet its debt obligations, the depositors make a loss, and the shareholders are wiped out.
This programme deals with people who claim banks are too big to fail. It allows us to fix the banks without them failing, yet without a bailout; without taxpayer involvement.
The programme treats banks just like any other firm. Some people claim that “banks are different”. Yes, but not in any relevant way. Existing bankruptcy law should cope just fine with banks. Indeed, before the present crisis, the authorities were saying just that: that we were operating in a “non-zero failure regime”.
There is one way in which we must treat banks differently from other types of firm. “Any receivership solution to a distressed firm needs to take into account the nature of the firm’s business”. If an electricity provider goes into receivership, you don’t want to switch off the the generators while the firm is sorted out. If a hospital goes into receivership, you don’t close it down while you sort the accounts out.
Banks are central to credit system for the rest of the economy. Banks are central to the payment system. So receivership must be implemented carefully.
The government has placed an obstacle to receivership: deposit guarantees. This reassures depositors (with a catastrophic long term cost). But it prevents receivership operating normally. It prevents depositors taking a hit.
So the government must rescind the deposit guarantee at the same time as implementing the receievership package.
They should do it over a weekend. On Friday evening, the government should inform banks that the deposit guarantee is immediately rescinded. Any bank that was confident could choose to weather the possibility of a run on its deposits. Other banks would go straight into receivership. The receivers would move in overnight, and work quickly to minimise disruptions to the wider economy.
Cash withdrawals would be limited for the duration of the operation. It is important to keep the banks’ assets in the banks while we devalue them. Assets would be written down quickly according to prepared write-down formulae for different asset classes. These wouldn’t need to be particularly accurate: indeed, it is best if write-downs are harsh, worst-case valuations to be on the safe side.
Now comes recapitalisation. Shareholders lose everything. The new capital comes from deposits: some deposits are converted into shares.
For example, imagine a bank with £80 of assets and £100 of deposits (debt) on its books. The shareholders are wiped out. The depositors lose £20. The receivers then judge how much share capital is needed, and convert a proportion of deposits into shares. The depositors become the new shareholders.
We could protect smaller depositors to make the plan politically easier.
On Monday the banks reopen.
Hopefully, the market would realise assets were worth more than they were valued at, and share values would rise. That’s the advantage of harsh write-downs. Depositors would make a loss on their deposits, but a capital gain on their new shares. The capital gain would increase as confidence returns.
Shareholders should take the hit. After all, what has the taxpayer got to do with it?
With a good capital base, the banks would be healthy again.
Here is a letter Professor Dowd wrote to the Telegraph on Sunday 25th January 2009:
SIR – The Government’s policy towards the financial crisis is clearly not working. Having “saved” the banking system with the big bail-out last October, it now turns out that the banking system needs another big bail-out three months later, and the plunges in the banks’ share prices last week suggest that this second bail-out is not working either.
The Government’s blundering is leading towards the piece-by-piece nationalisation of the banking system, with no thought-through solution to the underlying problems.
Any solution has to provide a framework within which banks can restructure their balance sheets and restore their financial health. Were these institutions anything but banks, the obvious answer would be for them to go into receivership. Their assets would be written down and creditors’ claims on those assets would be cut; they could then be recapitalised and returned to normal operations.
Yet, radical as it might appear, this same receivership-recovery model can also be applied to banks. It could be implemented via formal receivership, as existing law provides for, but could also form the basis of a government rescue package that would stop further losses being inflicted on taxpayers.
The key elements would involve: write-downs on assets; write-downs on banks’ debts (for example, swaps of deposits for equity, with exemptions for smaller depositors); and measures to minimise disruption to banks’ ongoing ability to provide both credit and payment services (including ensuring that the rescue took place over the weekend).
The combination of asset write-downs and fresh equity would restore confidence and put the banks on a sound footing again.
Prof Kevin Dowd
Centre for Risk and Insurance Studies, Nottingham University Business School
Johnathan Pearce also has a write-up with comments over at Samizdata.