More thoughts about transparency and corruption


Sounds good, doesn’t it?

Once again, I have cause to be proud of my homeland. New Zealand has finally overtaken Denmark to win the title of least corrupt country in the world, according to the organisation Transparency International.

Of course, I was keen to check out the full list of 180, and I have to tell you, I found some surprises. There was a certain predictability about the bottom placings: Iraq and Venezuela tied at 169, North Korea and Libya at 171, Yemen, Afghanistan and Syria ranking 175th, 177th and 178th respectively – which may be a true reflection of life in those countries, or a clear message that it doesn’t pay to rile up Uncle Sam. But I’m not here to debate that point.

Zimbabwe has risen to 157th=, after its armed forces staged a coup to overthrow dictator of 37 years, Robert Mugabe last year. Despite the country’s vast mineral wealth, including gold, diamonds and chromite, 80% of the population falls below the poverty line. Zimbabwe holds the world record for annual inflation, achieving the staggering rate of 89.7 sextillion percent in 2008 (I didn’t know there was such a number – but I learned that it’s 1 followed by 21 zeroes!), although the economic wizards in the military junta have reportedly reduced that to a relatively respectable 348%. So they must be pleased to find themselves climbing up the rankings.

Russia, on the other hand, won’t be proud of their placing at 135, especially since that puts them five spots behind Myanmar, currently making headlines around the world for ethnically cleansing their Muslim Rohingya citizens.

myanmar genocide

At least they’re open about it

“The U.N. special envoy on human rights in Myanmar said Thursday that the Myanmar military’s violent operations against Rohingya Muslims bear “the hallmarks of a genocide.” Nearly 700,000 Rohingya have fled their villages into Bangladesh since the Myanmar military’s crackdown following Aug. 25 attacks by Rohingya insurgents.” But I guess they’re being quite open about what they’re doing, so it doesn’t really count as corruption.

It’s not surprising, then, that the Maldive Islands, playground of the world’s glitterati, managed a ranking of 112, despite the ongoing state of emergency imposed by President Abdulla Yameen

“Yameen had cited threats to national security after the Supreme Court overturned criminal convictions against nine of his opponents and ordered their release.

He sent the army to storm the Supreme Court building and arrest the island nation’s chief justice and another judge on the top court’s bench. His estranged half-brother, former President Maumoon Abdul Gayoom, who has sided with the opposition, was also arrested. The three remaining judges on the Supreme Court then reversed part of their verdict on the release of Yameen’s opponents.”

At least Turkey managed to beat that lot – though President Erdoğan may feel his country deserves to be a little higher than 81st on the list; especially since China slotted in at 77, and South Africa at 71. Cape Town, as you may know, is currently getting unfavourable publicity, poised to become the first major world city to run out of water – although the crisis seems to be less of a problem for citizens with money.

Cuba was a surprise for me, coming in at 62, and Cyprus managed a commendable 42, my favourite number – though of course that’s “Greek” Cyprus, and needless to say, the Turkish enclave didn’t get a mention.

tax havens 2

And check their TI rankings!

By the time I’d got up to the 30s, my cynicism was starting to really kick in . . . so when I saw Costa Rica, tax-haven for the world’s mega-rich at No. 38, I wasn’t too surprised. Still, who’d have expected to see Botswana up there at 34, just behind Israel at 32, whose government has for years been ignoring UN requests to stop massacring Palestinians and invading their lands? Still, they’re pretty up-front about that too.

Which brought me to the 20s – and there was/were the United Arab Emirates, up with the elite of the world’s squeaky-clean at No 21!

“The UAE is the most densely migrant-populated country in the world. About 90 percent of the UAE’s 9 million people are foreign-born, most working on temporary employment contracts in a range of white-collar, blue-collar and service industry jobs. Only a handful of migrants have been granted citizenship since the country gained independence in 1971. Amnesty International and other humanitarian agencies have put a spotlight on the hardships migrant workers have faced, including exploitation of construction workers and unequal protection of women and domestic workers.”

Soooo . . . What do you make of all that? At the very least, you’d want to take a closer look at the criteria those “Transparency” people are using to make their assessments.

New Zealand was awarded No 1 spot, in spite of the following well-publicised facts:

  • * “Hundreds of drivers have had their licenses cancelled after a fraudulent licensing scam was uncovered; revealing [Ministry of Transport] staff had accepted bribes of up to $600 in exchange for a licence.”
  • A new plan has been put forward for the America’s Cup bases in Auckland by a company owned by some of the country’s richest businessmen who own 20 hectares of land at Wynyard Quarter and the Viaduct Harbour.” Some less wealthy citizens believe the plan will further develop Auckland’s downtown as an exclusive playground for the super-rich. I’ll be following that one with interest.
  • “Immigration NZ has completed an investigation [but not releasing their findings] into whether Kim Dotcom can be deported from New Zealand for failing to declare a dangerous driving conviction – but it’s refusing to say what the outcome is.

[Dotcom] entered the country on a special scheme intended to attract wealthy foreigners, giving three-years residency and a fast-track to citizenship to those who invested $10 million or more in New Zealand.

Documents obtained by the Herald through the Official Information Act showed NZSIS staff tried to block the residency application but dropped its objection after being told there was “political pressure” to let the tycoon into New Zealand.

At the time, the new residency scheme was having little success and – documents show – [Immigration Minister] Coleman was eager to get “high rollers” into the country.”

banks dotcom

ex-mayor Banks, Kim Dotcom and former PM John Key

Dotcom, as you may know, made wagonloads of money from various online businesses including his file-sharing website, Megaupload, arousing the ire of powerful figures in the United States. The US government then pressured their NZ counterparts to have him extradited, despite the fact that he is a citizen of Germany. Although known to have criminal convictions in Hong Kong and Germany, and to have served prison time in his own country, Dotcom was granted fast track residence in New Zealand in 2010. At the time of his application, he made several substantial “charitable” donations, one of which was a $50,000 contribution to the election campaign of former Auckland Mayor and Member of Parliament, John Banks.

Mr Banks faced criminal charges as a result, but claimed not to remember Dotcom’s financial assistance. Nevertheless, he was convicted in 2014 of filing a false electoral return. The conviction was subsequently overturned after Banks brought a witness from the USA to support his story (of amnesia?). However, it seems his righteous indignation went a little too far when he sought to get $190,000 legal costs awarded against Dotcom. In a recent Court of Appeal decision, the judge ruled that, although the original conviction had been reversed on a legal technicality, the court had stopped short of declaring Banks innocent – so no payment of costs was justifiable. Incidentally, after arriving in New Zealand, Dotcom had taken out a lease on one of the country’s most expensive houses, by coincidence no doubt, in the electorate of John Key, NZ’s Prime Minister at the time, and leader of the government which included John Banks.

  • The latest scandal rocking New Zealand’s ruling elite involves the venerable law firm, Russell McVeagh, among the country’s largest and most reputable. After some prevaricating, the partners have admitted that there had been shenanigans in the past involving some of their colleagues and young summer interns from the University of Auckland Law Faculty. There has been talk of interns selected for their physical attributes, required to sign confidentiality agreements, and engaging in sex acts on the boardroom table.

Complaints had apparently been laid by Auckland University on behalf of some of the students concerned, none of whom, however, want their names to be known for fear of retribution from their powerful assailants. Nothing corrupt about all that, of course. The interns were, after all, willing participants, I guess.

Nevertheless, it does make you wonder about Transparency International, and how they go about comparing and assessing levels of transparency and corruption in those 180 countries.

The TI organisation was apparently founded in Germany in 1993 by an interesting coterie of high-flyers including a former director of the World Bank, a lawyer for General Electric, a member of the US military intelligence establishment, and several high-ups in corporate banking and industry (Source: Wikipedia).

In spite of being clearly dependent on information from whistle-blowers, TI recently specifically refused support for Edward Snowden, one of the key informants for WikiLeaks. There has also been some discomfort expressed over how TI can maintain objectivity when it accepts large donations from large corporations (such as the $3 million paid over by Siemens Corp in 2008). The American chapter of Transparency International, TI-USA, was censured by its parent body after presenting Hilary Clinton with its Integrity Award in 2012. There has also apparently been some conflict with the TI people in New Zealand, though I haven’t been able to learn the exact details.

Well, ok, maybe the central powers at TI do seek to supervise the moral integrity of their branches abroad – but I read of another case involving a TI employee, Anna Buzzoni, having to leave the organisation after blowing the whistle on “questionable financial dealings” at TI’s Water Integrity Network.


Settled out of court in a case accusing them of deceiving investors and contributing to the 2008 world financial crisis

Who can you trust these days?

Certainly not the rankings provided by the world’s major credit rating agencies. The latest list published by Standard and Poors assesses New Zealand, with no manufacturing industry to speak of, and a tiny population, as AA,  a “High Grade” investment; and Turkey, with its booming economy and large manufacturing sector, as BB, “non-investment grade, speculative”. Still, maybe you’re better off not getting a good grade from those crooks:

In the spring of 2013, Moody’s and Standard & Poor’s settled two “long-running” lawsuits “seeking to hold them responsible for misleading investors about the safety of risky debt vehicles that they had rated”. The suits were filed in 2008 and had sought more than $700 million of damages. Settlement terms were not disclosed in both cases, and the lawsuits were dismissed “with prejudice”, meaning they cannot be brought again.

In the end, S&P settled for $1.5 billion – possibly feeling it was worth the money to avoid further negative publicity. Now it seems they are back dispensing credit ratings, and investors are happy to trust them again. Really?


Where did the money go?

There will always be prophets of doom, I guess, forecasting the end of the world. The care-taker at the school where I work insists that the Koran tells of a war-to-end-all -wars in the Middle East, followed by the final Day of Judgment. Who knows? Turkey and the United States look to be on a collision course right now. Who’ll blink first, I wonder? Or will they actually come to blows?

But getting back to the economy, that is no doubt the biggest danger. Wars are generally a side effect of the uber-rich seeking new ways of grasping more of the world’s wealth to themselves and ensuring that the rest of us are kept in our place.

Dropped wallet

Bill Gates lost $2.25 billion!

Last Monday the US Dow Jones Industrial Average dropped more than 1,500 points, and I read that the fortunes of the world’s 500 richest people, including Warren Buffett, Mark Zuckerberg and Jeff Bezos, fell by $114 billion.

“Berkshire Hathaway Inc. chairman Warren Buffett, the world’s third-richest person, was hardest hit, losing $5.1 billion, according to the Bloomberg Billionaires Index.

“Facebook Inc. Chief executive officer Mark Zuckerberg’s fortune tumbled by $3.6 billion, the second-biggest decline.

“Even Inc. chief executive officer Jeff Bezos, the world’s richest person, wasn’t immune to the carnage. His fortune slipped $3.3 billion to $116.4 billion. Alphabet Inc.’s Larry Page and Sergey Brin each took hits of about $2.3 billion.”


Sheldon Adelson lost $1.21 billion!

Time Magazine reported that nineteen people in the world managed to lose $1 billion or more each. See the list here.

Since, then, things seem to have settled down, and economist lackeys of the capitalist world are reassuring us that “what happened to the markets amounts to a correction rather than a crash.”

On the other hand, an aristocratic-sounding fellow writing in the UK’s Daily Telegraph, Ambrose Evans-Pritchard, says “The Fed and fellow central banks have stimulated a titanic expansion of debt over the last quarter century: an asymmetric policy of letting booms run their course while always intervening to prevent busts, culminating in the final throw of QE.

This has driven down the natural Wicksellian rate of interest and led to grievous intertemporal distortions. It has lifted the world debt ratio by 51 per cent of GDP to 327 per cent since the pre-Lehman peak, and led to a synchronised “everything bubble”, from bonds, equities, property, to art and Bitcoin.”

I confess I got lost with some of the jargon. The “natural Wicksellian rate of interest” and “intertemporal distortions” sound like things Douglas Adams might have invented, but Mr E-P does sound a little worried, doesn’t he! In fact, he began his analysis with the words, “Say your prayers”.

Well, I guess if you have $120 billion to start with, losing a paltry $3 billion is not going to worry you unduly. I’m wondering, however, if there weren’t a few people in the USA, outside the billionaire bracket, who took losses they couldn’t afford. I haven’t read anything about them, however, so I’m purely speculating.

But the real issue that concerns me here is not the small change of a few filthy rich planet-rapers, nor even ma and pa investor in homeland USA.

The question I want an answer to is: Where did that money go? It’s not as though young Mr Bezos left his wallet on the bus with $3.3 billion in it, and some lucky guy found it; or Warren B had an envelope stuffed with $5.1 billion in his back pocket, and someone snatched it. That I can understand. I lose money, you find it, lucky you.


Just have faith, people, and everything will be fine!

But this money, as far as I understand, actually disappeared into thin air. No one is any better off as a result. How can this be? What does that say about what money actually is if it can just vanish without trace? And that, of course, begs the question, where did it come from in the first place?

Until we all start to focus on demanding answers to these questions, or maybe seeing the answer that is under our nose, instead of allowing ourselves to be distracted by red herring minority interest social issues, our world is surely on the road to Armageddon – and those uber-wealthy zillionaires and their lapdog economist experts are running out of Band-Aid solutions.

Thoughts on rioting

We had a work party last Friday evening. It was a fairly restrained affair, as festive season work parties go. We were a mixture of ages – but as the evening progressed, oldies began to dominate the music selection.  At one stage, we found ourselves listening to “House of the Rising Sun “a big hit in 1964 for the British band, The Animals.

Well, would you believe it? It emerged that one of our number had gone to school with Eric Burdon! And that her gran and Alan Price’s gran had been friends, in Newcastle, way back when! For those too young to know, Burdon became synonymous with The Animals, but Price had been the original founder, later leaving to start another band, more conventionally, if less modestly, named The Alan Price Set.

My memory of the latter band was limited to a couple of strangely memorable tracks, “Simon Smith and the Amazing Dancing Bear”, and “The House that Jack Built”. Our Geordie friends, however, were insistent that, in their part of the world, Price is better known for his 1974 ballad, “The Jarrow Song” – so I had to check it out.alan-price-jarrow-song-warner-bros-3

It’s not great music, I’m sorry to say – but its cheery tune contrasts somewhat incongruously with its subject: an event that took place in October 1936 during the Great Depression, when two hundred men from Jarrow in the north-east of England, marched 500 km to London to draw attention to the plight of their families and fellow citizens in a town where unemployment had reached 70%.

Ellen Wilkinson, the local MP, later wrote that Jarrow at that time was:

“… utterly stagnant. There was no work. No one had a job except a few railwaymen, officials, the workers in the co-operative stores, and a few workmen who went out of the town… the plain fact [is] that if people have to live and bear and bring up their children in bad houses on too little food, their resistance to disease is lowered and they die before they should.’” (The Town that was Murdered, 1939)

The Jarrow marchers, in a gesture remarkably peaceful given the circumstances, presented a petition to the British Parliament – who more or less ignored it, possibly demonstrating that peaceful protests rarely achieve much in the way of meaningful change. Perhaps more surprisingly, the British Labour Party at the time refused to support the march for fear of being branded as Communist-sympathisers. Clearly, attempting to bring about change by working through the system has its limitations too.

BBC History writes that, “In Jarrow, a ship-breaking yard and engineering works were established in 1938 and the Consett Iron Company started a steelworks in 1939. However, in areas such as Jarrow the depression continued until World War Two, when industry prospered as a result of the country’s need for rearmament.”

Which exemplifies an important but often overlooked benefit of war in a capitalist economy.

Battle of Cable Street

London bobbies protecting pre-Fascist demonstrators, Cable Street, October, 1936

While doing a little background research on the Jarrow march, I came across a contemporaneous event: the Battle of Cable Street. Sir Oswald Mosley, a former Conservative MP in the British Parliament – later switching allegiance to the Labour Party – was an enthusiastic supporter of Benito Mussolini and Adolf Hitler, and apparently saw Fascism as the way forward for Britain. He founded and financially supported a para-military group, the Blackshirts, modelled on similar groups in Italy and Germany.

On October 4, 1936, he organised an event of his own, gathering 5,000 uniformed Blackshirts to march from the Tower of London to the poorer districts in the East End. Al-Jazeera writes that, On the day of the march, the response was the mobilisation of the immigrant communities of the East End, together with British trade unionists and leftists, to stand against Mosley with barricades, bottles, bricks and fists.”

They were met by “thousands of policemen, including many on horseback, swinging batons as they charged the crowds” since Mosley “had official permission to stage his demonstration.”

Daniel Tilles, a historian and specialist on British fascism in the 1930s, has written that “On the day itself, it was a great victory for the anti-fascists, who greatly outnumbered the Blackshirts and stopped them from marching through the East End of London.

“But Mosley’s deliberate aim had been to provoke counter-violence to what was a lawful demonstration. In a way, he got exactly what he wanted. It allowed him to portray what happened as immigrants, aliens, violent communists stopping British citizens from exercising their lawful right to demonstrate.

“In the months after Cable Street, British Jews suffered far greater violence, intimidation and abuse than they had beforehand, So Cable Street unleashed this wave of anti-Jewish violence and abuse and gave the fascists a boost in popularity.”

A well-tried technique of those in power: provoke a violent incident, then use it as a reason for forcefully suppressing groups expressing dissenting views.

Similar occurrences took place in New Zealand during the 1930s, although the Labour Government there, elected in 1935, still retained some remnants of a commitment to relieving the suffering of the poor and unemployed.

soup kitchen

A soup kitchen feeding unemployed men during the Great Depression in NZ

Predominantly a farming economy in those days, New Zealand was badly hit by the Great Depression, and its effects perhaps struck sooner than in industrialised countries. There were major riots in the main cities in 1932, the worst happening in April when a large crowd of unemployed relief workers joined Post and Telegraph Association members marching to a Town Hall meeting, swelling their numbers to around 15,000. Angry at being turned away from the overflowing hall, some demonstrators scuffled with the police barring the entrance. When a leader of the unemployed, Jim Edwards, rose to speak – apparently to urge calm – a policeman struck him down. The crowd erupted and surged down Queen St. Armed with fence palings and stones . . . they smashed hundreds of shop windows and looted jewellery, liquor, clothing and tobacco.“

Conventional reports of the incident tend to focus on the looting and window-smashing, while soft-pedalling on the poverty and misery caused by widespread unemployment; and implying that the felling of Jim Edwards may have been accidental. However, the presence of navy sailors and Territorial Army troops with rifles and bayonets, and a thousand mounted volunteer “special” constables” armed with clubs, suggest that the government was all-too-ready to meet protest with deterrent violence.

Several leading lights in New Zealand literature focused on the Depression and its attendant human suffering: among them, novelist John Mulgan, playwright Bruce Mason, and poets Denis Glover and ARD Fairburn. Glover’s poem, “The Magpies”, uses the call of the magpie to represent the heartlessness of an economic system that drives a hard-working couple to bankruptcy, insanity and death. Fairburn’s “Down on my Luck” pursues a similar theme of a man who loses job, woman and possessions as he struggles his way “to the end of his tether” and probably suicide.


Still going round in circles on the “tax, borrow and hope” road.

Unfortunately, attempts to perpetuate the memory of those days have been gradually forgotten, assisted on the road to oblivion by the capitalist propaganda machine that distorts and discredits their true significance.

Bruce Mason’s dramatic monologue, “The End of the Golden Weather”, was adapted to an award-winning film in 1991 – unfortunately omitting the act that described the Night of the Riots in Central Auckland. The financial strategy of CH Douglas, expounding a middle road between communism and capitalism, was undermined by JM Keynes’s legitimisation of deficit budgeting, and the financial “stimulus” of the Second World War.

As Alan Price sang, back in 1974:

“Well I can hear them an’ I can feel them
An’ it’s as just as if they were here today
I can see them, I can feel them
An’ I’m thinking nothing’s changed much today.”


What is money, and where does it come from?

One thing I can tell you for sure – it doesn’t grow on trees! But that doesn’t really answer the question. An article in the New Zealand Herald today caught my eye:

Show me the money: Reserve Bank reveals the ins and outs of printing cash

There is about five and a half billion New Zealand dollars circulating at the moment – in the country and offshore – and hundreds of thousands of notes being destroyed every week.

In 2016, the Reserve Bank destroyed 43 million notes, with a value around $1 billion.

The money is “granulated” down into “very small sort of confetti-sized bits of bank notes” then sent away to a specialised company that recycles them into plastic items one might find at home.

All this money being transformed into plastic on a weekly basis must be replaced.

print money

Thank God for Canada!

New Zealand money is printed much less frequently than it is destroyed, and it’s done overseas.

The notes are printed in Canada because it is not financially viable to run a printing factory in New Zealand. With money only ordered once a year at most, such a factory would lie unused much of the time.

Despite the increased use of Eftpos cards and online banking, the amount of New Zealand cash circulating here and overseas is growing, something that “around the currency world gets discussed a fair bit”.

There are a few “industry theories” on why the around $5.5b in cash is growing. One is that low interest rates means it doesn’t “hurt as much” to hold on to cash.

“You’re not losing interest revenue by holding it to any extent.”

Other reasons could include that New Zealand money was popular overseas, people using cash to avoid taxation, and using cash in the “dark economy” for illegal dealings.

But another thought was simply that increased spending led to increased needs for cash.

One way or another, the Reserve Bank has so far always had enough to circulate, and didn’t have “masses of unused notes sitting around”.


Well, I don’t know about you, but for me, this article raised more questions than it answered.


Everyone needs something to believe in

First of all, millions of dollars in “legal tender” are created and destroyed every year – so clearly those paper notes have no intrinsic value. In fact, they’re not worth the paper (or plastic) they’re printed on.

Second, NZ money is printed in Canada – and if that money factory is working all year round, I guess those Canadians must be printing money for a few other countries as well, yeah?

“New Zealand money is printed much less frequently than it is destroyed, [but despite this, and] “Despite the increased use of Eftpos cards and online banking, the amount of New Zealand cash circulating here and overseas is growing.” How so? Was there more cash in the past? And are people hoarding old banknotes? But the government keeps issuing new designs and the old ones become obsolete, so that can’t be true.

The Reserve Bank doesn’t have masses of unused notes sitting around but always has enough to circulate even at Christmas time when demand increases, and the “around $5.5b in cash is growing” all the time.

Smells fishy to me! Obviously, there’s something they’re not telling us. And it could be this:

It’s been estimated that notes and coins in all the world’s currencies represents about 8% of the total world money supply. What? Yes!

If you think you know what money is, and you’re happy now that you know it comes from Canada, I’ve got bad news for you. Even the best economist brains in the world can’t agree on what money is. But one thing I’m sure they will agree on – It doesn’t come from a printing factory in Canada.

What they’ll tell you, if you insist on a definition, is that there is a mysterious algebraic thing they call “M”. There used to be three of these things, M1, M2 and M3 – but now it seems another has been added: M0. Well, actually I think that was a con, because M0 is notes and coins, and all those other “M”s have actually been moved further up into the realms of virtual reality – bank overdrafts, credit card limits, futures, toxic mortgages, quantitative easings, and other stuff we mortals earning normal wages or salaries have no concept of.


Borrow money from your friendly local banker 🙂

Let me give a simple example. Just before a big commercial shopping event like Christmas, my bank texts me to say there is $20,000 waiting for me. All I have to do is send a text reply to a four-digit number, that $20,000 will magically appear in my account, and I can get on with the business of spreading good cheer to relatives and friends.

I never ask for it – but I can’t help wondering: Is that $20,000 sitting at the bank in a bag waiting for me, or do they give it someone else? What if I change my mind later and ask for it? Do they say, “Sorry, buddy, we gave it to Joe Bloggs”?

And I also wonder, how many other people around the world got the same offer from their banks? A thousand? Ten thousand? A million? What if we all take up the offer? What if we all don’t? Will they print more? Or shred the unclaimed millions?

Then there’s the small matter of debt. The United States of America is proud possessor of the world’s largest economy. It also happens that they are the world’s largest debtor nation. According to Wikipedia, on November 7, 2016, US total gross national debt stood at $19.8 trillion (about 106% of the previous 12 months GDP). I checked the US online debt clock at 10.23 last night, and found that their figure is nearly $70 trillion. Clearly it depends who’s measuring, and how they measure it. Whichever figure you decide to run with, it’s a sizable heap of money!

Well, the next question that arises is, who do they owe it to? I asked a mate at work who seems to know a lot about politics, economics and world affairs. “China,” he asserted confidently, “and Japan.” So, I checked them out.

Turns out that China’s “national debt” as of March 2016 (the most recent figure I could find) stood at the equivalent of $4.3 trillion. The same source informed me that Japanese “public debt” in 2013 passed the quadrillion yen barrier in 2013 (about $10.5 trillion at that time).


Looks like a tricky situation – and he’s not alone.

Government debt in the UK (ie not counting private and commercial borrowings) amounted to £1.56 trillion, or 81.58% of total GDP, and the annual cost of servicing (paying the interest on) this debt amounted to around £43 billion. The Conservative government pledged in 2010 that they would eliminate the deficit by the 2015/16 financial year. However, “the target of a return to surplus at any particular time was finally abandoned by the then Chancellor of the Exchequer George Osborne in July 2016”. And sad to say, until they start running a surplus, that debt’s only going to get bigger.

Evidently none of the world’s biggest national economies is in any position to lend money to their insolvent neighbours. Fortunately, we have banks that can come to the rescue. Fractional-reserve banking is the current form of banking practised in most countries worldwide. In a nutshell, this system allows banks to lend up to 90% of the money they have in deposits.

The beauty of the system, from the banks’ point-of-view, is that they don’t have to apologise to you when you go to make a withdrawal: “Oh, sorry, we loaned your money to John Doe.” You can have yours, and he can keep his – and the bank can collect interest on the new money it created.


Happy bankers 🙂

But what if we all go and demand our deposits at the same time? Luckily every country has an LOLR – which apparently stands for “Lender of Last Resort”, not “Laughing Out Loud, Really”). This is normally the country’s central bank eg the US “Fed”, or the Bank of England, which guarantee to bail out the too-big-to-fail banks when they get caught out, as in 2008.

And since we are assured that those central banks don’t have large stocks of money in their cellars, and tax-payer dollars are already insufficient to balance their government’s books, I guess that means they have to borrow more money from the private banks.

Either that or go cap-in-hand to the money printing factory in Canada. Think about it.

If you don’t think there’s a conspiracy, you’re not paying attention

An interesting article I came across in Time Magazine: “Why Smart People Still Believe Conspiracy Theories”

wall street conspiracyA coterie of academic stooges set out to prove that people who believe in “conspiracy theories” are of sub-normal intelligence. Unfortunately for them, their findings did not confirm their initial hypothesis – so they had to come up with another one, ie people believe what they want to believe. Which is probably equally true of people who insist that there is no conspiracy.

The researchers’ fundamental error was to assume that people who believe there is a conspiracy have no solid evidence to support their belief. Not true, guys and girls.

  • Take a look at the Roman Catholic Church. One huge international conspiracy to keep the poor in slavery.
  • Take a look at Wall Street and the world of international banking and finance. Another monumental conspiracy to hide the truth behind global economic imperialism.
  • Take a look at the United States political system. Another major conspiracy aimed at convincing poor Americans that they actually have a say in how their government rules the country.

trumps-favorite-mcdonalds-meal-is-a-catholic-conspiracyA few extracts from the Time article:

“Millions of Americans believe in conspiracy theories — including plenty of people who you might expect would be smart enough to know better.

Despite mountains of scientific evidence to the contrary, at least 20% of Americans still believe in a link between vaccines and autism, and at least 37% think global warming is a hoax*, according to a 2015 analysis. Even more of us accept the existence of the paranormal: 42% believe in ghosts and 41% in extrasensory perception. And those numbers are stable. A 2014 study by conspiracy experts Joseph Uscinski of the University of Miami and Joseph Parent of Note Dame University surveyed 100,000 letters sent to the New York Times and the Chicago Tribune from 1890 to 2010 and found that the percentage that argued for one conspiracy theory or another had barely budged over time.

Now, a study published online in the journal Personality and Individual Differences provides new insights into why so many of us believe in things that just aren’t true: In some cases, we simply want to believe.

The second study was similar but also sought to correlate belief in conspiracy theories and the paranormal with overall cognitive ability. To determine this, the people answered a number of questions that measured their numeracy — or basic mathematical skills — and their language abilities.

us democracyWhat’s most troubling — and a little mystifying — is the fact is that so many people in the studies score high on all of the rational and intellectual metrics and yet nonetheless subscribe to disproven theories. That’s the case in the real world too, where highly educated people traffic in conspiratorial nonsense that you’d think they’d reject. In these cases, the study concluded, the reason may simply be that they’re invested—emotionally, ideologically—in believing the conspiracies, and they use their considerable cognitive skills to persuade themselves that what’s untrue is actually true. If you want to believe vaccines are dangerous or that the political party to which you don’t belong is plotting the ruination of America, you’ll build yourself a credible case.”


*Interestingly US presidents and CEOs of large corporations seem to subscribe to this one!

Getting back to Istanbul – and the world of Realpolitik

I’m happy to be back in Istanbul after spending most of the summer at our seaside retreat. We were rocked by a moderately disturbing earthquake in Bodrum – but it seems the big city suffered worse damage from torrential rain and a storm of super-sized hailstones. Gentle reminders from Mother Nature about who’s actually in charge on this planet. Anyway, I have to start work again, a necessary evil in order to sustain a lifestyle above subsistence level.

My good lady is still out of town, so, looking for ways to amuse myself in her absence, I headed over to the European side of the city. I was keen to see Taksim Square, Gezi Park and İstiklal Avenue, having heard so much negative comment about their descent into a black hole of fundamentalist Islamic horror.

democracy park

Not easy to get into. Could that be significant?

My first target was Küçükçiftlik Park, which I had seen advertised as venue of the 4th Istanbul Coffee Festival. I passed through tight security before emerging at a ticket booth totally lacking in any kind of queue. On asking the entry price I understood why . . . 35 Turkish Liras! What? Unable to believe what the young lady had said, I asked, “What’s in there? Is it worth it?” I took her momentary hesitation to mean that she herself had doubts, so I headed for the exit. 35 Liras! Last year it had been held in the grounds of Topkapı Palace, and admission was free. So what had changed over twelve months?

While in the vicinity I decided to check out Maçka Democracy Park, a good-sized island of greenery (yes, another one) in the inner city I hadn’t visited in a dog’s age. It was named in happier times when regular military coups ensured the preservation of democracy and secularism, at least for the nation’s ruling elite. It turned out that visiting the park was easier said than done. Clearly much of the lower end has been leased out to whatever private concern is now scalping citizens for entry to the Coffee Festival, and I had to walk a kilometre or so up the hill to find a gate.

Maçka Park has been in the news recently over an event where a couple of scantily clad young women were harangued by a guy who found their short shorts unseemly – giving rise to a series of protest meetings where sisters gathered (in shorts) to assert their rights to expose however much female flesh they thought necessary or desirable. Me? I keep out of such issues. I just try not to ogle too blatantly when vistas of naked leg and cleavage appear before me 😉

Maçka cable car

Maçka park cable car

I was pleased to find that the cable car I remembered from years gone by still crossed the valley from Şişli to Taksim – and more pleased yet to find that the spectacular view over woodland to the Bosporus was less disfigured these days by youthful inscriptions etched into the perspex windows of the carriage.

A short walk brought me to Taksim Square, still a rather barren space despite council claims that they had planted a large number of trees. Gezi Park, location of much political excitement four years ago, is actually a rather more accessible and pleasant spot than in former times. The whole area has been closed to motor traffic which has been diverted underground. An exhibition area hosts thematic displays of handcrafts and the wares of micro-businesses. On this particular day, dozens of stalls were purveying second-hand books, classic movie posters and prints of old Istanbul, and several outdoor cafes offered Turkish coffee brewed slowly, in the traditional way, on glowing charcoal.

Feeling a little hungry, I headed down a back street and found a tasteful little restaurant calling itself “Gezzy” where I enjoyed a most delicious pide, a kind of Turkish pizza with cheddar cheese, tomatoes and green peppers.

From there, I carried on down the road known as Tarlabaşı Boulevard. On the downhill slopes to my right spread the colourful neighbourhood featured in numerous Turkish films about the underground life of gypsy music, prostitution in all its multitudinous guises, and the world of crime in general. I remember, years ago, on first seeing the narrow lanes of rundown Victorian tenements (or whatever the Ottoman equivalent was), wondering when the mixed blessing of gentrification would arrive in an area so close to the beating heart of the metropolis. Well, arrive it has – amid much fanfare, accompanied by somewhat justified wailing and gnashing of teeth.


A green space in central Istanbul – but just try to get in!

I cut back up the hill towards Beyoğlu, passing by the fortress-like walls of the British Consulate. Built in 1845 as an embassy, in ostentatious imperial neo-classical style, adorned with the requisite inscription in Latin and the date in Roman numerals, the enormous edifice provides little in the way of services, to locals or UK citizens. A bombing fourteen years ago that killed a number of Turkish citizens, and accidentally got the Consul-General, led to the building of a defensive wall. Once an important outpost of empire in the Ottoman capital, Pera House these days looks like little more than an expensive anachronism.

The back streets running more or less parallel to İstiklal Avenue, the commercial thoroughfare leading out of Taksim Square, are lined with imposing buildings of similar vintage in various states of decrepitude and restoration: The Pera Palace Hotel, famed for its role in accommodating wealthy travellers disembarked from the Orient Express; the Grand Hotel de Londres, a reminder that French was a more fashionable language than English in those days; the Italianate façade of the Beyoğlu Council building, erected in 1857. These and more recall that for centuries, in Ottoman times, and before, when the city was capital of the Eastern Roman Empire, citizens lived in the ancient city across the Golden Horn. The district known variously as Pera, Galata or Beyoğlu was a satellite town of foreign traders and diplomats.

Most visitors to modern Istanbul take time to visit Galata Tower, built by the Genoese in 1348, and providing panoramic views of the city from its 63-metre viewing deck. In those days, the Genoese and their Venetian neighbours controlled trade in the Mediterranean, and it was their contact with Eastern civilisations that contributed to the Renaissance in Europe. Subsequently their control was challenged and more or less replaced by Ottoman power – which may have been a major motivation for Western Europe to get its political act together in the interests of defence.

old tower

Lesser known tower of Galata – with the Church of Peter and Paul lurking behind

I had thought Galata Tower was the only remnant of the walls that formerly enclosed the enclave of Galata, but as I walked down the hill towards the Golden Horn I came across another tower and section of ancient fortification in a sorry state of decay. Turkey is often accused of failing to protect its rich architectural heritage, but when you get out and wander around the city, or the country as a whole, you may be overwhelmed by the sheer volume of ancient churches, castles, mosques, temples, bathhouses, theatres, stadiums, city walls . . . Every day, it seems, some farmer ploughing his field turns up the mosaic floor of an opulent Roman villa. This is world heritage – but mostly Turkey is expected to foot the bill for protection and/or restoration. Just as the Middle East refugee tragedy is a global problem – but largely locals are left to house and feed the displaced homeless.

Behind the decrepit tower I caught a glimpse of a bell tower clearly belonging to a Christian church. I wandered round the block trying to get closer, but it was well protected by the walls of a decaying 18th century inn, and a locked gate. Nevertheless, I did identify it as an Italian Catholic church dedicated to the apostles Peter and Paul, erected in 1843 to replace a more ancient edifice that had been converted to a mosque in 1475 after the Ottoman conquest of Constantinople.

In the 19th century, the district of Karaköy, at the foot of the hill below Pera, became a major commercial district where banks and other businesses established their headquarters. I’d heard about Salt, Istanbul, and took a quick look in as I passed by. It’s a kind of research library, museum and exhibition centre housed in what was once the HQ of the Ottoman Bank, established in 1863, according to the BNP Paribas website, “by the Turkish government in partnership with French and British financiers” with the aim of “restoring Turkey’s finances to health and helping to modernise the Ottoman Empire”. Yeah, right! Wonder if the Rothschild family were involved in any way. On the wall inside is another inscription in imperial Latin:Extra fortunam est, quidquid donatur amicis; Quas dederis, selas semper habebis opes.”

Just fishing

Maybe he’s got the best idea. “Leave the wise to wrangle . . .”

My Latin’s a bit rusty these days, but the Internet came up with this translation:

“Who gives to friends so much from Fate secures,
That is the only wealth for ever yours.”

So were those French and British financiers claiming to be friends of the Ottomans? Well, that friendship didn’t turn out so well for the locals in the end, did it! Empires come and go, but leopards don’t change their spots.

End of Labour as a major political force?

The Light Dawns – The Penny Drops!


It came to me in the bathtub!

It was a favourite saying of my old middle school teacher, Mr Hislop. It was a mildly sarcastic form of congratulations when one, or all of his pupils finally showed signs of understanding something he had been at pains for some time to explain.

The words came to my own lips as I read an opinion piece in New Zealand’s own Herald newspaper/website. The writer was commenting on the woes of the NZ Labour Party in the lead-up to this year’s General Election. The conservative National Party has been in power since 2008. The Prime Minister for most of those years was an unabashedly rich finance mogul whose standard response to news media questions about the numerous scandals that broke during his term of office was, “Oh, nobody cares about that!” New Zealand has a ludicrously inflated housing market, a playground for wealthy local and foreign “investors”. The country has received dishonourable mention in global reports on child poverty and international money laundering.

In spite of that, and more, the main opposition Labour Party is plunging rather than rising in public opinion polls, and the party’s panicked response has been to choose a new leader, four months out from Election Day. It’s the beginning of the end of Labour as an automatic major political force,” says this political commentator.

Interesting choice of words, don’t you think? automatic major political force”? Unfortunately, that’s what it is, and has been for the last 40 years – and not just in New Zealand A brain-dead response by people unhappy with the social injustice created by traditional conservative economics. Political pundits in the UK are desperately trying to convince voters that the local Labour Party has found, in Jeremy Corbyn, a leader to take them back to their roots. The US Democrats managed to sell Barack Obama to their well-heeled, trendy-lefty supporters, and nearly did it again with Bernie Sanders. The sad fact is that Labour Parties (and their alter egos) in these countries and Australia, and others for all I know, are just a construct of the established financial elite who wield the real power while conning a pathetically gullible electorate into thinking they have a choice at the ballot box.

walking dead

Labour back from the dead – again?

Let me quote you some facts and figures. New Zealand voters elected their first Labour Government in 1935, in the depths of the Great Global Economic Depression. That government did actually manage to implement some genuine socialist reforms, on which their successors have been dining out ever since. By 1949, however, they had turned their back on most of their founding principles, got rid of any dissenting voices in their own ranks, and were deservedly thrown out in that year’s general Election.

68 years have passed since then. Conservative National governments have held the reins of power for 47 of those, and pale pinkish-blue pseudo-Labour governments, the remaining 21. The last possibly true old-style Labour Prime Minister, Norman Kirk, was elected in 1972 on the slogan, “It’s time for a change” – which voters were ready to accept after twelve years of National rule. Unfortunately, Big Norm died two years later, and Labour were thrown out in 1975, having failed to achieve much at all.


Work it our for yourself.

National returned to office and proceeded to make themselves pretty unpopular, nevertheless winning again in ‘78 owing to their own electoral gerrymandering and Labour’s predictable incompetence. Despite NZ’s manifestly unfair first-past-the-post electoral system, a rejuvenated force had appeared on the NZ political scene. The Social Credit Political League began picking up support from voters fed up with the lies and deceit of the two main parties. After giving the National Party two shock defeats in by-elections, Social Credit actually replaced Labour as the country’s preferred opposition party in public opinion polls in 1980.

That was when the business/financial elite showed their true colours. Going against almost total international opinion, the National Prime Minister arranged for the NZ Rugby Union to host a tour of the country by a team from apartheid South Africa. Whatever naïve political writers tell you, it was a deliberately cynical ploy to divide the country along conventional lines, with the rugby-mad and the libertarians supporting the tour, and left-leaning union-leaders, armchair liberals and “intellectuals” coming out strongly against it. The 1981 General Election returned to the same-old-same-old, manipulators-extraordinaire National and a temporarily ideologically renewed Labour.

The victory went again to National, but by 1984 NZ voters had definitely had enough of them. Seeing the writing on the wall, the same business/financial elite set up a well-financed straw party to siphon off the protest vote and ensure that Labour would finally return to office. But what a Labour Government!! Their public relations creation windbag Prime Minister led a government that implemented libertarian reforms drawing inspiration from the UK’s Iron Witch Margaret Thatcher and US Wild West hero Ronald Reagan.


Sorry, folks – Labour won’t take you to the Emerald City.

The simple fact of the matter is those who hold the real power in New Zealand (and other Western pseudo-democracies) want to retain the Labour Party as the main political “opposition” to maintain the illusion that voters have a choice. “The end of Labour as a political force?” Sorry, mate, that happened decades ago. They’ve been dead for years – they just won’t lie down.

I’d like to believe that the light is finally dawning in New Zealand, and the penny will drop to activate the machinery of a new political age – but I don’t hold out much hope. Too many people want to believe in the yellow brick road.