The tragedy of a rudderless society


Emile Woolf, Going Postal
“Bank of England” by It’s No Game is licensed under CC BY 2.0

The definition of “family values” in most dictionaries includes features such as “upholding the moral and ethical principles of fidelity, honesty, truthfulness; and values that promote the sound functioning of the family, at the same time strengthening the fabric of society”. How strange, then, that the very idea of “family” as the bedrock of sustainable society is in retreat. Economic explanations abound, but as usual they are superficial and wrong-headed. Among the most frequently cited is the declining ratio of workers to pensioners, variously attributable to increasing longevity, improved healthcare, declining working-class immigration and a low retirement age. Yet raising retirement age in line with longevity, for example, would seem a logical step that has never been promoted.

The mechanical response to what ministerial economists perceive to be a “problem” is, of course, to discourage breeding – by means both subtle and gross. When the Chinese people were indoctrinated by Mao Zedong’s lackeys in the belief that their country’s woeful economic performance was caused by overpopulation, a policy of prohibiting couples from having more than one child was applied between 1980 and 2015 – if necessary by enforced sterilization. Like all insane political ideas it had unintended consequences – notably a lasting imbalance between the genders, with many couples choosing to abort female foetuses. But the most damaging impact on the national psyche was caused by the loss of free will inflicted on its citizens. Heaven protect us from those who seek to uphold “the greater good”!

Throwing taxpayers’ money away

While fiddling about with its statist objectives government loses sight of what matters most. The number of people is far less important than what they do. The number of taxpayer-funded quangos and office-holders in local and central government, for example, has grown exponentially under the Conservatives – but their contribution to economic growth is another matter.

Public servants could, of course, undertake the useful task of removing bureaucratic and unnecessary regulations, which is the purpose of the Retained EU Law Bill, still awaiting a third reading in the Lords, having already been passed by a huge majority in the Commons. It covers thousands of EU laws passed over a period of 50 years, some inherited from before Britain joined the EC.

Addressing the task of eliminating or revising legislation inherited from the EU goes to the heart of Brexit. Given persistent anti-Brexit sympathies in government and the civil service, the task of extricating ourselves is proving sluggish – but until this is achieved our statute book and case law will, by default, remain subject to chunks of EU law that was passed by the EC’s Council of Ministers (i) by majority vote; (ii) behind closed doors; and (iii) without producing transcripts. The new Bill initially included a  “sunset” clause that would have revoked all remaining EU law at the end of this year, but even this has now been amended. Instead, at least 600 pieces of retained EU law will be set out in a revocation schedule, which will be “closely examined” by parliamentary lawyers to assess the potential impact on UK citizens of revoking it. Any laws not listed in the revocation schedule will be retained automatically. And we imagined that we left seven years ago. Will we ever escape!?

Our PM is no economist

When Rishi Sunak entered the upper echelons of political life, his illustrious record of past appointments was trumpeted as evidence of his multifaceted skill-set. After graduating from Oxford and Stanford he spent time at Goldman Sachs and promoted hedge funds in the UK and in Silicon Valley, before becoming Chancellor of the Exchequer. Sadly, none of this glitzy background appears to have included instruction in economics at even the most rudimentary level. In two years as Chancellor he collaborated with the Bank of England in its frantic money-printing escapade, inflating the currency to levels of debasement not known in 50 years. His notorious “eat-out-to-help-out” campaign during the Covid lockdown was just another hare-brained giveaway by the Treasury. It added more fuel to the inflationary furnace and demonstrated the bankruptcy of its intellectual resources.

Sunak and his central-banking twin, Andrew Bailey, vie with each other for the bottom-of-class economics position. To this day Bailey can’t understand, let alone acknowledge, that it was his Bank’s Monetary Policy Committee that applied Quantitative Easing as the remedy for the widespread economic inertia it had actually caused by its furloughs, slashed interest rates, irresponsible mortgage-lending, guarantees of non-performing loans and irrational support for zombie businesses. Last year he persisted in claiming that the consumer price-rises taking hold were “merely transitory”. Only last week he conceded, in an uncharacteristic flash of humility, that important lessons remained to be to be learnt at the Bank of England, notably that its 2pc inflation target is nothing but a woeful aspiration if you don’t know (i) what “inflation” means, and (ii) what causes it.

As for the PM, however, his threefold remedy for the eye-watering level of price-inflation taking a tragic hold on household living costs, has been to (i) plead with businesses to resist demands for increased wages; (ii) plead with workers to moderate their pay demands; and (iii) plead with supermarket bosses not to raise the prices of essential foodstuffs. Half-decent policies don’t depend on so much pleading. This takes one back to the “prices-and-incomes” policies of Harold Wilson and the economic management  policies advocated by Michael Foot, Wedgewood Benn, Clement Attlee and Nye Bevan – inspired by Karl Marx and fully implemented by Lenin, Stalin and Mao! Oh, and just in case you need reminding, we are being governed under the administration of a British Conservative Party.

Loss of trust in the currency

The citizenry at large is the victim of ignorance in high places, and is made brutally aware of it whenever they dare to go shopping. The conclusion of this process is, and must always be, the public’s loss of trust in the official currency. When that happens, and it could be sooner rather than later,  it will set off a chain reaction that culminates in the realisation that the fiat dosh that the government has foisted on them for so many years is intrinsically worthless without their own belief in it. This in turn triggers the crack-up boom: people scurrying to get rid of their debased money, exchanging it for anything possessed of reliable purchasing power.

Since the public’s recognition of fiat-depravity applies to both their cash and bank balances, a systemic crisis in banking will materialise when people are brought face-to-face with the fraud known as fractional reserve banking and are made to realise that at any moment only a fraction of the money they deposited is actually there. Contagion like wildfire will put the finishing touches to the demise of everything people believe to be “money”.

Ongoing developments in China, Russia, other members of BRICS countries and their middle Eastern affiliates have demonstrated the likelihood that currencies founded on nothing more than a wing-and-a-prayer will be replaced by a commodity-based medium of international exchange, usurping the dollar’s hegemony as the universal reserve currency. This has never been more necessary. And, incidentally, what better way is there to cement treaties under which peace is preferred to war as a means of settling differences? We shall see, of course.

American debt default

But meanwhile we can see the practical result of 20 years of piling up more and more debt and bigger deficits as if the USA were somehow exempt from the laws of debt-repayment. The bipartisan deal just agreed by US president Joe Biden and Republican House Speaker Kevin McCarthy has one main purpose: to stop America from defaulting on its debt in early June, when the Treasury is projected to run out of cash to pay its bills, currently standing at $31.4 trillion. But whenever welfare entitlements are linked to voting outcomes we shouldn’t anticipate more than a cosmetic budgeting fudge – so it’s no surprise that the deal amounts to little more than a face-saving exercise in buying time before the next round of money-printing by the Fed and its brain-dead cohorts.

© Emile Woolf June 2023 (website)