Gorgeous George and Bradford West

Fair play to George Galloway, he managed quite the upset with his win at the Bradford West by-election. I do find it interesting that he no longer wishes to represent a London constituency. What's wrong, George, did your stint as Bethnal Green MP prove unfortunately revealing to the local populace?

Inspector Gadget, with whom I do not always agree but whose opinion should be considered, has an interesting position that GG's election should warn people away from elected police commissioners. I'm not sure that I agree with his conclusions, but put forward his argument for consideration:

Before the last general election, I raised the issue of extremist PCCs personally with an influential Conservative politician. He informed me that it didn’t really matter because the PCC has no real power over operational policing. I wondered what the point of them is if this is true. The fact remains that they can 'hold the police accountable' and 'dismiss a Chief Constable'.

I'm reminded of the maxim in the financial markets that "if the market can move freely, it can move stupidly". That's not necessarily an argument against having either a market or an elected PCC, but the point deserves thought.

The Principality of Sealand

ArsTechnica publishes fascinating summary of an attempt to make and run a data haven in the smallest area to lay claim to nation status - the Principality of Sealand, just off the coast of the UK.

The article puts its finger on the nub of the difficulties with "independent" micro-nations:

Even if Sealand were "officially" its own country, independence isn't worth much without allies. Any nation with warplanes — no, make that any nation with an inflatable boat and an outboard motor — could blow the place up. The only thing stopping it would be the United Kingdom's displeasure at explosions in its territorial waters. Any protection offered by Sealand's larger neighbor, however, would presumably come with enough strings attached to raise the question of why the servers should be on Sealand rather than onshore.

For fans of Neal Stephenson's Cryptonomicon it's instructive to see how hard it is in practice to implement a data haven and deal with the inconvenient logistics, security and political considerations imposed by nearby nations who have a strong interest in preventing the haven from operating.

Government: shooting itself in the foot

The Government is worried about fuel shortages with the planned tanker driver strikes, so what does it do? It It tells motorists to plan for fuel shortages:

The Government is considering stockpiling fuel, with emergency services having a priority on supplies. No 10 said motorists and companies should also be planning for the pumps to run dry.

Motorists respond as anyone could have foreseen:

Motorists started to panic-buy fuel yesterday as Government officials warned them to prepare for a rolling national strike by militant tanker drivers.

(facepalm)

The canonical Daily Mail food article

The story of Sara Agintas and her weight gain is truly wonderous to behold.

• Unemployed layabout: check
• Parent of many children by several fathers: check
• Overweight: check, check, check
• Drinking to excess: check ("it's fine to drink 50 units per week while pregnant, I just dilute it with ice")
• Housed at taxpayer expense: check
• Bonus marks for falling through the stairs of her house and requiring the council to reinforce them
• Spending huge amounts of benefit money on food: check
• Teenaged mom: check (first pregnant at 17)
• Demands large amounts of taxpayer money for medical treatment: check

'I can’t afford a personal trainer or weight-loss surgery – I need help from the taxpayer. I know it's my fault I'm fat, but my pregnancy cravings meant I couldn’t stop eating,' she told Closer.
Read the full interview in this week's Closer magazine on sale now

News article trailing a magazine feature: check.

There's no direct link to rising house prices, to be fair, so I think it's still just possible for another Daily Mail article to top this; however, it will be hard to beat.

Looking at the photo in the article, I can't help but feel sorry for that sofa.

Segregation, shmegragation

It's starting to look a little dark for Jon Corzine as the investigation into the collapse of MF Global implicates him directly in sending money from segregated client accounts into brokerage accounts.

For those readers wondering "is this a big deal?" I can answer:

Yes. It's a big deal. It's a multiple-years-in-the-slammer deal.

It seems as if reality is finally catching up with Corzine.

Somebody should Sioux

Dana Lone Hill, who may or not be a Sioux by blood is complaining in Comment is Free about the University of North Dakota's football team being called the 'Fighting Sioux'.

Apparently some of the local Sioux tribes don't mind, but this doesn't cut it as far as Dana is concerned:

The University of North Dakota has been fighting via lawsuits and legislative action to keep its nickname even though only one of the two Sioux tribes in North Dakota have granted approval, and there are nine other Sioux governments throughout North and South Dakota.

Well, 50% of the tribes isn't bad going. I'm not sure about the distinction between tribes and governments, but find it telling that Dana doesn't seem to elucidate.

This isn't one of the stories where I'd expect the CiF commenters to be unsympathetic, but they surprised me this time: oozaveared gave a counter-example:

University of Notre Dame are the Fighting Irish
http://en.wikipedia.org/wiki/Notre_Dame_Fighting_Irish
They don't think people take that to be that they are warlike savages. How come you do?

Perhaps Dana thinks the Irish should have a referendum on allowing Notre Dame to use the name and the leprechaun caricature?

I did enjoy Florence5's comment:

Precisely! Maybe the University of North Dakota should rename their team to the English Chavs With Poor Dental Hygeine, you know, playing on the negative stereotypes people have of the English? What? I hear you howl? That's not fair, not all English are like that, in fact, it's a very unfair stereotype etc etc. See?

Actually I'd be all in favour, though the cheerleaders would have to tweak their rally cries: "2! 4! 6! 8! Are we bovvered?"

While not wanting to judge by appearances, Dana's photo for CiF doesn't exactly give the impression of someone wanting to see both sides of the story. She has a book coming out, apparently. I expect it will be quite the rattling read.

Blog of the day: Minimum Knife Pricing

Over at Mr. Wadsworth's, a wonderful spoof on minimum knife pricing:

Ministers say the proposal would not affect responsible restaurants or diners. But they predict that it could significantly change the behaviour of those who cause the most problems for hospitals and the police, by making it more expensive to stab somebody.

Go read the whole thing.

GS on a muppet hunt

Sure enough, following Greg Smith's very public resignation last week, it seems that Goldman Sachs is trying to contain the damage by hunting for emails that mention 'muppet'.

Well, I suppose their IT and Compliance teams don't have anything better to do...

In fact, it's probably not a bad idea; better that they have found, disciplined and perhaps fired the people concerned before a Congressional / Senate / AG investigation does it for them. If they're quick, they might be able to fit it into the current round of redundancies.

Bullet-proof vests only get you so far

It seems that the French RAID have managed to prevent a long and tedious trial and confinement of the demented Mohammed Merah. Possibly the best result all around, except perhaps for M'sieur Merah. Props to the RAID sniper who managed the shot at what must have been at best a fleeting target, given that Merah was climbing out of the window.

If any of Merah's compatriots are thinking about organising something similar, might I recommend some form of large and sturdy hat. It probably won't stop a high-velocity jacketed round, but might keep most of the bits more or less together for later return to the skull post-mortem.

[I didn't realise until now that the French National Police had their own special forces units (RAID within Paris, GIPN outside) in addition to the Gendamerie's better-known GIGN. Live and learn. Or not, in the case of Merah.]

The USPS wants to send more junk mail

The US Postal Service, possibly most famous for the character of Newman in Seinfeld, is imploring businesses to use them to send more junk mail because they just don't send enough as it is.

Uh-huh.

I've seen what a typical American mailbox looks like. Sorting out actual mail from the various flyers, "news/offers" pamphlets, catalogs and miscellaneous tree-destroying crap requires dexterity and the patience of Job. I particularly liked the way they'd wrap real mail in the offers mini-newspapers so that you had to work through the whole thing before throwing it away, lest your cable or power bill end up in the recycling bin.

If this appeal bears fruit, I confidently expect US citizens to start leaving mousetraps, poisonous spiders and Claymore mines in their mailboxes. If the USPS wants to address its ballooning deficit, it needs to do something about its pension promises. Alienating its customers is not going to help, whatever it might think.

National Insurance is not insurance

For some reason this has been increasingly irritating of late. Let's just recap how National Insurance works:

• People who earn more, pay more;
• People who have saved more and end up requiring state support, receive less (means-tested benefits);
• People in lower-earning jobs who have higher risk of joblessness, pay less;
• The Government contributes on behalf of groups of people who are not earning (e.g. stay-at-home moms);
• Everyone receives the same state medical care, regardless of NI contributions;
• Substantial contributions are required from employers, who receive not a penny of benefit;
• The permanent jobless, who have never paid premiums, are some of the primary beneficiaries.

Please, could someone tell me in what way this is "insurance"?

I'd feel a lot better if the Government would just come out and admit that this is simply additional income tax plus employer tax and amend the tax scales accordingly. But perhaps the sharp shift in the income tax rates and bands would make things a little bit too obvious for the comfort of the Civil Service.

Good grief, my ears!

I think my eardrums have just burst and started to bleed. It seems that the Guardian columnists and readers are not too impressed with George Osborne looking to break the national public servant wage structure:

It has not yet been decided if localised pay will apply only to new staff or to existing staff as well, but it was being stressed that no current employee would suffer a pay cut. Instead pay levels will gradually be adjusted to take account of costs, leading to larger pay rises in the south-east where some labour shortages exist.

Please, please apply it to all staff. Otherwise you're going to have apartheid between older (unsackable) staff with the higher wages and new staff with the regional variation. What happens when staff compete for a promotion? No, the only feasible way I can see to manage this is going to be for the poorer regions to freeze public sector worker pay for longer until public sector wages are roughly aligned with local private sector wages.

The comments are truly a treasure. Formboy pithily expresses a common sentiment:

I hope Gideon hasn't forgotten that public servants in some of the more deprived areas in this country serve some of the most needy people in the UK. But then again he probably doesn't give a flying fuck.

I think Gideon is acutely aware that the needy people in the richer segments of the country get screwed over by a desperate lack of good public servants (teachers, nurses etc.) as the buying power of their wages are uncompetitive compared with the same job and same salary in e.g. Cornwall or Staffordshire. Since public sector workers are outnumbered by private sector workers by something like 5 or 6 to 1, there's a greater overall societal benefit in Gideon's approach.

The thing is, my social conscience chums, George is right. If this works out, it's going to be much easier for a hospital, police authority or LEA to pay more to attract staff to fill a local shortage - they have no such ability as it stands, and are at the mercy of Whitehall. Swan17 makes the point:

When I was a London-based Civil Servant I had to travel to other parts of the country as part of my job. I can still remember spending a week in Newcastle and discovering that my wage would put me in the top 10% of the area whilst I was still fairly junior. Yes, I know that London Weighting does help a bit but National Rates are not always the answer.
Companies can do it so why should the Civil Service be different?

Though a mischievous thought does occur that it would be interesting to weight MP's salaries according to a multiple of a standard Civil Service grade in their constituency's main city...

Mutant mammoths

Oh lordy, they're at it again. Russian scientists plan to resurrect mammoths by injecting mammoth DNA into elephant ova. This DNA has been hanging around since the woolly mammoth went extinct several thousand years ago. What could possibly go wrong?

Greg Smith and the Squid

I've been enjoying the coverage of Greg Smith's very public resignation from Goldman Sachs this morning. Man, if you're going to do something, do it in style.

A few things to note:

• "Executive director" (ED, also known as VP) at GS London is one notch below Managing Director; these guys are well paid but not paid a fortune and have very little in the way of people managing duties. They form about 40% of the GS workforce. Greg was somewhat overhyping his position, but heck who wouldn't?
• GS paid out its annual bonuses in early February, and bonus season this year was very bloody: few people outside the big producers got much. That makes me think they paid Greg badly, but weren't intending to fire him any time soon (otherwise they'd be paying nearly a year's salary in severance) so he saw little point in hanging on.
• Greg almost certainly didn't get any significant share units in this or recent bonus seasons, otherwise he'd have hung on until later this year when they vest. This makes me think that accusations that he is only resigning now that he's flush with bonuses are somewhat wide of the mark.
• No chance anyone in the Street is going to hire Greg for anything meaningful now, he's burned his bridges; but he's a a big boy and doubtless knew what he was getting into.
• Resigning from GS, instead of being fired, means Greg can more or less say and write what he likes about life at GS. I give it 48 hours max before he signs a book deal, and 1 month max before the book comes out; he's used to working 70+ hour weeks, and there's a definite payoff if he can get a reasonable book out before the echos of this story fade.

I note that GS shares dropped 3.8% today, where MS was down 2.1%. So that's a 1.7% drop (about $1.90/share) likely attributable to Greg. GS market cap is about $62bn, so Greg cost shareholders just over $1bn. Oopsie!

Some nice commentary going on. Of all the spoofs, I liked Andy Borowitz's apology from Goldman to its clients best:

And as you read his words, you no doubt asked yourself this troubling question: how could Goldman have hired such a person?
At Goldman, we pride ourselves on our ability to scour the world’s universities and business schools for the finest sociopaths money will buy.

The main point of interest is that GS execs refer to clients as "muppets" in internal email. That's pretty stupid. Calling clients "muppets" in private conversation is rude, even if accurate sometimes, but you can get away with it. Writing it in an email that gets permanently stored and is discoverable in legal actions - well, let's just say that even Fabulous Fabrice Tourre wrote his stupid emails from his private account, which is several notches of stupidity lower than this behaviour.

Update: Interesting reactions from former GS employees on this situation.

I can't help thinking that this episode makes GS very vulnerable to another Congress-induced investigation, if some politician or Attorney General somewhere feels like making hay in the sunshine. (And why wouldn't they?)

Insanity on inter-racial adoption

This is going to be a good one. Professional playwright Lemn Sissay weighs in on the issue of inter-racial adoption.

Lemn argues, or perhaps "rants" describes it better, that the Government is reversing all the good work done in the past 25 years for black children in care:

These policies play into the popular misconception that colour blindness is a goal when in fact it is a disability. In this context, a disability is used to make those of colour and their needs invisible.

So seeing people for who they are rather than what the colour of their skin is a bad thing? Didn't we, the citizens of the Western world, just spend 40 years trying to fix that very problem?

He's keen to blame the authorities of course:

The point made in 1983 still stands: why has the government not put as much energy into finding black adopters?

Well, the Government can only do so much. If a black married couple want to adopt, they can put themselves forward. If they're not putting themselves forward, what should the Government do - bang on their door and demand they volunteer?

And besides, why say a family environment is all a child in care needs as quickly as possible when 50% of children in care have fled an abusive family environment as quickly as they could?

I'd like to think that we take a little more care these days in checking out couples who wish to adopt. Indeed, from the experience of my friends who attempted to adopt, you would get a less exacting examination if you went through airport security with a large lump of Plasticine studded with wires and batteries. The record of criminal behaviour of children who went through care is appalling. Heaven knows, I don't envy them the experience. If we can do something to put them in a stable home environment then who gives a flying fox what colour skin the adopting parents have?

Lemn also fails to note that colour is not a discrete thing. Should a child from Nigerian parents have a West Africa adopting family? What if one parent is Nigerian and the other is a Scottish Islander with red hair and green eyes? How about Vietnamese-Indian? Who produces the scheme for ranking parents' ethnic origins for each potential ethnic mix?

And why say care is a bad thing – rather than "we can make it better" – if it is care under your watch?

Well, we've tried to fix care and we failed. The general problem seems to be that no-one is really invested in its success. Perhaps there really is no substitute for a real family who cares for a child, even if the child is not biologically theirs.

Lemn, you're either very hard of thinking, or you're just an asshole who doesn't care what damage your ideas do to kids as long as they're right-on.

[hat tip: NickM at the Kitty Counters]

Free the banks - problem solved?

An interesting post in The Atlantic on how to fix the banking system by Pascal-Emmanuel Gobry. He argues that one of the basic reasons for the financial crisis was the principal-agent problem: many of the people involved knew that what they were doing was going to lead to a blow-up, but their incentives were such that continuing as long as possible made financial sense. No argument here.

His proposed solution is to re-introduce the partnership model in financial firms, removing the public shareholder financing of their activities in order to insure that those with skin in the game have a direct mechanism to rein in excesses in risk of their firm; that this necessarily restricts the size of firms (and hence increases their number) is regarded as a feature, not a bug. Having considered this at length, I think I'm sympathetic. It will of course increase costs to some extent (loss of economies of scale) but it will be very interesting to see the degree to which this happens. I have a sneaking suspicion that there's a lot of "the customer will pay what we ask" going on currently.

He does assume that available credit will reduce massively, which seems like a fair assumption: less risky behaviour means less attractive returns means less money available. But perhaps this is merely a consequence of investors realising that they will bear their risks alone:

I think it was The Epicurean Dealmaker who said on Twitter that the mandatory disclosure/warnings for anyone who signs a financial document should be a slap in the face and the phrase "CAVEAT EMPTOR!" shouted into their face drill instructor-style.

You can just imagine it, with apologies to R. Lee Ermry:

Are you quitting on me? Well, are you? Then quit, you slimy fucking walrus-looking piece of shit! Get the fuck off of my SIV! Get the fuck down off of my investment ve-hi-cle! NOW! MOVE IT! Or I'm going to rip your balls off, so you cannot contaminate the rest of the S+P 500! I will motivate you, Mr. Smyth-Jones, IF IT SHORT-DICKS EVERY CANNIBAL ON THE CONGO!

They have Freddie Mac, we have Davie Cam

After the sterling success of the US Government's guarantee of homeowner loans, the UK Government wants to join the party.

What could possibly go wrong?

Oh boy, the usual suspects just love this:

Despite the political emphasis on first-time buyers, the guarantee scheme will be open to everyone, meaning that existing homeowners could use it to trade up to larger properties.
Nonetheless, the Council of Mortgage Lenders has backed the scheme as "good news for home-buyers".

I think they meant "good news for homeowners and mortgage lenders" there. If you want to make houses more affordable for first time buyers, all you have to do is make it cheaper and easier for them to be built (new supply) and more expensive to own-to-rent (freeing up existing holdings). All this will do is artificially hold up headline house prices, benefiting current owners and those who have written mortgage notes against houses.

I see the estimable Mark Wadsworth hasn't yet commented on this: I expect he's probably in surgery to repair a very recently ruptured spleen. I look forward to what he has to say...

Update: Mr. Wadsworth does not disappoint.

Flood, glorious flood

Is that the high-pitched whine of rent-seeking that I hear? The government has the audacity to suggest that householders in flood-prone areas pony up for their own flood defences and this doesn't go down too well with the householders in question:

The Joseph Rowntree Foundation has also released a report at the conference that argues against insurers pricing out flood-hit households purely based on risk [my emphasis] and calls for further government intervention

If insurers are not pricing purely based on risk, my friends, then they are not actually providing insurance. They're either penalising or (in this case) subsidising the affected households. And since the insurers aren't going to eat the cost of that extra subsidy, it's going to come from householders that were sensible enough not to buy a house in a flood-prone area...

The rent-seekers are out in force:

Charles Tucker, chairman of the National Flood Forum, the charity running the conference, said: "We believe this gives overwhelming weight to the case for government to step up to the plate to ensure that the market in flood insurance is fair and equitable.

If householders pay according to the actual risk of flood damage, that seems pretty fair to me. Now what do you mean by 'equitable', Charles? I think you mean "we want Government cash". And since governments don't have any money themselves, this is actually taxpayer cash.

I would be in favour, however, of sticking the bill for flood damage to recently built homes on a combination of the builders who built in a flood risk area and the surveyors who said it was OK. I give you, for instance, all the homes around Tewkesbury and Evesham which went under water; the area floods annually, so flooding risk should at least have been on the builders' radar:

A handful of those I meet recount a telling anecdote about a new housing development in the nearby village of Mitton which was originally called the Water Meadows; in the wake of the floods, they say, the word "water" disappeared from the signs for it.

But caveat emptor: if you buy a house in a flood-prone area, it's up to you to mitigate or pay for the flood risk. The Government is merely taking a principled stance on the matter. I may have to have a lie-down.

If you haven't read GS Elevator tweets, you should

Follow the travails of harried and overworked financial nerds here.

For reference, I don't believe more than half of those quotes really came from within a bank, let alone Goldman Sachs.

The Foreign Office - what side is it on?

In her now dated but still hilarious book Members Only, recounting her adventures as a journo inside Westminster, Frances Edmonds relays the tale of a visitor asking for directions to the Foreign Office:

"Which side is the Foreign Office on?" he asks a passing police officer.
"Well," says the officer after some thought, "they're supposed to be on our side. But sometimes I wonder."

Sure enough, the account of Foreign Secretary William Hague losing his temper in discussion with senior Tory MPs confirms that this perception is still extant:

He [Hague] lost his rag when outspoken Tory Douglas Carswell told him he was 'under the thumb of pro-Arabist' diplomats in the Foreign Office.
'The Foreign Office displays a kind of bigotry towards Israel,' said Mr Carswell. 'The whole idea of self-determination in the Middle East is anathema to some Foreign Office people. It is anti-Israel just as it is pro-EU.'.

He wasn't the only one either:

Robert Halfon told Mr Hague: 'The Foreign Office has not done enough to stop the delegitimisation of Israel. We must speak up for its right to exist.'
Right-winger Priti Patel said: 'We must be more critical of the Palestinians for not giving up violence.' And Nick Boles, a close ally of David Cameron, claimed that the Foreign Office had not done enough to condemn the Palestinian National Authority for glorifying suicide bombers.

Hague himself strongly denied this:

Mr Hague was furious at Mr Carswell's personal onslaught. 'You are living in a fantasy world and talking total nonsense,' he told him. 'The Foreign Office is not pro- Palestinian. I have never heard such claptrap.'

One has to wonder, though, if there's no smoke without fire. There certainly seems to be recurring clouds of anti-Israel smoke from the FO - the Yes, Prime Minister episode A Victory for Democracy features the FO ignoring a Prime Ministerial request to abstain from a UN resolution condemning Israel. Seems like very little has changed in public perception.

Bill Quango MP for PM

A robust defence of capitalism. Read the whole thing.

I'm from the Government and I'm here to help

I used to think that food safety inspections were one of the few matters where state intervention in private business was justified and a consumer benefit.

I was wrong. As an example from NYC:

Pork is supposed to be cooked to 165 degrees (twenty degrees higher than the USDA guideline!) unless the customer specifically requests otherwise. I’ll save you the trouble of investigating: a 165 degree pork chop is terrible. It will be dried out and unpleasant. At home, I cook mine to 140.

I particularly hate this trend in health and safety legislators: "agency A says the limit is X, so we should require X+2 in order to appear more rigorous". X is bound to be a conservative estimate in the first place.

For reference, I've been served a surf+turf in NYC which came with a live cockroach in the deep-fried prawns, and that restaurant had presumably passed departmental inspection. They're spending all this effort trying to eliminate the long tail of risk, but failing to notice the baseline hazards that they're simply missing or unable to spot.

[Hat tip: the inimitable Amy Alkon]