A spot of banker-bashing...

I can be certain of one thing.

Banker-bashing will still be the sport of the moment.

And why not? After all, it was those greedy shysters who got us into this mess in the first place, wasn’t it?

Er – no!

Well, Gordon Broon; Blair; the Labour government? Nope.

Let me go back nearly 40 years when I bought our first house.

Mortgages were the province of Building Societies. They were ‘mutuals’, owned by their members. Their business was to lend members’ money to other members. To get a mortgage you had to be a member. To become a member you had to make a deposit of cash into the society. You also had to put up a substantial deposit – about 20% of the mortgage required. The society would only give a mortgage on one salary even though the house was being purchased in joint names. The mortgage term would be a maximum of 25 years or to age 65 whichever came first.

House prices remained almost unchanged from pre-WW2 to the 1960s.Then the market started to correct, and we had the first housing boom in the early 70s. Owners began to accrue tasty ‘positive equity’ – the house was now worth much more than the purchase price and mortgage.

Come the 70s and 80s and the financial sector woke up to the possibilities of making a shed-load of money out of housing loans.

So the banks climbed on board along with the insurance companies offering endowment mortgages.

Then the building societies, seeing an opportunity for enrichment, de-mutualised and became banks able to lend money to anyone, not just members.

A huge cash-flow was created, which inevitably led to a housing boom as people started to scramble to get aboard the gravy train.

Deposits were scrapped and, believing against all experience that the boom would last forever began lending at 125% of market value on joint incomes, and because people could now borrow humungous sums of money a bubble was created.

So were people content to see the value of their asset rise?

Nope.

The banks then encouraged to refinance their loans up to the new value of the house, creating even greater debts. The money was spent on the ‘have it all now’ principle – SUVs, 3 holidays a year, ‘stick it on the credit card’.

But of course the house was not an ‘asset’ until the mortgage was paid off; it was a debt, a liability.

To fund all this, the banks were not using customers’ deposits; they were borrowing from other banks.

Then the wheels came off, and banks started to refuse to refinance other banks – the so-called ‘credit crunch’.

So the bubble burst, thousands found themselves in negative equity –they owed more than the house was worth and since they could no longer refinance they could no longer finance their credit-card lifestyles.

And who was responsible for what has now come to pass?

Why, ourselves, the silly improvident generation that thought that you could buy the good life on tick!

Dominic Strauss-Khan’t..........

.........tell the difference between a pro and an enthusiastic amateur.

Here is a piece from the WSJ.

‘Paying prostitutes isn't illegal in France but encouraging prostitution

by offering them to others and using corporate funds to pay for them

is.

According to French news reports, Mr Strauss-Kahn was invited to

parties by the prostitution ring.

Asked on French radio in December about whether Mr Strauss-Kahn knew the women at these parties were

prostitutes, the former IMF chief's lawyer Henri Leclerc said he had no

reason for think so.

'He could well have not realized it, because you

see, in these parties, one is not necessarily clothed and I challenge

you to tell a naked prostitute from a naked lady of the world'. Mr

Laclerc told Europe 1 Radio’.

DS-K should be thanked for contributing to the gaiety of nations.

And was it purely symbolic that I drove through a village near the Burma border today called ‘ Mai Prik’?

Hooray for Hillary.

I managed to wade through a small part of a nostalgic documentary on Bill (slick Willy) Clinton last night and was talked to sleep with the distinct impression that Hillary was worthy of more praise. A feisty lass with cerebral talent to spare, she was his anchor and not the other way around. It is no wonder she swallowed her pride and took him back after the Monica Lewinsky disaster; she had plenty of practice at it.

When all is said and done, and the hindsight of history is committed to serious documentation, Hillary will be the one who garners the lion's share of credit and acclaim. This morning I awoke to the news that she, together with her Mexican counterpart, penned an agreement to explore and share about 1.5 million acres outside our continental shelf in the Gulf of Mexico. This is a follow-up to an outline agreement that Obama and President Calderon signed last year. A major impact of this agreement is that it steals the fire from critics, especially those seeking the Republican presidential nomination, regarding Obama's failure to promote oil and gas exploration, to reduce America's dependency on foreign oil and to better manage rising petrol prices.

Praise of Hillary is a turnaround for me as I had been one of her critics. She appeared to be a do-nothing Secretary of State judging from the lack of media coverage on her comings and goings. Not a fair judgment I am sure, but nevertheless, I was critical of her. I also believe that it is a mistake to appoint a woman to lead diplomatic efforts when so many countries are male dominated and disdain any role for women other than that of homemaker and mother. This simply made Hillary's job more difficult. Although such prejudice may not have applied when she suggested to the Russians that we push the 'reset' button regarding our frigid relations, the proposition had no visible effect. I blamed Hillary, but hastily and certainly incorrectly. I was also critical when she agreed to have certain high profile diplomats such as our Ambassador to the UN, susan Rice, and our now deceased special Ambassador to Afghanistan, Richard Holbrooke, report directly to the President and not herself. While this bothered me, I saw nothing indicating that it bothered her.

I entertained concerns that she might run against Obama in the upcoming election, but these were small in contrast to others who were certain she would turn on the President. Hillary herself says no way. She repeated that statement when her name was mentioned to replace the current Head of the World Bank. On a more personal note, she looks tired. Her recent return to the media limelight does not flatter her appearance. Her clothes are often frumpy and no doubt hiding bulges due to weight gain. Her face is deeply lined and her hair is often disheveled and looks in need of a wash. One get's the impression she has given up on herself and her appearance. It is too early to draw any conclusions, but I suspect something is amiss. I hope for her and Bill's sake they are in good health.

Closet feminist?

Am I becoming a closet feminist? A picture in the press of the beautiful Yingluk, Prime Minister of Thailand, got me to thinking that wherever we look these days we see smart, glamorous (some of them) and feisty women.

The Foreign Minister of Pakistan, surely one of the most stressful jobs imaginable, is a beautiful woman in her thirties. The Chairman of the Tory Party is a highly intelligent woman of Pakistani origin who is our surrogate Foreign Secretary when dealing with Pakistan because all doors are open to her and she speaks the lingo.

On David Dimbleby’s new series on Africa, he interviewed a very bright young Ethiopian woman (US educated) who, seeing that coffee, Ethiopia’s most valuable export crop was subject to monkey business from middle men to the detriment of the farmers, established the Ethiopian Coffee Exchange where farmers sell their crop directly from the auction floor. All deals are on the shake of a hand and there are 3 every second. She has transformed the farmers’ lives and prosperity.

In Kenya, he met another such who had established a workshop for leper women to make eco-artefacts from scrap, such as tyres and old hessian sacks. The products are flying off the shelves in the ‘green' shops in the West.

In the media, we have the doyenne of female anchors, Zeinab Badawi, who has been around for nearly 30 years. She has the most perfect received English, and there are others on all channels, many of whom have very dangerous assignments in war zones..

In business there seems to be no limit. The boss of DuPont, the largest business of its kind in the world, is a youngish woman, and there are many more examples of women in positions that would have been unthinkable in past years.

And, of course, we have Hillary who has settled to the job of Secretary of State as to the manner born, and female Prime Ministers of Australia and Denmark.

The downside is that we constantly hear complaints that women get paid less than men (but we are never given any concrete examples) and that there should be quotas to get more women onto the boards of big companies.

The first is obvious nonsense. When a job becomes available it carries a specific salary. There are not two salary scales, one for men and one for women. That would quickly get you into court. What the whiners really mean is that over their working lives women earn less than men. That is true, and the reason is very simple. They have shorter working lives! They have more sense than to devote every waking moment to work. They have families. They retire earlier. They have more intelligent interests than the golf course.

The second is the same kind of patronising nonsense that brought us the dumbing-down of affirmative action. I can’t imagine any-self respecting woman wanting preferential treatment on the grounds alone of her sex.

Thirty-odd years ago, I appointed a Deputy Chief Executive, an extremely capable and well-educated woman. I was appalled to learn that as a single woman, no matter what her earnings, she was not entitled to get a Building Society mortgage. I fixed one in-house.

Sometime later she applied for a Chief Executive vacancy. She wasn’t short-listed, so I ‘spoke’ to the outgoing CEO to make sure she was. She got the job, which was a ‘first’ for a woman. But she said that she had been asked a lot of questions that would not have been asked of a man and which she found offensive, such as ‘Why are you not married?’, ‘Are you going to get married?’, ‘What will you do if you have children?’. Most of these questions were asked by the women on the panel.

Thereafter, she raced past me career-wise, ending as a big-shot with the World Bank before turning to consultancy.

We have sure come along way.

Swiss role.....

I have some updated information on one of my favourite topics, the hypocrisy of the debate on ‘tax havens’.

I have previously dealt with the source of the vast amount of moolah that gets squirreled away. So where does it all go?

Here are the top five destinations:

1.   Switzerland (surprise, surprise): $2 trn (27% of total).

2.   UK and Channel Islands: $1.8 trn.

3.   Caribbean: $0.8 trn.

4.   USA: $0.7 trn.  (Please try to keep up, you Yanks).

5.   Luxembourg: $0.6 trn – where the hell do they keep it in that tiddly little nowhere-place?

And which countries are the star contributors? Figures from another source suggest that Swiss deposits are even larger than those above.

Here are the top five:

1.   India, would you believe, with $1.5 trn of Swiss deposits alone, which is 10 times India’s foreign debt.

2.   Russia: $470 bn.

3.   UK: $390 bn.

4.   Ukraine: $100 bn.

5.   China: $96 bn*.

I previously poured scorn on the US and UK posturing about ‘Swiss bank accounts’ (good tub thumping stuff in this ‘bash the bankers’ climate). What I said was that the deal whereby the Swiss had agreed to something vaguely like disclosure after an 18 months lead-in was nonsense. In 18 months, all private depositors who were foolish enough to open off-shore accounts in their own names would have long since departed to Panama or Singapore or some other customer-friendly destination. Most accounts are anonymous trusts, shell companies or other special purpose vehicles that have no audit trail.

In any case, Americans have no need to resort to Switzerland when they can stash the cash in a shell company in Nevada where any disclosure is against state law and interest-earnings are tax-free.

So can we take seriously the populist polemics of politicians who are always threatening to close ‘tax havens? With the bulk of deposits from outside the Anglosphere, the incentive for the Swiss to disclose all is zero.

Especially as the two largest tax havens are the US and the City. And they keep obsessing about the Swiss role!

*All illegal capital transfers. 

The piss-poor POTUS primaries.......

Romney is still in the lead, but by the skin of his teeth. As I predicted earlier, Santorum has begun picking up support from conservatives who previously favored Gingrich. It took longer than I expected for this to happen. The reason for the changeover is that conservative voters are beginning to understand that Newt is not all that conservative and that he carriers far too much controversial baggage. All in all, the GOP should be ashamed of itself for not being able to field a charismatic, popular and winning candidate.

Analysts are beginning to suggest that we may have a brokered GOP nominating convention. This happened last in 1948. It occurs when no clear winner emerges and allows the party to field its preferred candidate from among the existing contenders or from outside. One reason for the poor showing is that popular, effective and electable Republican politicians don't want the job. Life on the election trail is excruciating and takes its toll on everyone involved including the media. It is also risky both personally and politically. Just now far too many negative facts are being exposed for all the candidates. At the end of the day I would be surprised if any one of them would be elected.

Recently, Gingrich's people called on Santorum to pull out of the race so that the latter's following could go to Newt's camp. The opposite is now happening. There are appeals for Newt to drop out. He will not. More importantly, the combined support of Gingrich and Santorum would come close to rivaling Romney's support. As long as far right votes are divided between Gingrich and Santorum, Romney is safe. It is now being forecast that everything will come to a head on Super Tuesday.

ISuper Tuesday is the date on which the largest number of states hold their primary election. Tuesday is only significant insofar as it is America's normal voting day. This year, 10 states will hold their primaries on Tuesday, March 6th. As many as 24 states participated in previous Super Tuesdays. States do have the right to change their primary election dates, hence the variation.

The major irony in the 2012 campaign in my view is that Romney needs to be far to the right in order to win the Republican nomination but needs to be a moderate conservative in order to beat Obama. It would be difficult for an ultra conservative or any person on the far right to win a presidential election given demographic preferences.  Just now, Romney is exposing his ultra conservative credentials every chance he gets. He is desperate to win the nomination and will go to extremes to do so. In fact, he is a moderate conservative judging from his stand on abortion, gay rights, medicare and similar benchmark issues distinguishing conservatives from liberals. The problem is he has to lie, spin, contort and otherwise torture the facts in order to win the nomination. The question is, will he continue such behavior should he become president?  

More importantly, why does our electoral system force people to lie in order to win their party's nomination?

Syria: Russia & China shafted!

Something that has puzzled me greatly since the Security Council veto on Syria; why is Russia making itself the pariah of the Islamic world outside Syria and Iran? Obama must be doing handstands at the poisoned chalice being passed on to Putrid.

Devilling around for an explanation, I get some clues from the Economist and elsewhere.

First, stuffing America and, to a lesser extent, the West is part of the Russian mind-set. It is a piece of grandstanding by the next and perpetual President in the run-up to an election. Putin has at last the prospect of stern opposition from a large section of Russian society.

This leads on to the next possibility.

Events in Tunisia, Egypt and Libya and the toppling of unpleasant and dictatorial regimes sets a nasty precedent for Russia. The criminals in charge of a totally corrupt, dysfunctional and disintegrating regime where the rule of law does not run will not want the hoi-polloi to start getting ideas.

Then there is the matter of arms. Syria is largely dependent on the Russian arms industry. Putin can kiss that good-bye if (when) Assad goes the same way as Gaddafi.

And Syria hosts a Russian naval base. The outcome would be the same.

What of China?

Mr Chin clearly feels that the time has come to punch his weight in international affairs. The policy was to project ‘soft’ power as a counterweight to America’s ‘hard’ power, to spread its influence around the world, particularly those areas where it has a substantial economic interest, such as Africa. In fact, it has instead been projecting ‘hard power’ in the South China Sea and the Indian Ocean that has left SE Asian counties very worried. American ‘soft power’ is successfully bringing them on-side, as in Burma

It also has a similar motivation to Russia’s. Accepting the principle that loathsome regimes may be toppled by an exasperated people backed by the international community must cause shivers in the politburo of Beijing. ‘Regime change’ to reflect the will of the people is definitely off the agenda, as far as Mr Chin is concerned.

So was the Security Council veto a defeat for international diplomacy?

On the contrary, it was a major triumph, especially for the US. For America to call the veto ‘disgusting, to the applause of the rest of the world,  speaks volumes.

America has successfully passed on the role of hate-figure to Russia and China, as the two nations the Muslim world loves to loathe. The US is the good guy now, after donkey’s years of being the Great Satan. It has isolated Russia and China, and the Russian Foreign Minister is now buzzing around the Middle East like a blue-arsed fly to try to undo some of the damage. Too late!

It is also a triumph for Hillary. Criticised for being too low-profile, she has been quietly beavering away to ensure that the image and reputation of the US is improved, and that its voice is one more respected internationally, after the dreadful damage wreaked by Dubya.

One consequence is that the Obama administration has an 80% approval rating in the West.

He must wish he had the same in the US!

Big bangs in Bangkok!

The bombs in Bangkok are redolent of the glory days of the IRA; the sheer incompetence is breath-taking. The first of the gang had his collar felt within a few days of arriving. You can be sure that the Thai Police have been applying some gentle persuasion. A huge cache of chemicals for making explosives was discovered shortly afterwards. It was grossly excessive for bomb-making unless they intended to frag the whole of the city, and almost impossible to conceal for long.

The remainder of the gang managed to blow up the house where they were making their bombs. One was left legless when he threw a bomb at a taxi that bounced off a pick-up truck and came straight back at him, one was nicked at the airport, and it seems that one is still AWOL, although it shouldn’t take too long to pick him up (or her; there were reports of a woman living in their rented – now roofless - house).

The puzzle is how they managed to get into Thailand in the first place; who granted their visas? Could this be a brown envelope job?

It seems pretty obvious that Iran was at the back of it all, including the bombs in India and Georgia. The mullahs must know that they are putting Iran in the cross-hairs of the Israelis, so why invite the retaliation that must soon come?

Is it purely a coincidence that the opposition in Iran has just held its first big rally since the leaders were put under house arrest last year? If so, is the reason for the attacks to divert attention from troubles at home?

Colonial regression.........

Here is the riposte from Haymaker Texas to ' Sex, religion and politics' .

Your impassioned comments about what is wrong with America certainly hit home. And your conclusion that US politics is nuts is right on the mark. Sadly, US politics, like the US media, is but a reflection of the American people. One day, we shall grow up and mature. In the mean time, we are compelled to live with out foibles.

One might bear in mind, however, that the American psyche developed largely from Anglo-Saxon sources. Why then, are we so different from our ancestral predecessors? The answer, I argue, has to do with colonial retrogression. There are several examples of emigrating Brits and Europeans who sailed abroad, established colonies and became entrenched in the culture, language, society and religion of their forefathers back home. Consider the French Canadians who speak French that is more akin to the 17 century than it is to contemporary France. Or the professional Scots in New Zealand who, like their brothers elsewhere outside of Scotland, are bound and determine to be more Scottish than homeland Scots. Another example is the Boers in South Africa who retained 17th century Protestant ethics and values that are currently difficult to find in The Netherlands.

The Australians have a congenital disrespect for authority and employ profanity as if it were a virtue. Is that surprising considering their criminal origins? And how about America and our strict Protestant ethics fostered, among others, by the Pilgrims, Quakers, Methodists and Presbyterians, not to mention the CofE. We, like other colonials, tended to freeze the mold and adhered to beliefs and behaviors that our forefathers outgrew and then moved on.

Whether colonial retrogression is a good explanation or not, it does not alter our prevailing existential situation which you so eloquently described. While I may not agree entirely with your perspective, there is enough truth in your comments to make your point and then some. As for biblical references to birth control and abortion, you should go back to bible school. Remember the caution about not spilling one's seed on the ground? That mandate applies equally to Christians, Jews and Muslims and is retained in all their holy books. As for abortion, how about the mandate that goes something like thou shalt not kill.

To be sure these biblical references have been tortured along the way and better suit organized religion's need for control than man's need for salvation. Nor did the authors of organized religion know much about biology and anatomy. While men may be guilty of spreading their seed all over this good earth, the same does not apply to women following similar practices. First of all women have no seeds and secondly they do not drop an egg when indulging in non-reproductive sexual sport. One might conclude that women are given a pass on this mandate.

My years in the UK and Europe and the many more years abroad have acted to remove me from the religious stupor in which large numbers of Americans thrive. This stupor is particularly contagious among rural folk and disgustingly so in the South. Texas includes the latter as we are largely influenced by southern mores and values even though Western Texas is considered more Southwestern than Southern. Most of our gun toting, hot blooded cowboys observed Sunday prayers after a night of drinking, gambling and a trip over to Rosy's. 

As far as finding socialism and its even more diabolic cousin, communism are concerned, we are victims of political propaganda. The powers that prevailed at various times in our more recent history, in this case the rich, used their political minions to promote capitalism and denigrate socialism. In addition, many American, and indeed British and Continental, observers viewed socialism as the equal distribution of poverty and as inconsistent with man's competitive nature. Give a man a fish and he will die of hunger but give a man a fishing lesson and he will survive sort of thing. Nor did we find the standards of living that prevailed in socialist countries high enough to meet our aspirations.

Then came immigrants prior to WWII and with them Italian and Jewish Communists. Neither were accepted and both abandoned their political convictions in rapid order. Nevertheless, the perceived threat they posed by the time Stalin came to power and during China's transition to Communism leant fodder to the human and political transgressions characterized by Senator Joe McCarthy and what we call the McCarthy era. What a nightmare that was, but Joe and his supporters were unashamedly used by the super rich, including a handfull of Texas oilmen. to brutally combat Communism while promoting the glories of Christianity.

We still need a lot of maturing, but for the time being, we find it convenient to tolerate the Evangelicals and cheerleaders for Christianity in spite of their blissful ignorance, intolerance and of course, their hypocrisy. Americans are suckers for a good preacher and will follow them without checking their religious or personal credentials. As I say, we have some growing up to do.

Foreign aid: too many cooks?

Some time ago, there was a good piece about the recurring famine situation in East Africa which generated a certain amount of debate on foreign aid programmes.

I have just pulled the following out of my archives. I am not the author and I forget where it came from – probably the Economist. Anyway, for those of you interested in the topic, here it is.

‘THE development-aid business is a shambles. The main problem is not the one poor countries and NGOs usually complain about: too little aid. In fact, official development assistance has been rising modestly since the mid-1990s, in real terms and as a share of donors’ national incomes. Rather, the problem is that aid is fragmenting: there are too many agencies, financing too many small projects, using too many different procedures.

Little Eritrea, for instance, deals with 21 official and multilateral donors, each with their own projects, budgets and ways of operating. Uganda has 27. That is normal. 38 poor countries each had 25 or more official donors working in them in 2006. The number of aid projects financed by bilateral donors has skyrocketed from 10,000 to 80,000 over the past ten years.

NGOs are more numerous. Their explosive growth explains much of aid’s fragmentation. The UN reckoned there were 37,000 international NGOs in 2000, a fifth of which had been formed in the 1990s. There are almost certainly more now. Ethiopia plays host to 12 affiliates from Save the Children, seven from Oxfam and six from Care International. NGOs are increasingly important to the aid business. By one estimate, they spent $27 billion of aid in 2005, compared with total official assistance of $84 billion. The Gates Foundation had a budget of $3.3 billion in 2007—more than Norway, Denmark or Australia spend.

This largesse is evidence of western generosity. But it is swamping poor countries: donors conducted over 15,000 missions in 54 recipient countries last year. Vietnam played host to an average of three visits each working day. So did Tanzania, whose overstretched civil service produces 2,400 quarterly reports on projects a year. Health workers in several African countries say they are so busy meeting western delegates that they can only do their proper jobs—vaccinations, maternal care—in the evening.

The Paris declaration of 2005 laid down a number of principles for making aid work better, and drew up specific targets which donors and recipients are supposed to meet by 2010.

Some of the targets are sensible and even stand a chance of being hit. It is obvious that aid should help recipient countries but that idea is forgotten when donors ring-fence their projects, using their own experts (not local people) to build, run and evaluate operations. The Paris declaration aims to cut the use of such parallel systems dramatically. Between 2005 and 2007, their number did indeed fall, by about 10% in 33 countries. But big problems remain. In Mozambique, donors are spending a staggering $350m a year on 3,500 technical consultants, enough to hire 400,000 local civil servants

Similarly, it may seem obvious that flows of aid should be recorded, so recipients can know what they are getting, and scrutinise it. But in practice this does not happen. One can measure how much aid is recorded accurately and the share has risen from 42% in 2005 to 48% in 2007 (ie, only 48% of aid is properly accounted for). Again, an improvement, but still a far cry from the target, which is 85% accuracy.

But the biggest problem is too many aid agencies, and the challenge is co-ordinating them. In practice, national, multilateral and NGO donors probably can’t do more themselves than they do anyway, so the best way of coping with the fragmentation of aid is for recipient countries to lay down a set of national development priorities and ask donors to fit in with their plans. That sounds fine in theory, but if recipients were serious about it they would be expected to be saying no to offers of aid that don’t fit in with their plans. That hardly ever happens. The Paris target is for three-quarters of recipient governments to publish development programmes that aid agencies can use. Last year, according to a survey on monitoring the Paris declaration, only a fifth did. Unless that improves, aid is likely to remain badly fragmented’.

Sex, religion & politicians.

The stuff about religion and sex being peddled in the primaries convinces me that US politics is nuts.

The issues of abortion and birth control have not been issues for 50 years in the remainder of the civilised world. America is facing a major economic crisis which although improving is not taking the US out of the woods anytime soon. There is a major security threat in the Middle East from Syria, Iran and Israel; there are enormous issues of defence and foreign policy; the Wall Street corruption has not been tackled; the housing market is on the bones of its arse.

I could go on.

So why are men still wittering on about something that is not their business?

What position do men have on issues that do not affect them personally? Why do they believe that they are at liberty to impregnate a woman and then deny her the freedom to decide what to do about the consequences?

What makes celibate priests imagine that they have any locus whatsoever? Come to that, what makes the Catholic Church believe that it has any moral standing whatsoever in sexual issues, given its long-standing record of the worst kind of moral turpitude?

By what right in a secular state – protected by the Constitution – does a politician foist his personal religious convictions on the electorate?

Why are the Churches up in arms about ‘gay marriage’, a contradiction in terms if ever there was, when it is such a tiny minority issue and which seems  to be principally aimed at giving ‘civil partnerships’ the same succession and inheritance rights as conventional marriage? (In the UK the C of E seems to think of little else but gays and women; sex mad, that’s what they are!).

And where in the Scriptures is there any reference to either birth control or abortion? Is not the real purpose of the Catholic policy to ensure that Catholics out-breed the rest of us?

Much of America seems obsessed with the threat of ‘socialism’.

Is not the greatest threat to society the malign influence of religion in all its most intolerant forms? And by what logic do the religiosi criticise the stranglehold of Islam on Arab society when they propagate much the same?

And why do (male) Republican candidates feel that these are key political issues – or political issues at all, for that matter

In ‘Freakonomics’, the authors make a direct link between abortion, birth control and the fall in the crime rate of black Americans. The reason is that black women are less prone to depositing fatherless children upon society and thus breeding the next generation of delinquents.

Fortunately, this Sanatorium fellow has no more chance of becoming POTUS than I have. Or is this wishful thinking? After all, if the American electorate can prefer Dubya to McCain they are capable of any foolishness.

Sex and the Republicans...

All of a sudden, Rick Santorum sweeps Colorado, Minnesota and Missouri in the campaign for GOP presidential nomination. Rick, who speaks as if he is either euphoric or in agony, and is squeaky clean, was almost forgotten owing to his poor showing in previous significant primaries. Romney fell about the same distance that Santorum gained. Pundits attribute this to various factors.

The states in question are so called heartland states. They adhere to base Christian values best expressed among the candidates by Santorum. No abortion, no birth control, no sterilization, hawkish, balanced budget; in short a social and fiscal conservative.

Romney failed to capture the imagination of the heartland. He is dull, boring, cold, and has difficulty exciting the electorate. No mention of his being a Mormon, but he has embraced birth control and abortion in the past.

Another reason is possibly the cause, but much more interesting. It has to do with a feature of Obama care. According to the latest health plan,  female employees are granted through obligatory employment insurance, access to birth control devices, abortions and related population control procedures. This entitlement has just been digested to the point where the Catholic church and other conservative religious groups are calling foul. As employers, these institutions are obligated to include in their employee insurance programs all the above mentioned entitlements, even though they are against them as principles of their faith. American bishops are up in arms and have not hesitated to say so from their pulpits. They argue against these birth control devices on moral grounds and are adamant that such entitlements should not be made obligatory for their catholic as well as their non-catholic female employees. You are undoubtedly aware that the Catholic church is a major US employer owning primary, secondary and tertiary educational institutions, hospitals, charities and other service organizations.

Obama, through Kathleen Sebelius, the Secretary of Health and Human Services, has stepped right into the poo. Religious conservatives, evangelicals and Americas 70 odd million Catholics are up in arms, even those who practice birth control. As a concession, Obama has granted a year's grace before the law comes into effect. This was done partly to seek out a means of accommodating the religious conservatives, but makes no promises about voiding or amending the law.

Enter Rick Santorum, the Holy Ghost incarnate, a practicing Catholic with umpteen kids. Some say the subject law played into his hands given his staunch anti abortion etc. position. I think this is unlikely as the realization and media attention over the law was far to recent for it to be digested by the heartland masses and converted into votes.

My take is that Romney remains the most likely candidate to win the GOP nomination. This is not to ignore this much loss of face and momentum resulting from the heartland elections. Colorado was a particularly hard loss for Mitt to swallow as he won the state in the last election. Of the three, Colorado is the most important, but does not compare with the big population states like California, Ohio, New York and others.

The Japanese enigma......

Being once again inundated with Japanese totty my thoughts naturally turned to the great enigma of the Japanese economy.

The doomsayers are out again in force, crying ‘Woe, woe, Japan has a balance of trade deficit, the first time in 31 years!’

Eh?

The UK seems to have a semi-permanent trade deficit, but it’s still there. Remember when ‘balance of payments’ was the weekly shock-horror story? Whatever happened to it?

The Japanese economy tanked more than 20 years ago. The stock market crashed and property prices went south so far that they have never recovered. And yet Japan remains the world’s 3^rd largest economy.

In fact, the economy has done very well in the last 20 years. True, property prices have never returned to their 1990 levels but the bubble was outrageously large; I seem to recall that the site of the British Embassy in Tokyo was the most valuable piece of real-estate in the world.

So I looked a few measures of Japanese success.

During this period life expectancy has grown by 4.2 years to 83 from 79. This is not due to healthier eating habits. If anything, the Japanese are adopting the unhealthy diet of the West. It is almost certainly down to improved health-care.

It has vastly improved its internet structure; it is reckoned that of the 50 cities with the fastest internet service, 38 are in Japan (and only 3 in the US).

The yen has risen 87% against the USD and 94% against the £. It has also risen against the Swiss franc.

The unemployment rate is 4.2%, about half that of the US.

Japan has a current account surplus of $196 billion; The US has a deficit of $471 billion at the last count.

Yesteryear the received wisdom was that the rise of China would be to the detriment of Japan. It turns out that Japan’s exports have increased by a factor of 14 over the period, and bilateral trade is more or less in balance.

Infrastructure in the US is a mess, with decaying airports, collapsing bridges, badly-maintained roads, whereas Japan has made major improvements and investments in these areas.

So how do the boring statistics translate into quality of life?

Well, Mercedes, Porsche, Audis, Ferraris etc sell well in Japan. Tokyo has 16 of the Michelin guide top restaurants against only 10 in Paris. The Japanese are amongst the top buyers of cutting-edge high tech gizmos. They don’t seem to be doing too badly.

Another rarely-used yardstick of prosperity is electricity consumption. Since Japan became a basket case more than 20 years ago, this has increased at twice the US rate per capita.

But already we have voices saying that China is going to get its comeuppance ‘just like Japan’.

Some comeuppance!

By the way, the main reason for the balance of payments deficit is the importation of fuel to offset the loss of nuclear power after the tsunami, a temporary problem.