Knifonomics (part 35): a lesson in interpretation

This post is not party political. Instead, it is intended to illustrate (and very nicely), how different interpretations of history make a big difference to the lessons that we take from events, in this case matters of national financial health. It’s from this weekend’s FT, and is a letter by Phillip Oppenheim. Expect to hear more on this theme of ‘why can’t we be more like Norway’, when shale gas takes off. Economics truly is a “dismal science”:

Sir, Misha Glenny’s assertion that under Margaret Thatcher, Britain decided “to fritter away” its oil revenues “in a binge of tax cuts”, in contrast to Norway’s prudent policy of squirrelling away their revenue in a sovereign wealth fund, has become common currency, rarely backed by figures – it’s time it was challenged. (“In shale, Britain has a second chance to mend its fortunes”, January 18.)

Some facts: UK oil revenues in the 1980s: £166bn real terms – population 56m. Norway’s oil revenues over the past 10 years: £210bn – population 4.9m.

You do the maths, as they say, but I make it that UK per capita oil revenues at their peak were only around 7 per cent of Norway’s. Indeed, Norway’s oil fund was founded in 1996 in part because the income per capita was so massive that the economy would have overheated if the revenue had been kept in Norway. Oh happy, small country!

Factor in the small matter that Mrs Thatcher inherited an economy seemingly in terminal decline, with a serious national debt and penal tax rates in the midst of the cold war – at a time when no one had heard of sovereign wealth funds – and the picture alters some more.

Mrs Thatcher’s policies also included growing the economy by reducing direct tax. True, UK manufacturing went into sharp decline during the early 1980s – partly due to sterling’s oil-related rise. But output, including manufacturing, rose sharply from 1985 and ended the period substantially up – in contrast to the record of the previous or subsequent Labour governments, both of which saw a fall in manufacturing. So perhaps it worked.

Many also ignore the fact that not all oil revenues went into tax cuts. Public spending also rose substantially in reals term under Mrs Thatcher, though not as a percentage of gross domestic product.

The government of 1979-97 made mistakes, but I’m not sure that setting up a sovereign oil fund, which invested among other things in shopping malls and distressed debt – as Norway’s fund has – would have been better than putting the money into the NHS and people’s pockets.

 

Norway...not really like Britain
Norway…not really like Britain

 

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Lockerbie, Lockerbie, Lockerbie

(thanks to Rikki Brown)

Well…it’s three weeks since CNN said Abdelbaset Ali Megrahi was at death’s door, in a coma. It’s two weeks since the BBC also visited his house to be shown the bomber in bed, although not necessarily in a coma. It’s about seven weeks since the liberated Libyan was filmed out and about at a rally in Tripoli. It’s an amazing 9 months since  our elusive friend’s situation  was reported as follows:

The freed mass murderer, 58, was on life support after slipping into a coma about a week ago.

A source close to the convicted killer’s family confirmed Megrahi, who has terminal prostate cancer, had been unable to talk for several weeks.

Last night his family were said to be at his bedside.

The source said: “Many people have been waiting for him to die. That day is coming very soon.

“He is on life support and has been for some days.

“Every day his loved ones expect it to be his last.”

Quite remarkable. Either Libya has a uniquely therapeutic climate – unlikely – or someone has been lying to us.  Normally one might suspect the dead hand of Alastair Campbell, but we already know one of the chancers involved, Professor Karol Sikora:

Cancer specialist Professor Sikora, who assessed the 58-year-old, admitted in comments published yesterday that it was ’embarrassing’ that Megrahi has lived much longer than expected.

He told the Sunday Times: ‘There was always a chance he could live for ten years, 20 years . . . But it’s very unusual.’ And he admitted: ‘It was clear that three months was what they were aiming for. Three months was the critical point.

‘On the balance of probabilities, I felt I could sort of justify (that).’

He denied he came any under pressure to deliver the diagnosis, but admitted: ‘It is embarrassing that he’s gone on for so long.’ 

The thing is, Sikora is an expert. His CV is superb. The charitable explanation is that he was just wrong, but as a medic with clinical knowledge I would suggest that Sikora has been found out – he gave a dodgy prognosis with either a carrot or stick to spur him on. I wonder what exactly. It’s not as if Megrahi’s release hasn’t caused a huge amount of genuine distress and political damage. It was always going to.
As previously stated on this blog, I’m not after Megrahi’s death. I am after the people who freely lied and deceived to get him out. To our great shame, they weren’t Libyans.
The Knife very much hopes that the disgrace and rancour this has brought on the UK, and Scotland in particular, will one day come back to haunt the overrated (and cocky) Scottish fuhrer, the man whom Kelvin Mackenzie amusingly calls “that great tub of Scottish lard”.
Justice has not been done, and it’s not been seen to be done either.
For Alex, Kenny, Tony and Jack...
* The most accurate reporting of the whole SNP/Lockerbie disaster is here

The Morality of Tony Blair

Hey guys! I mean, well...gotta do something...pretty straight....right thing to do....peace in our time...(ad nauseam).

Sometimes you see the killer fact, the summary phrase, sitting there, unexpected and unadorned. Here it is, by Charles Moore in one of several excellent recent pieces on the costs of the UK “climate change” legislation:

“The problem is made worse by the fact that Britain’s targets are more stretching than those of any other country. In one of his last acts as prime minister, Tony Blair defied his official advice and signed up to them, in order to prove how virtuous he was. The estimated bill for that man’s moral vanity is a capital cost of £100 billion by the end of the decade.”

Aah yes, there it is, Tony Blair’s “moral vanity”.

Beautiful.

One of the many reasons why, incredible though it may seem, Tony was an even worse prime minister that the utterly useless and malign Gordon Brown. Quite an achievement.

A wimpy sort of Armageddon

The army of environmental catastrophists will be shattered.  To quote myself from June of last year:

“BP may be getting slated at the moment, partly as a scapegoat for “heartbroken” Barack Obama, but….

 no-one else has ever dealt with anything like this, and I reckon that they will succeed in capping the leak soon, getting huge kudos for solving such a problem, in the long run

also…

I predict that there will be no horrendous environmental catastrophe, oil-soaked beaches etc, at least not in any major way. The slick will be dispersed”

Just to back it up, here is a very balanced take on all this from the Independent recently. Obama should be reminded of his hysterical lashing out on this topic, done solely because at the time it was politically expedient for him. Now he just looks foolish.

Quite correctly the Indy aricle briefly mentions, that like Fukushima,  the tragedy here is not environmental, it is human,  primarily the deaths of the oilworkers involved.

As usual, the mad climatechangeglobalwarmingenvironmentaldisaster lobby can’t get too worked up about actual deaths. Nevertheless, an apology would be nice.

So steady as you goGaia is just fine.

Hang on lads...false alarm!

I don’t want to bore, but…

…more news from the Gulf of Mexico. From the Guardian, who must be feeling a little confused about all this. Firstly, old fogey Alexander Chancellor, on the environmental stuff:

“The news from the Gulf of Mexico gets better and better. Not only has most of the oil vanished, but it is even being claimed that the Deepwater Horizon explosion may, in fact, have caused the fish population to rise. According to experts in marine biology, the oil has killed fewer fish than the fishermen would have done if they had been allowed to work. There is no evidence of oil contamination in fish samples, and it is predicted that fish will now be bigger than before because they have been allowed to develop unmolested. So much for the greatest environmental disaster ever.”

Nope…can’t see any oil…

And in the editorial, Barack criticised!!!!

“In the battle between BP and the most powerful government in the world, who was being dwarfed by whom? A multinational, a creature par excellence of neoliberal globalisation, was not too big to fail, but too big to control when it did. When the Kursk went down, Vladimir Putin found he did not have a deep-sea diving team capable of rescuing his submariners. They had all gone to Gazprom. The disaster was too big for a weakened state to handle. Mr Obama found himself in a similar position with BP. For all the posturing by the head of the government’s response team, retired coastguard admiral Thad Allen, and his claims to have seized ownership of the operation to cap the well, it was always a BP operation. No one else had the technology, or the knowhow, to do it. This should make Mr Obama more cautious before he presses the restart button on offshore drilling. But somehow one feels that it won’t.”

Although naturally, they come to the refreshingly wrong conclusion (last two sentences).

The Knife doesn’t wish to claim mysterious powers of prophecy, but 8 weeks ago……



Not so troubled waters…

News from the Mexican Gulf. To no-one’s amazement, particularly The Knife, nature has begun to sort things fairly effectively:

“Oil from BP’s damaged Gulf of Mexico well is clearing from the sea surface faster than expected, scientists say, 100 days after the disaster began.

Jane Lubchenco, head of the National Oceanic and Atmospheric Administration, said much oil had been “biodegraded by naturally occurring bacteria”……..The US incident commander, retired Coast Guard Adm Thad Allen, said oil skimming crews were having trouble finding oil to clean up…”

This is not necessarily good news for the beleaguered Barack.

Note that it was BP who actually capped the well. New chief exec, latest trading figures not too bad considering….

Get Hayward his job back...I need someone to kick


Troubled waters

BP may be getting slated at the moment, partly as a scapegoat for “heartbroken” Barack Obama, but….

no-one else has ever dealt with anything like this, and I reckon that they will succeed in capping the leak soon, getting huge kudos for solving such a problem, in the long run

also…

I predict that there will be no horrendous environmental catastrophe, oil-soaked beaches etc, at least not in any major way. The slick will be dispersed

Good time to buy BP shares, possibly

This is my best side..