Rolled-up Trousers

Risk and Reward

German Chancellor, Angela Merkal:

"Have politicians got the courage to make those who earn money share in the risk as well? Or is dealing in government debt the only business in the world economy that involves no risk?"

This was said to the German Parliament in response to the situation in Ireland where they are bending over backwards to meet the demands of the state's debtholders. The Irish people are the ones suffering in order to do this. Merkel raises the point that these bondholders should accept they took a risk and can't always expect to get their money back with profit.

This basic principle of risk and reward should also apply to banking. The higher the risks, the greater the reward. Banks have made catastrophic financial losses, resulting in massive bailouts by taxpayers. These taxpayers are the same ones who hold accounts with these banks. The banks resolutely oppose any separation between this everyday banking and their casino-style trading. In the boom years, bankers walked away with billions leveraging on this money, while account holders received nominal rates of interest in return.

Post-bailouts, bonuses are back to what they were while ordinary people pickup the previous bill, never mind get a share of any money being made now. It is arguable that bank account holders haven't really entered a risky arrangement given that their investments come with a state guarantee. However, we know that the speculative activities of banks also come with a state guarantee - to answer Merkel's question, the answer is "no" as international bankers are in the same boat. They are also often holders of government debt, while being backed by governments. It's an almighty mess.

So who is risking anything here, and so who should get the reward?

A foreign policy for Scotland

I've got a guest post at Bella Caledonia containing my speech to the Scottish Independence Convention from a few weeks ago. Go here.

If bank bonuses had been 20% less over last 10 years, they would have had enough liquidity not to need a bailout

The above was said by WSJ journalist Scott Patterson on Jon Stewart's Daily show on 5th March (not viewable outside the US) this year. It was not something the conversation dwelled upon despite how significant a statement it was. There may be more in his book The Quants.

I recalled it when reading Robert Peston's blog today. He said:

Research by the Bank of England shows that if banks reduced the proportion of their revenues that they pay out in pay and bonuses back to what it was in 2005 (which was a pretty good year for the banks), they would free up £10bn - which could be used to strengthen themselves by retaining it as capital (which is what the Bank of England and FSA would prefer) or to pay higher dividends.

To put it another way, the failure of the owners to insist that this £10bn be deployed to reinforce the foundations of their banks or provide an income to them is one of the great mysteries of our time.

I'd be grateful if anyone can direct me to this Bank of England report as I can't find it. Thank you to anyone that can assist.

Red refs call strike

The spark the lit the Scottish referee saga is a bit lame. Referee awards penalty and instantly realises he’s made a mistake. To save face he pretends to have a conversation with one of his assistants and uses it as the pretext to reverse his decision. In the end, the result was correct. As scandals go, it’s hardly Calciopoli.

Since then we’ve had this drawn out in the media for six weeks. Now referees are going on strike because of the refusal of people to let this go. The final straw appears to have been Celtic chairman John Reid’s intervention last Thursday to call for the head of the lying referee – yes John Reid talking about someone else’s lies. No one died or was tortured thanks to Dougie MacDonald.

The SFA are said to be exploring flying in foreign referees this weekend so that games can go ahead. I hope they’ve given due consideration about whether these scabs will come from protestant or catholic majority countries.

Whether or not the strike goes ahead, there doesn’t seem to be a lot of contrition or lessons being taken on board. We’ve had ex-refs telling the public about the abuse and hostility they’ve faced. I fear if it will take a very serious incident before the game which is full of whinging John McEnroes takes note.

BBC and rightwing thinktank work together on Muslim school documentary

It’s been a while since John Ware last produced a documentary containing allegations of extremism. Given the disaster of the last one, that is not surprising. The genesis of that was Israeli military and security service sources. This time there seems to be a collaboration with a discredited London thinktank.

It may be pure coincidence that the same day that Ware’s documentary on Muslim schools aired, Policy Exchange’s released a report on the same topic. It would be good to get clarity on the relationship between the documentary maker and the think tank. Readers may recall that PX were the outfit that forged receipts to show that they purchased extremist literature from Muslim bookshops. To date, no explanation has been offered as to why they would feel the need to do such a thing.

Their latest report doesn’t engage or spend money on such extensive fieldwork this time. Instead, they appear to have left that to Ware and the BBC. The broadcast included interviews with Neal Robinson and John Bald, both authors of the PX report. It also extensively featured Michael Gove, currently Education secretary, who was formerly chairman of PX.

My wish here is not to whitewash the state of Muslim education. There were serious as well as superfluous issues raised by Ware. Textbooks shouldn’t contain details about amputations and speak in derogatory and discriminatory terms about other faiths. It is scarcely believable that this is happening, that so many parents aren’t bothered about it, and that even after so many years of scathing public scrutiny there are still people running Muslim institutions that haven’t got their house in order. It is high time that they joined the real world.

My disappointment is that he didn’t get to the heart of the issues and instead engaged in sensationalism. This isn’t surprising as Ware and PX are obsessed with extremism and presenting stories of it to the public. Witness the time devoted to a preacher who appeared at a school fundraiser who said something objectionable separately somewhere else. Ware and PX do not have the welfare of young Muslims anywhere on their minds, and therefore actually effectively dealing with the problems that exist.

It wasn’t mentioned by Ware, but young Muslims are more likely to leave school without qualifications, more likely to be unemployed, less likely to go onto higher education, more likely to be unemployed and more likely to be in prison than the general population. Educationalists say that the stress of additional evening and weekend Islamic schools does not help and may make things worse. After coming home from school, attending the mosque for hours in an often repetitive and uninspiring environment adds stress and leaves little time for homework or play.

I once heard a Glasgow imam openly speak about the effect of the madrassahs. He said that if you totalled up the two hours a day, this amounted to ten hours a week, 500 hours a year and over the course of ten years 5,000 hours. If you saw a product of this system though, then they wouldn’t be any better off than someone who hadn’t done it.

The system is crying out for a radical overhaul. Currently they are run largely by unqualified teachers operating off a poor or non-existent syllabus. Arguably most Muslim boys attend these madrassahs. There is then a real opportunity to lift attainment by investing in these institutions. Let’s make these classes a more rounded experience, including assisting with mainstream education. Add in a little sport and citizenship and you have real wholesome and beneficial proposition.

None of these big issues were addressed in Ware’s documentary. Ironically, earlier this year he accused the controller of BBC1 of being as “shallow as a paddling pool” upon hearing more “depth” was asked for from Panorama.

Changing the Celtic Tiger’s stripes

There are a number of mistakes cited as to why Ireland has arrived at the point of taking a massive external bailout, from being a member of the Eurozone to the massive debt property bubble built up in the last decade. None of the commentary however cites its departure from the United Kingdom as the source. No one is saying a condition of the money now is that it needs to rejoin either. This is the normality of independence, and when Scotland gets it, no one will look back either.

After announcing the money, Chancellor George Osborne said Ireland "were a friend in need" and did not add that the bailout was necessary due to Ireland’s independence. This was in contrast to former PM Gordon Brown, who was quick after the bailout of RBS and HBOS in 2008 to say that an independent Scotland would not have been able to take the action that he had. Debatable sure, but if we are going to engage in pure speculation, it is also clear today that that had Ireland been part of the UK, the exchequer would not have been able to mount the rescue which has just happened by themselves. We live in an interdependent Europe and interconnected world – Scotland’s future doesn’t depend on London.

The UK banks may need another bailout next year. That is what the £7bn UK contribution is all about given the exposure of UK banks in Ireland. It is also a proportionally modest contribution in terms of the overall £70bn package. 2011 is going to be the high water mark for capital hungry UK banks that need to find £250bn in that period. If they don’t manage it we could be looking at Bailout II. There is no guarantee the UK will be able to raise the money. The Tories spent the general election year talking up a market attack on the UK. And remember in 2009 the worried Labour government were saying IMF bailouts were “like getting wellbeing care or even like going to a spa to recuperate”. Or maybe Norway would help us out.

What Ireland has got now is a loan at a reasonable rate of interest. This money would not have been otherwise available at that price because “the markets” have decided that Ireland should be charged more. The price went up after the country announced harsh austerity measures – at the behest of said markets who then decided that austerity meant low growth and higher risk on the debt.

Ireland’s mistakes were Ireland’s to make, just as Norway’s success has been their own. It’s what is done with political power that matters. We can never know what economic policies Holyrood prime ministers would have pursued over the last few decades had we been independent. What matters now is that if we are to depart a bankrupt Britain, it can’t just be an opportunity to escape the cuts, get the investment in jobs and infrastructure that is needed, and go back to how things were done but with kilts on.

A new kind of economy has to be built on social democratic lines with environment at its core. The current crisis has led us all to seek answers, and there is much discussion still to be had about what the priorities and hallmarks of a new economy should be.

Will the Daily Star accuse Jews of hijacking Christmas?

The Daily Star have had a whinge about lights celebrating Eid being up alongside Christmas ones, even though Eid was over and done with last week. Council bosses in Rochdale are reportedly keeping them up to display diversity.

To be honest, as a Muslim I'd be slightly embarrassed to see them up there in my city. Still, I don't think it's cause for headline news of the "CHRISTMAS IS HIJACKED BY MUSLIMS AND HINDUS" variety.

Islamophobia Watch then manage to expand the Daily Star's above picture to show this:

The Star of David is up no doubt with Hanukkah falling 2-9 December. But if the lights are still up on 11 December, are Jews going to be accused of hijacking Christmas by the Daily Star? Of course not, and nor should they. But it's the latest example of how discourse about Muslims in the tabloid press would not be acceptable about other groups. Hope not Hate have started a campaign against the Daily Star today.

Amusingly, even the Daily Star describe their stories as "News" with inverted commas (click image on right and look at red section at the bottom).

We're probably now in for the tabloid season of badwill stories about how Muslims are offended by Christmas and want to take it over. Father Christmas to be renamed Abu Eid, red suit to be swapped for a long black robe, but long beard to be maintained. And everyone to tuck into Turkey that has been "ritually slaughtered" but not electrocuted.

May I take this opportunity to wish everyone Merry Christmas and Happy Hanukkah!

Yellow Water, the Lib Dems, and raising tuition fees

During this year's general election campaign I was very pleased to sign the NUS pledge to oppose any increase in tuition fees should I have been elected.

Every SNP candidate did likewise, as did many Labour ones, and every single Scottish Lib Dem. Lib Dems now appear on the news though and say things like "We didn't make a promise, we made a commitment in our manifesto", as Vince Cable did at the weekend. This pledge though is not a party political issue to hide behind. 

This pledge that individual candidates signed with the NUS was a personal promise by would-be MPs to vote against any increase. It said "I pledge..." not "We pledge...", or even "Our manifesto says if there is the miracle of us forming a majority Lib Dem government...".

MPs who want to impose spiralling tuition fees on today's students, after benefitting themselves from free university, should do the decent thing and voluntarily cough up for their degree. Three years at £9,000 from around 325 MPs will add the best part of £9m for public funds. It'll show them putting their money where their mouths are, and for once have MPs doing as they say others should.

The NUS are looking into using powers of recall to force out reneging MPs. They should use all legal means at their disposal. I don't know if signing this pledge constitutes any form of a contract, but morally at least we now know they had no intention of fighting for the policy when it came to negotiations with the Tories. They would secure a deal for part-time students, and "leave the rest", which would maintain "clear yellow water" between them, Labour and the Tories.

The coalition are keen on using household metaphors when it comes to the economy. That as the country is in debt, just like in ordinary homes in such a situation, belts should be tightened and swingeing savage cuts to expenditure should be made.

Except, the state is not subject to the same rules as homes. But let's accept the simile for a moment and turn it on its head. Coalition cuts are like breadwinners not going out to work because they've slashed their bus fare budget. We're not going to send the kids out to get educated now either. This is the harm that the Tories and Lib Dems are doing to us, their supposed family.

And if any Lib Dems are planning on talking about "yellow water" again any time soon, the public will bring to mind the age old advice to never eat yellow snow.

Making halal meat kosher

Muslims make up 3 per cent of the UK population, but consume 20% of all the red meat sold in the country.

I was extremely doubtful of the veracity of this stat, reading it for the first time as I did in one of our quality tabloids. All the recent controversies now suggest the figures may be accurate, but it’s not Muslims consuming all this halal meat.

We have to be grateful to the Daily Mail for providing an ever expending list of outlets that sell halal. This apparently includes Waitrose, Costa coffee, Wembley Stadium and some has even found its way into the supply chain at McDonald’s. The far-right EDL have been protesting outside of Kentucky Fried Chicken. If you fancy a flutter at Ascot, it’s on the menu there too.  It’s a sign of how Muslims have weaved their way into the fabric of the country.

The scare story goes that animals have been “ritually slaughtered” by Muslims. This sounds alarming, but is literally a two second prayer said by the slaughterman. If you don’t believe in God, the slaughterman could have been having chat with his workmates instead, or listening to Kylie on the wireless for all this matters.

What the Daily Mail’s meat McCarthyism has settled on as the issue is whether animals have been electrocuted before slaughter. It’ll be interesting to see if this hysteria plants itself in the minds of the British public who have used the word kosher, which has the same issue about stunning, as a byword in quality. However, the situation with halal is more complex than this - the RSPCA state that 90% of halal meat is actually stunned. That is not to say that there aren’t prominent Muslims denouncing this state of affairs and calling for more stun-free produce.

I believe the debate needs to move on a bit and recognise the nature of the industrial meat production that exists today. If we want to look at what Islamic teachings say, there is also the belief that an animal should not see another animal be killed. If you take away the slaughter conveyor belt which animals are hoarded on to, given the quantities of meat being consumed, guaranteeing a classical slaughter is going to drive up prices. Would the Muslim public be willing to pay? My guess is not.

There is a lot of obsessing by Muslims about the state of affairs at point of slaughter. We'll all have received the text messages about boycotting KFC, Nandos or some other outlet. There is though little or no thought about the welfare of animals during their lives. The conditions in which many animals exist should make everyone pause and think – if nothing else, it affects the quality of meat and poultry you are putting it in your body. The disingenuousness of the right-wing tabloids means we may not get week after week of scare stories about the lives of our chickens so that they can be sold at bargain basement prices, but this does nevertheless matter.

A great deal of halal meat is imported. While what is sold at butchers is generally slaughtered within the UK, I understand that the majority of meat used at restaurants and takeaways is shipped in from countries like Brazil and Thailand. This is a not inconsiderable carbon footprint and we need to question its necessity and desirability.

For the sake of our health and planet, we should be eating less meat. Five-a-day prayers accompanied by five-a-day fruit and veg?