State Capture

I first read about the term State Capture in 2016 in The Economist. It was referring to the state of South Africa under the seemingly serially corrupt Jacob Zuma. Many institutions were being undermined, and a particular family, the Gupta’s, seemed to have acquired covert control over many levers of power, that they were using to promote their own acquisition of power and wealth.

I don’t know a lot about Zuma and South Africa, but I guess I should celebrate that there has since been a handover of power in the ruling party, and that Zuma himself is subject to a number of court cases. Perhaps the Gupta’s will come under trial as well.

I found the State Capture term interesting, so I looked up its origin. According to Wikipedia, the World Bank first coined the term around 2000, referring to powerful individuals in the formerly communist countries comprising the Soviet Union. Subsequently, these individuals gave rise to another word that become common, Oligarchs.

The break up of the Soviet Union was a heady time. I will be forever grateful that I was given the job by Shell in 1993-94 that involved our retail market entry into those countries, which allowed me to visit many of them. The job taught me a lot about myself and about the world, and put me into contact with some inspirational young people. It might have been the most consequential job I did at Shell.

Those same times have given rise to a lot more newsprint in the last couple of weeks, following the death of George HW Bush. The period was indeed a political triumph for him, and we tend to forget now that a largely peaceful transition was far from certain, and a particular risk with nuclear weapons hanging around. The world was lucky to have Bush in power at the time. He received mixed support from his allies: it still amazes me how far on the wrong side of history that Margaret Thatcher was in not supporting the reunification of Germany.

But if that transition was a triumph politically, it was a disaster economically, at least to start with, and the blame for that lies squarely with the western economic establishment at the time.

The west had just embarked on what I call the Great Wrong Turning, under the leadership of Thatcher and Reagan, following the dogma of the Chicago School of economics. It was true that some correction had been necessary: powerful trade unions and anti-corporate states had stymied growth. Some privatisation was justified and even smart. But the dismantling of the welfare state and the unjust rewards to finance and corporations was both cruel and ultimately destructive, and of course this style of thinking still infests much of the world today.

Privatisation and deregulation made some sense in the US and UK because other state institutions were strong. It was fine for a private company, even a monopoly, to run major industries like telecoms and gas, because the terms of the sell off were transparent and because the state was able to retain some control through effective regulators. There were functioning markets to enable widespread private shareholding.

As the communist orbit collapsed, none of these safeguards were in place, yet advisors from the west still recommended the same approach. The result was inevitable – the original state capture. That error still plagues those economies and, more important, the ordinary people living in them, today. I saw the beginnings of it back in 1993. People had some notion of freedom, but that was a poor swap for weaker pensions, welfare, job security, education and healthcare.

Things have since improved in those same countries, because a market economy, even one run primarily for the benefit of a few criminals, is better than what came before. But that list of sacrifices arguably applies much more widely in the world today. Could it be that state capture has occurred in the west as well?

Wikipedia defines state capture as systemic political corruption enabling private interests to significantly influence the decision making of a state for their own advantage.  Is this a charge we can label in the US?

Look at the laws passed by congress over the last 30 years or so, and look at the acts of Republican administrations, most notably the current one, and the case can be made. The first spending bill I studied in any detail was in 2014, when Obama was president but when Republicans controlled both houses. I was stunned. Almost all of the beneficiaries were major private interests. The correlation between lobbying dollars spent in Washington and funding outcomes appeared almost complete. There was plenty of extra money and extra regulatory protection for armaments, fossil fuel energy, healthcare companies and finance, as well as for interests such as Envangelicals and Israel. Obama was talking a good game, and in places acting one too, but, perhaps hemmed in, the budget process was revealing something different.

Under the current administration it is much more brazen. All of the above areas have seen major rollbacks of former protections. The corporation is consistently valued ahead of the consumer. Perhaps the biggest lie among all the lies in 2016 was the promise to drain the swamp. In practice, the swamp has swallowed all before it.

This allocation of funds can be viewed in parallel with taxation policy, both federally and across many states. This has acted consistently to enlarge inequality, whether by making personal taxes more regressive, reducing taxes on corporations, reducing already tiny inheritance taxes, retaining egregious loopholes like carried interest, or, on the other side of the equation, cutting total taxation and hence reducing funds for items such as education and welfare.

The American people seem to have been victims of state capture as well, at least in outcome, since most have had to sacrifice pensions, welfare, job security, health care affordability and education quality, while a few private interests have benefited enormously. Luckily, advances such as technology and global supply chains have masked some of this by making everyone a bit richer – and please don’t tell me that the taxation or regulation policy has driven this. Every time I here talk of a billionaire I ask myself the question: what is enough? I can understand an answer of a million, even a few million, but several thousand million? Surely we are not allocating our riches in an equitable way?

If this would be state capture, how has this happened in a functioning democracy? I tried to answer this question by looking at it from the other side. If I were intent on state capture, how would I go about it?

I would lobby representatives intensely and rather covertly, giving them some kickbacks, maybe even personal ones. I would seek to make money a key determinant of political success, so these same representatives needed me more than they needed their constituents. I would gerrymander constituencies and suppress voting. I would pay for all sorts of spurious reports and provide lots of disingenuous talking points like “jobs” and “no new taxes”. I would support politicians who would allow me to follow this agenda while distracting some of the public with anti-immigrant dog whistles, militarism and social policy items like abortion and gun control. And I would seek to control the press and other media.

Oh look, I’ve just described the current Republican policy playbook. State capture perhaps? And before Democrats and non Americans get too smug, please note that many of the same sacrifices have been incurred elsewhere and under democratic socialist governments.

I wish everyone a blessed Christmas and peaceful 2019, and perhaps some momentum against this state capture. I realise that there is one major current topic that I have not found inspiration to blog about; the slow motion train wreck in my homeland that is Brexit. That could maybe be described as the opposite of state capture – something like wilful state surrender benefitting nobody. I’ll try to rectify that in January.      

Why Iran?

There is a drumbeat against Iran across the US establishment, led by the Trump administration but echoed across much of Congress. I have been asking myself the question: why?

I get little help by parsing the public statements of US officials. Various platitudinous phrases appear repeatedly. Iran is supposedly the world’s leading sponsor of state terrorism. Its regime is controlled by mullahs who undertake severe cruelty on their own people and are determined to destroy Israel and the US.

Let us try to understand these one by one. Terrorism is a hard word to define and is inevitably loaded. Most credibly, it can be defined as a tactic of violence intended to sow chaos (terror) among innocent citizens. If it is state sponsored, then that excludes small groups acting independently of a state.

By this definition ISIL and Al Qaeda are terrorists. But if they state sponsored, it is not by Iran, an overwhelmingly a Shia Muslim nation while both groups are promoting Sunni goals. We can argue that Saudi Arabia and Pakistan are sponsors, and also elements close to the state in Iraq and Syria, but not Iran.

When the US refers to terrorists sponsored by Iran, they usually mention Hezbollah in Lebanon and Syria, Hamas in Gaza, and the Houthi rebels in Yemen. I may be wrong, but I am not sure any of these qualify. The stated goal of Hezbollah is to defend Lebanon and Syria from Sunni Islamist forces. In Lebanon they have generally tried to promote prosperity rather than chaos. In Syria they have become participants in Assad’s civil war, but are not the main source of civilian terror. In Gaza, Hamas has been corrupt and incompetent, but it surely has the interest of its citizens at heart. In Yemen, the conflict started with blame on both sides, but the Saudi side has certainly been the one sowing most chaos among the innocent.

There are many egregious examples of state sponsored terrorism in the world, many perpetrated against domestic citizens. China has actively suppressed up to a million Uighurs. Russia has infiltrated Ukraine and other countries such as Moldova and Latvia. The CIA and Mossad are active in many places – how could the murder of nuclear scientists in Iran be classified other than state sponsored terrorism? Examples are plentiful in Africa. Iran is no paragon, but the claim that it is the leading proponent of state sponsored terrorism appears indefensible.

So what about the regime of mullahs and their destructive goals? Well, it is true that the supreme leader and revolutionary guard hold a lot of the real power in Iran. Executions are high in Iran (among other places) and surveillance pervasive. But their cruelty to their own people pales when compared with many other countries. Saudi Arabia has been trumpeting trivial reforms while executing its own journalist. North Korea is a gulag. China’s Uighurs, Myanmar’s Rohinga and even Australia’s aboriginals suffer more persecution than any Iranian. Iran has freer elections than almost anywhere in its region and something of an artistic culture. It even has freedom of religion and a somewhat thriving Jewish population. Arguably, the most cruelty is perpetrated by external sanctions. There are certainly stronger candidate nations for domestic cruelty.

Then there is the threat to the US and Israel. The threat to the US feels rather laughable. Since 9/11, there have been few credible attacks towards US soil, and, as far as I can establish, none from Iranian origin. There is a large and lawful Iranian diaspora in the US. Israel seems eminently capable of defending itself too, though Hamas and Hezbollah can be a nuisance. It is true that “death to America” can be heard on the streets, but that happens on the streets of many countries. You can argue that Iranians even have some cause to fear and hate America. The regime before 1979 was an American puppet, Iraq was supported against Iran in the war between them, and there have been many sanctions since.

So, on the surface, the claims against Iran seem to lack substance and it does not seem to justify its rogue nation status in the US. Of course, there could be lots of facts outside the public domain. But given the pathetic quality of the propaganda machine, I would need some convincing.

So there must be other reasons. I can think of a few.

Iran is the main hindrance to Israeli dominance of the region. It has the capacity to develop nuclear weapons (though it could argue that this is defensible given Israel’s one undeclared ones). But is Iran really a threat to Israel, or is it rather the other way around? Even the proxies seem to have a more defensive than aggressive intent.

Two possible reasons might explain the stance. One is evangelical. The Pence lobby can at times feel almost like old-school crusaders, promoting the Judeo-Christian tradition almost as a biblical right. Perhaps the singling out of Iran has a direct biblical root, since it was Babylon that perpetrated the original Jewish exile? It all feels distasteful and hypocritical in the modern age. The other reason is simply money. Pro-Israel groups are very active in political funding, and that certainly carries weight in the US.

Then there is the other rich player in the game, Saudi Arabia, a country whose regime feels more toxic than the Iranian one by most measures, and, by the way, the breeding group of Al Qaeda. The Saudis have their own long-term religious enmity with Iran as the respective homes of Sunni and Shia Islam. Oh, and deep pockets to buy weapons. Oh yes, and also plenty of oil.

I have another theory. We tend to think of nations as bureaucracies, but those bureaucracies are full of humans, and humans make enemies. A lot of this political stuff is personal. Putin hates the Clintons. It is the same in business. I made the mistake of using leverage at a moment of strength, and made myself an enemy in the process. Years later, that same man paid me back.

As far as Iran is concerned, they have played Israel to a draw in a few conflicts, and they opportunistically outplayed the US in Iraq. The US also remembers the humiliation of the hostage crisis of 1979. Such resentments run deep and long. 

I wish that more of the discussion was in the open. The Economist, the best independent source for so much politics, hides behind the propaganda platitudes, no doubt vetted by MI6. It insults our intelligence, and it breeds long-term disrespect for elites, especially when any lies are eventually exposed. That leads to populism. At an international level, it harms alliances and makes international bodies ineffective. Who can argue with China refusing to criticize the domestic affairs of any country while the West seems so hypocritical?

There is one more argument against setting out towards conflict with Iran, beyond its fairness and its likely impact of innocent Iranians. That is just that it is dumb and self-defeating. The US has had many chances to learn that particular lesson on many costly battlegrounds and proxy battlegrounds.

In the meantime, I would just love to read a balanced justification for the Iranian policy, replete with evidence and comparison with other nations. Even without that, I’d love to read about a reasonable and attainable set of goals. I guess it may be a long wait.

British Humour

Shared humour is a valuable aspect of any relationship. Humour is usually gentle and it can take any tension better than any pill. A wise man on a course once opined that humour, humility and humanity, three words starting with HU, are the keys aspects of a positive character. I use this mantra a lot, though I struggle with at least two of its components.

However, humour does not often travel well. Humour is a defining aspect of every culture, and people from one culture usually prefer humour that is familiar to something from outside. It is one of many reasons that humanity still tends to feel comfortable with its own type, one that is understandable yet sad.

In particular, most humour involves language, and one challenge for humour travelling is that of translation. Even the most basic jokes, for example puns, can be meaningless when translated. More subtle language-based wit can only really be appreciated in a native language. Even if something can translate perfectly, different cultures find different things funny.

I lived in countries where English is not the native language for sixteen years between 1996-2012 before moving to New York. While the American culture differs from the British, it was only when I arrived here that I realised how valuable it is to share a native language with the people you are interacting with each day. Humour is a part of that, but it applies to anything cultural, especially things like theatre. This realisation changed my thinking about where in Europe I’d like to live once I return there – London moved many steps up the pecking order.

At least I was lucky in living in a series of countries where English was spoken very well indeed. That was one reason why I did not learn their languages too well – it was always possible, and usually easier, to converse in English. That made me ridiculously privileged, but is also a source of some regret, for language is a gateway to any culture, and all my gates are rather closed.

I was always struck by how British humour is appreciated everywhere I have been. I can even extend this to a personal observation, that people anywhere they can speak a bit of English seem to like my jokes. I don’t think I’m especially witty, but I seem to always raise a laugh. I exploit it a bit, knowing that often people don’t know if I am joking or not, and I let leave them to wonder sometimes. Part of the lucky propensity seems to be a love of the British accent, which is especially strong here in the US – nowhere else have I witnessed so many young women swooning over me, and just for ordering a grande non fat latte.

But it may go further than the accent; it might be that something in a British upbringing lends itself to humour that can work. It seems to be true for the Irish as well, and they are still more loved than the British, partly for their underdog attitude and partly for their extraordinary wit. I have rarely met an Irish person, no matter how educated or not educated, who can’t find a spontaneous apt turn of phrase.

My favourite example of how British humour is loved is a sketch from 1963 called Dinner for One – you can find it, and several of the other examples I quote later, on Youtube. I had never seen this sketch until I left the UK. But I learned that it is loved so strongly across Northern Europe that it has reached ritual status, with everyone knowing the catchphrases. I was at a New Year’s eve party in Stockholm, and everyone was drinking and was spread around the house and outside (yes, it was below freezing but Swedes are like that), until someone shouted that this sketch was coming on TV and everyone converged around the set. Seemingly it is shown at the same time every New Year’s Eve and almost the whole country watches it, year in and year out. It was funny, but really? 

While I love many things about New Yorkers, I struggle to appreciate American humour, from almost any ethnic or regional group. To my taste, the advertisements here are almost universally terrible, especially when they try to be funny. The late night TV sketches can be funny, but they tend to be cruel and too similar to each other. The mainstream comedy programmes are usually awful. The exception is anything Jewish, from Seinfeld to Woody Allen and anything in between.

So I spent a bit of time trying to work this out logically. I started with some nostalgia, looking on Youtube for sketches that had made me laugh out loud as a child and still remembered. I found “The Bricklayer’s Lament” by Gerard Hoffhung, “Take a Pew” by Alan Bennett, in “In the Pub” by Peter Cook and Dudley Moore, all of which made me laugh again but didn’t seem quite as funny as I remembered.

Then I tried to fill this out with other seminal comedies. I eliminated many that travelled the best, because they were either slapstick, like Mr Bean, or what I termed catchphrase comedies, of which Dad’s Army may the most famous. A catchphrase comedy is where a set of characters is put into a situation and respond in utterly predictable ways, essentially with their catchphrases – “we’re all doomed”, for example.

What remained started with Beyond the Fringe and Tony Hancock and moved through Monty Python and The fall and Rise of Reginald Perrin, with The Office coming later. In parallel were TV and Radio wit shows like Have I Got News for You and Whose Line is it Anyway.

Then I thought of more recent shows, though I am not sure how recent some of them actually are, since I watch them on PBS here and sometimes they buy and repeat stuff from before the millennium. I love the wit in “Upstart Crow”. But other shows are more notable for silence. Look out for “The Café” which my wife and I rechristened Nothing Ever Happens. Not much happens in “Mum” either. This entire muse on comedy was initiated by a show we saw for the first time last weekend, “The Detectorists”. This show featured two lovable losers who ran away from facing the issues in their lives by standing aimlessly in fields with metal detectors. To my taste, it was really funny. And could never dream of being commissioned in the US.

Using all this, I tried to come up with some comedy genres. Wikipedia did not help, it listed twenty, most of which seemed to overlap. A sitcom using dark observational wit seemed to cover at least four. I narrowed my list down to: catchphrase and slapstick humour; cruel, shocking or exaggerated humour; witty word-based humour; and wry, vulnerable, loser humour.

Catchphrase and slapstick humour travels and I suspect many cultures have an abundance of it. The US seems to have a lot of the cruel and exaggerated type, perhaps influenced by Hollywood and the desire to appeal to an immature male demographic. I fear James Corden and Ricky Gervais have become rather infected by this style. The witty sort depends on language, and the Irish are probably the best, but the British can thank Beyond the Fringe and Footlights for a strong legacy.

It is the wry, vulnerable, loser humour that I see no evidence of in the US, but it is all over many successful British shows, and seems to be the sort that leaves the strongest mark on me. It requires a slow pace, always a problem in the US. Silence doesn’t get much of a look in here, where loud talking often seems to drown out listening. And it also needs an acceptance of vulnerability. In Britain, perhaps it is a happy legacy of coming to accept faded glory – something it will take at least two more generations of Americans to embrace. If so, that might help to explain how the Jewish excel at the same sort of humour – in that culture, preparing for the next humiliation is a dominant mindset.

So I am not sure if all this musing achieved a lot. I suppose there were a few lessons and a few laughs. Nothing seems as good as it did years ago. Listening is a great starting point for humour. PBS is a treasure. Faded glory offers some compensations. And thank you, Peter Cook and friends, your laughter outlives you.      

When Dems are Dumb

New Yorkers are astonishingly quick to complain. People moan all the time, and are very quick to turn against someone or something. It takes guts to perform on a New York stage or a New York sports field, because boos will start raining down pretty quickly. Philadelphia has the same issue. It can be fun but it is also cruel, and often counter-productive, as sports stars can lose confidence or decide to play in a friendlier town.

So I suppose I should not have been surprised a couple of weeks ago by the aftermath of the announcement that Amazon had chosen Queens for part of its new headquarters, thereby creating tens of thousands of well paid jobs. I for one was delighted by the news – the career prospects of our college sophomore had just improved significantly.

But locals, including many Democrat politicians, rushed in to complain. Locals all thought the rents would go up and the subways would become more crowded. People in public housing nearby thought prices would go up and that they would be squeezed out. Everyone seemed to think that the mayor and governor had negotiated poorly with Amazon and given too many incentives. And Democrats riled against a system that seems to place giant corporations ahead of ordinary citizens.

Get a life, guys! Would you rather have lots of jobs or no prospects? Sure, the rents will go up but more people will have income to pay for them. Sure, the subways will become more crowded, but de Blasio has already shown initiative at infrastructure improvements and Amazon will support it too, maybe with a new LIRR stop in LIC. If you are in public housing, surely jobs on your doorstep is just what you want, so shape up and earn one. Who knows whether the negotiation was over-generous, all we know is that they won. And it is quite true that the system values corporations over citizens, and established successful areas over struggling ones, so how about coming up with some policies to fix that?

Sometimes you wonder what sort of world some Democrats would rather live in. Maybe they would like one where all jobs are equally paid and part of the public sector? Oh wait, the Russians tried that one and it didn’t seem to work too well. Steven Pinker reminded me earlier this year that market capitalism, for all its faults, has been the driver of tremendous human progress around the world. The smart move is not to rail against it but to use smart policy to moderate its detrimental side effects.

This matters politically. Virtually the only refrain that the Republicans have that has any resonance beyond single issues like abortion is jobs. As a refrain it is almost meaningless unless the Democrats give it meaning. Jobs are a flimsy defence behind deregulation that puts citizens at risk and places ever more power with capital. But it becomes meaningful if the other side appears to be somehow against jobs. And the reaction to the Amazon announcement seems to prove that some of them actually are.

This is one example of Democrats being dumb. While the congressional leadership has actually been pretty smart lately, thanks to Pelosi and others, there are other examples as well. It is a hard position to finesse, but sometimes Democrats can appear as though they care about groups on the fringe at the expense of more everyday concerns.

It is hard to finesse because right is usually on their side. Trans people shouldn’t face discrimination. LGBT, female and racial minority rights are a multi-generational struggle that must be continually fought, so that progress can be sustained in the face of bigotry disguised as evangelicalism. But while true, it can’t dominate the platform or the daily rhetoric, because for most folk outside big cities the concerns are rather marginal. Letting these issues dominate the discussion fuels the belief in the heartland that elite city-types really don’t care about people struggling to stay afloat in hollowed out towns.

The other own goal is immigration. All we here from Democrats is horror at the inhumane treatment of asylum seekers by the Trump administration. Again, that is justified and fair, but it simply feeds into the fears stoked by Trump and his cohorts. It was telling that immigration, via the caravan, was the dominant tactic used by Republicans leading up to the midterm elections. This has been shown to work around the world, and it worked here too.

But the Democrats have created many of their own problems. They simply have to come out against illegal immigration. Actually, the Obama administration did more to curb illegal immigration than predecessors. It is striking how many of the reports about deportations concern people who came in illegally and then committed further offences. Well, it may seem harsh, and we certainly should not be hunting these people down too hard, but in the end this is just following the law, and Democrats should say so. Then they can articulate a balanced policy, and the issue would be neutralised to a degree.

The Democrats are not short of issues where they can create a platform that will resonate with enough voters that they will need in 2020 to unseat Trump and flip the senate. Pelosi spotted healthcare as fertile territory, and that will not change. Another is the broad topic of sleaze and corruption, where the opposition commit daily own goals which will only become even easier to expose once the new House can exercise due oversight. This work should remain measured but persistent and the fruits will be abundant. Gerrymandering and voter suppression can be lumped into this topic. Let it crescendo into 2020 and reap the benefits then, rather than looking for impeachment beforehand.

I suspect a third issue will emerge over the coming year; the economy. Trump has played his cards too early on this one. Within a year it will become obvious that the injection of steroids represented by the tax bill and budget expansions will not have made ordinary people any better off, while stock market will have retreated and it will be clear that bullying GM is no substitute for an industrial policy. Even if a trade deal with China is announced with great fanfare, the tariffs will have hurt people too.

Healthcare, the economy and corruption will be plenty to fight and win with in 2020, represented by a young (not too minority) candidate of hope and optimism. People overrate Trump’s strategic skills – in practice he will dig his own electoral grave with hubris, and, by then, frustration and weariness. By all means emphasise other things too in the cities and on the coast. There are a million other worthy issues, from climate to civil rights, criminal justice, dreamers, education, and many more, wow, how many more. But focus the noise on those that will win the states that flipped in 2016.

And please, please, don’t be the party against jobs.

All Our Saints

Homilies are in many ways the centrepiece of most church services. A typical mass has the ritual celebration of the Eucharist as its climax, but that part of the service is indeed ritual, in that it does not change from service to service. The first part of the service consists of readings from scripture and then the homily, where the presider tries to interpret the readings of, if they prefer, offer some other message.

The homily is the part of the service that can surprise and inspire. Nowadays I find myself in several churches across two Christian denominations, and one advantage is the chance to listen to many different celebrants. As children, most of us remember homilies (or sermons) as insufferably long and boring, and indeed many still are. It is hard to be inspired by an admonishing lecture, nor by a discourse on obscure theology, nor by some boilerplate provided by a Vatican website or elsewhere.

But fortunately the dull is no more common than the inspiring. A good homily requires certain basic attributes: seven minutes is a good length; it needs a beginning a middle and an end; and it must be delivered clearly at a steady pace. I often compare a homily to a blog, for they have many similarities.

However, in my experience the key ingredient in a good homily is some courage. It should make some connection between scripture and issues facing us in the present day, and not just with generic messages like helping the poor. Sadly, in my experience most Roman Catholic homilists, especially in the US, are frightened, whether by the Vatican or some more proximate part of the hierarchy, and that courage is missing or suppressed. A glorious exception was our pastor in The Hague, Sjaak de Boer: he had a position where he exercised a certain freedom from the stifling bureaucracy, and he used it to full effect. His homilies are so good that three books of them have been published.

I find many of the Episcopalian homilists here rather more inspiring. Their leadership must be more tolerant – though I don’t recall much tolerance in the Anglican Church of the UK, to which they are affiliated. I haven’t heard any evangelical homilies yet, and I’m not sure I’d like to either, for the hypocrisy implied by many of their positions seems indefensible, at least to me. Probably, I should seek out some such churches, in a spirit of being ready to understand and learn and to challenge my own assumptions.

I like the new young priest at the old people’s home where I volunteer. Homilies at his midweek masses are very short – it must be an encouragement to brevity when most of the congregation is nodding off. I was there on All Saints Day, and his homily included a simple statement that set me thinking. He referred to the saints as simply a few examples, suggesting that there is less of a boundary between canonised saints and the rest of us, in both directions: many canonised saints will have had flaws, and all of us have some saintly qualities. Then he stated that most of us have had people in our own lives that we are able to look to as our own saints.

Well, I thought, that is a nice concept, but I can’t think of many off hand. Perhaps his assumption was that most of us had a parent or early mentor we thought of in saintly terms. Not me. I smiled recently when my sister said that the longer the time since our mum died, the more able she was to appreciate some of her qualities. I feel the same, and sadly she may have to be dead a hundred years before either of us will allow her to enter the pantheon of sainthood, God bless her soul.

Then I thought of all the rest of my family, then my schoolteachers, my college friends, and even my bosses. This was quite a long list, but I could not identify a single candidate. Everyone had some deep flaw, and I could identify nobody who I had witnessed show consistent kindness to others when such kindness carried no personal benefit. That kindness became my benchmark for beatification: built on respect, offered without selfishness or need for gratitude, exhibited often. Building on the message of the priest, we don’t need to be conspicuous heroes to be saints, just kind souls.

Wow, I thought, perhaps this helps me to understand myself. I’m pretty sure that nobody on the same list would classify me as any sort of saint either. Indeed, I recall a lot of gratuitous feedback, especially at work, where people appreciated my intelligence and candour but blanched at my unkindness. Well, we love to blame our parents for everything, and we need to take responsibility for our own behaviour, but it appears that I lacked many positive role models.

I became more encouraged when I expanded my search into more recent times. Both of the families that I have married into have some wonderfully kind characters. Since I’ve started attending church, I’ve come across a few great examples, not usually the clergy but other kind souls. More recently, at the nursing home, a few of the residents and many of the nuns fill me with awe at their kindness.

But my real ah ha moment came when I thought about some of the younger people I’ve been exposed to over the last fifteen years or so. A few of my peers and many of my subordinates in my last period in Shell came to mind. So did a number of the young musicians I have sung with recently. These young people show respect and kindness naturally and seem to live in an environment that supports such behaviour. A little of it may even have rubbed off on me.

With this trail of thought I was able to draw a few general conclusions. First, I wondered what got in the way of all those who fail to meet the criteria. Common factors appear to be confidence and competence, a key part of which seems to be mental health. If you are anxious or out of your depth or drowning in some way, it is harder to consistently consider others. These factors condemned most of my bosses and many relatives. One way to grow confidence and mental health may be to drastically simplify life, in the way the nuns choose to.

Next, it is clear that sainthood begets sainthood. I have even witnessed that in a small way myself. If we are surrounded by positive influences, we can slowly learn to follow. If our lives are full of suspicion and fear and unkindness, it becomes very hard to overcome those burdens. This is just one more way in which inequality becomes embedded in society. This insight helped me to appreciate those many role models, usually maternal figures, who are able to act in a saintly way within tough African American communities.

And my last lesson is the familiar one about progress. If my own experience is in any representative and not a function of my own delusion or wishful thinking, then humanity seems to be becoming more saintly. Otherwise, how come so many of my personal saints are millennials? Sainthood begets sainthood, and this can work for individuals or for whole societies.

It may be ironic that the first generation to largely reject organised religion might be the first to be able to live closer to the values promoted by those religions. Even so, the thought is a profoundly uplifting one. And, for me, that is a great example of why many homilies are well worth listening to.       

My Top Ten Frugality Tips

As a numerate cynic brought up in a family that treated frugality as its religion, I believe I understand the topic of managing money quite well. Recently inspired by the Money Mustaches, I have compiled ten tips for leading a successfully frugal life.

Many of the tips are hard to implement, but tip one is the hardest. It is to invest in familiarity of basic finance theory. As many as half of the population are baffled and repelled by all mathematics, and spend their lives avoiding the topic wherever possible. Sadly, in managing personal finances, it is not possible. I believe a basic school maths curriculum should focus on the key relevant competences of arithmetic, budgeting, probability and estimating, but, until it does, we all have to try to compensate.

There are two halves. The easier half is budgeting, because all that involves is adding and subtracting, and even poor schools teach that. At its simplest, a budget starts with a balance in a repository such as bank account, and predicts cash in and out over a defined period to lead to an estimated balance at the end. Then actual expenses are compared with the budget, leading to a new opening balance and, hopefully, a better attempt to predict the following period, because of the knowledge gained. Especially with excel available, this skill should not be beyond the wit of most.

The tougher half links cash to wealth. The knowledge is not essential, but darned helpful in many ways. A profit and loss statement adjusts the cash flow for a period by including some virtual incomes and charges, reflecting items that do not lead to cash flows in this period but which average cash flows across periods. The only difference between cash flow and profit is this sort of item. The third statement is the balance sheet, that tracks accumulated wealth, which is the sum of all the previous profit and loss statements. The balance sheet tries to estimate assets and liabilities, by guessing what every item would be worth were it sold (or cashed in) today.

My second lesson is that wealth begets wealth and debt begets debt. The Money Mustaches show that if you can accumulate some wealth, then you can retire early and still live well for years, because of the income that the wealth generates. Socialists like me bemoan the way money tends to flow to the rich, but in simple terms that is only natural and fair, because the rich did something in the first place to earn the wealth that generates more wealth. So we are wrong, but also right, in that good public policy tries to dampen the effect by taxing assets and high incomes.

The main takeaway from this lesson for most people is to be very careful about getting into debt, because it can swallow you up. It is OK taking a mortgage or buying big items like cars on credit, but only if you can confidently predict future income to pay off the resulting liabilities. Just building up debt and trying to roll it up into more debt usually does not work forever. People in their 40’s should be paying down mortgages not refinancing them. Maybe I take this advice too far in my own life; I was taught to fear debt and addiction terribly. Nothing makes me shudder more than watching people gamble uncontrollably, since it combines those two fears.

Like many of the lessons, this one applies to businesses and even countries as well as to individuals. The US can get away with ramping up the deficit for many years, because it has a reserve currency and good credit. But over time the cost of servicing the debt creates a debt spiral, and then the creditors start calling at the door.

Lesson three is to budget, and to follow up with tracking and decisions. It is like dieting. We can all set a calorie target and set off on a good road. But we tend to break our own rules and then to drift before being jolted into setting another target. What is missing is the follow up, tracking what actually happened, and then making tough choices based on this reality rather than some naïve dreams of our capabilities. Budgeting is the same. Setting the first monthly budget is the easy bit. But it will only work if we then track the differences between our guesses and what then transpires, and then actively use this knowledge to improve both the next budget and our future frugal behaviour.

Lesson four is related, and it is about special and unforeseen expenses. Special includes vacations, big treats, gifts and times like Christmas. Unforeseen include family calls, medical bills, car maintenance and so on. For both types, if you budget and track over lots of months, you’ll start to see how much to allow, even though for any particular month you won’t know exactly what costs will emerge. But don’t just hope, or naively assume that just because costs feel like one-offs, they won’t recur. It is a sobering thought that most American families are just one or two unforeseen expenses away from real hardship.

Lesson five is about how to manage finances in a relationship. In truth, I have no idea how to do this. Every couple that makes this work well seems to have a different approach. You can either merge everything and have joint accounts, or try to keep everything separate with each contributing agreed shares to common expenses. Both of these have horrible flaws and can lead to terrible arguments. But I think the key lesson is to communicate and to be transparent. So force the discussion early on, agree to something and then talk about how it is going. There is no faster or more common way for relationships to turn sour, except perhaps sleeping with someone else.

Lesson six is a reminder that frugality and generosity are not exclusive; indeed we should aim for both. You don’t have to be cheap to be frugal, but you do have to budget for what you are likely to spend, whether on a passion or on compassion. For charity, I like the idea of having a budget set aside. Then you can choose whether to give to every homeless person on the subway or hard-up family members or every cause in the mail or to chosen charities or even all of these. But it all comes from the charity pot, so you know where you stand and can make choices.

Lesson seven suggests a financial clean up every couple of years. Businesses find they need a cost-cutting effort every so often, because there are always good projects to spend on. It is the same for all of us. It makes sense to perform a big review sometimes, usually looking for chances to save, or to sell some assets. Our homes are usually full of clutter, and our finances are often much the same.

The last three lessons are more tactical. Number eight is to know frugality enemies. 90% of the financial industry comes in this category. I used to think financial firms and advisors were trying to help me, but now I know better. They want me to get into debt so they can make money servicing that debt, or they want me to spend on services that benefit them. Do not trust them; avoid them wherever possible, except where you can use their tricks to your benefit, such as churning credit cards. Most advertisers are also your enemy – the only thing they want you to do is spend, and if you really needed what they had, they would not need to advertise. The harder they push it, the less you want it.

Number nine is a tactic to build on number eight, and it concerns special offers. My lesson is to ignore all special offers until you have decided to buy something. Never think of what you have saved; only what you have spent. But as soon as you have decided to buy something, then it is time to shop around for offers.

My last advice is a bit old-fashioned, and it is to use cash. There is something about forking out bits of paper that give a feeling of spending and control. It is too easy to flash a card and to somehow treat the expenditure as unreal or deferred. It would be hard to achieve nowadays, but the ultimate in budgeting would be to use cash for everything. I can’t do that, but I do note the frequency that I visit ATM’s and I find myself pulling back when it becomes too common. The last thing the finance industry wants to you use is cash, and they are your enemy, so it is probably a good idea to use it.   

In Praise of Frugality and Money Mustaches

Paul Solman is consistently excellent in his Making Sense reports on the PBS Newshour each Thursday. He chooses wonderful topics and explores them with whimsy and depth, and he is not afraid to challenge common perceptions. I am never bored and I always take away something useful.

Last Thursday he introduced me to a blogger I had not heard of, writing under the brand of Money Mustache. The founder of the blog is a guy who managed to retire at thirty, and claims he has a method for most others to achieve something similar. Having felt that I did pretty darned well in retiring at fifty, obviously way behind target for these people, my interest was immediately piqued.

At the heart of the blog is the insight that a certain amount of wealth should be sufficient to fund a lifestyle forever, or at least as long as most of us are likely to live. That is because invested wealth generates income. The Mustaches believe that you can spend about 4% of a pot of wealth each year, and on average the wealth will not dwindle to nothing until you are dead. So if you can find a way to live on $30,000 per year, you need first to acquire wealth of $750,000, and then you can retire.

You could acquire the necessary wealth by inheriting from wealthy parents. If that avenue is not available, then anyone who can get a reasonably well-paid job in the USA can budget to save a proportion of their income until the target is reached, noting that things get easier because along the way income from already acquired wealth kicks in.

Then lots of blog postings bemoan how most Americans spend far more than they need to, and often for flawed reasons like being seen to keep up with neighbours. Some of the money saving ideas are rather biased - many would say male-orientated, such as living with only two or three pairs of shoes. Some, such as a penchant for do-it-yourself, are not available to everyone. But many of the ideas are sound, and sufficient to provoke thinking about what satisfaction such expenses truly provide.

I agree with a lot of the blog. I too am astounded how much many Americans think they need to spend. Median salaries are over $60,000 and, the way I was brought up, that should be enough to save plenty for anyone living outside the big cities with high rents. I too have experienced the happy phenomenon of wealth generating income. When I retired, I vaguely calculated how much I could spend per year to tide me through to the time I could draw my pension. In practice it has been much easier than I foresaw because of the wealth-based income.

I certainly agree with the investment strategy of the blog. It is not necessary to be a fancy investor like a day trader or frequent stock picker, indeed for most of us that would be both boring and loss-making. Instead just put money in index tracked funds and leave it there. It will go up and go down, you will feel in turns rich then vulnerable, but leave it long enough and it will grow and generate dividends.

Much of the frugality advice doesn’t really apply to my international family. One trick is to game credit cards, by churning through special offers. Well my circumstances mean I can’t even get most credit cards. We have also chosen to live in NYC with its high rents, and have necessarily high travel costs because of our connections in Europe.

When you first move to a new country, or even a new region, you have to loosen the purse strings a bit, and that is when you are most likely to make mistakes. Even amidst the chaos, try at least to get the big things right, like housing and cars. It is not easy. I found that it took about six months to regain any control over my finances.

I have two pieces of advice for people living abroad though. The first is to try to do things as the locals do. In Sweden, shrimp is plentiful and cheap, so eat it. The locals do things for a reason, usually geographical, so you’ll be rewarded if you follow their lead. The second advice is about planning to leave. These assignments tend to have variable end dates, and the temptation is to live always as though you might be leaving within a few months. Within reason, avoid it, for life in a suitcase is miserable – just act as though you’ll be there for a few years, and deal with it later when things turn out differently.   

Going back to the Mustaches, many of the frugal principles are good. The blog hates cars (they are also closet environmentalists). Most people consider the cost of driving to be the cost of gasoline, but a good rule of thumb (in the US) is to multiply that by five. Families with two or three new SUV’s have plenty of scope to reduce costs. Next, they hate cable TV. I can see the point, as the cost is ridiculous, but I do love my live sports, PBS and NY1. Part of the reason they want to ditch TV is to avoid exposure to ads tempting us to waste money, which feels a strong argument. They also try to save on clothing, maintenance, gyms, smartphones and so on.

One common theme is about being wary about future liabilities. That obviously holds true for a car with a low down payment. I didn’t yet find it in the blog, but pets fall in the same category. You can pick up a cat for a few dollars, but that same cat will cost you thousands before you are done with it. Go ahead if the pleasure means that much to you, but do so with your eyes open.

I was brought up in a very frugal household, a product of war and rationing scars on my mother. Bless her, she acted as though her main goal in life was to die with a large bank account, and she duly achieved it, but she could have had a more fulfilled life if she had learned to be generous, especially to herself. As the blog argues, it is good to be both frugal and generous. I have been blessed in my life partners for slowly teaching me the wonders of generosity, and perhaps I have managed to imbue a bit of frugality in them in return.

My frugality has also been supported by my geeky love of numbers. It is much easier to understand accounts and to budget if spreadsheets and estimating and calculating come easily. I do wish school curricula paid more attention to this mundane subject, limited in mathematical depth but crucial to every human. Our daughter was offered a personal finance course right at the end of high school, but it seems that most of it dealt with parochial things like tax codes. There are many more useful, universal aspects to the subject than that. The subject is so difficult for so many people, and, sadly, their reaction is often to wish away the problem and just hope for the best – not an effective strategy.

A frugal upbringing, numeracy and cynicism must be the perfect combination for developing good frugal habits. Perhaps the original Money Mustache was blessed with the same combination. His acolytes certainly seem to be on to something, since this has developed into quite a movement by now. Well played them. And thanks again to Paul Solman for bringing it to my attention.

Thinking of frugality led me to try to come up with a list of top tips from my own experience. I’ll share them next time.

Doubling Down on the Dutch

We have just returned from a two-week trip to Europe. We visited two airports in each of England, Belgium and Portugal, stayed in one hotel in Belgium and two in the Netherlands, and drove extensively in Portugal, Belgium and the Netherlands. I understand each culture and each language poorly, but just well enough to observe, and learn, and spot lessons, usually simple lessons that the world fails to heed.

Having lived in Holland for eleven years and rarely having been back since, that part of the trip was the most interesting to me. We spent time with our daughter in a small town in the south and visited relatives and friends elsewhere, and a short trip to our former hunting ground of The Hague proved very fruitful. Our former Church had an event planned so we could meet many acquaintances and enjoy a dinner afterwards with friends, and later we even met another friend by chance on the street.

The Dutch are a special race. I was reminded of this even before the visit, when attending a music workshop in New York led by a Dutchman. He was confident, with no airs and graces – his whole demeanour said: “take me as I am”. He offered a few life lessons, as he called them, prompted by things that came up in the workshop. One such piece of advice was “argue properly”, something I had never heard but which immediately resonated. It is the Dutch way. They love a good debate, and everyone takes debates seriously and offers opinions, sometimes for hours. But eventually a conclusion is reached, based on shared data rather than hierarchy, and after that implementation starts. This is a large part of what is called the Polder model, and it is how Dutch society operates.

This trip reminded me of several ways that Holland and the Dutch can be really ugly. The land is stunningly flat and featureless. While the old towns are beautiful, much of the modern architecture lacks variety. The language is loud and guttural. The weather is wet and windy. The people seem to lack warmth and taste and care little for style, and their customer service is abysmal.

Yet despite all this I had a great time and my admiration for the land and its people was rekindled. I remembered how simple it was to do business there, because people wasted little time, said what they thought, implemented well and were careful with money. I could see the results of this everywhere I looked, with functional industry thriving. We drove along the coast through the delta, and saw wonderful examples of the water management skills of the Dutch, a competence that the whole world will benefit from as climate change wreaks its toll.

Most amazing of all was the transportation. Unlike the US, Europe seems to have a method of asphalting roads that avoids them becoming immediately pitted with potholes. The smooth ride is helped by wonderful signage and smart design of junctions, although I found many of the roundabouts a bit strange – they often had two lanes with a divider between them at certain points, which meant you really had to choose carefully.

Then there is the provision for cyclists and pedestrians. In towns, the car is very much the junior partner, with any journey interspersed with pavements that are either light grey, indicating a pedestrian route, or red for cyclists. Add in tramlines, and it can feel like a maze. It was unfamiliar, even for someone who had driven there for many years, but it was functional and safe.

One thing this system requires to be effective is obedience. The Dutch have ensured obedience by embracing technology and heavy penalties. The parking meters are a technological marvel. The motorway speed limits are even more amazing, changing every few kilometres, often in real time and automatically depending on traffic. It foreshadowed a possible future of unmanned cars, all of us tootling along at the same speed without changing lanes or looking to game the system. And we all arrived safely and without delays – well played the Dutch. But I must pray that my car hire company doesn’t send me a bill in the next few weeks for some unknown offence.

The Dutch have among the most car miles per square kilometre of anybody, because of the dense population and developed economy, so they need all this innovation to avoid gridlock. I also loved the way so many traffic lights had sensors determining when they would change for optimum flow. Actually, I fell foul of the system until I realised what was happening, because amber lights repeatedly stopped me. I was at the back of a line of cars, and the sensor wanted me to get through and then change the light, but I was going a bit too slowly and being a bit too cautious.

I love theories about how geography and history determine character. In the Dutch case, it is simple. The land is flat and prone to flooding, but productive if managed. The delta provides a source of income via trade and especially tariffs for passage. So think of a grisly lock keeper, hardened by the weather. He or she must be technically proficient, resilient and ready to endure hardship. He or she must also be tough, almost brusque and uncompromising in taking fees and counting pennies. He or she must work in partnership with other lock keepers but be ready to argue. That is the Dutch character. Take me as I am.

As soon as I drove in Belgium, I could detect differences. The people are softer but also more slapdash. The signage is poorer, the roads are less safe and some drivers lack discipline. But the welcome is warmer and the food so much better! I find it fascinating that just a few miles distance has created such stark and sustained differences.

The world has become much smaller since the Dutch character was formed, and there is a chance for future generations to defend their unique characteristics while also learning more readily from others. Transport again offers so many simple opportunities.

In New York, the longer phasing of traffic lights is smart, but sensors could make things so much smoother. A lesson in procuring and laying asphalt is long overdue. Bike lanes are smarting to emerge, but are compromised by double parking and carelessness of drivers. Speed limits are lower than in Europe but hardly followed or enforced, even though technology would make that simple.

A transport experience is highly visible. But there is no doubt that the Dutch have used their character equally effectively in less visible areas of public policy, such as health and education. Lessons would be abundant, were we ready to accept them. 

What holds this learning back? Partly it is resistance to change, often masked as protecting freedom. Perceived freedom means a lot to Americans, descended as they are in most cases from pioneers. Discipline and cooperation do not often gel well with such priorities.

It is not surprising that Dutch is a language full of proverbs, reflecting outcomes from years of Polder model learning, passed through the generations. “Argue well” is such a saying, one that I had not heard before but which I love. The US political system could benefit from learning to argue well. The Dutch used to run New York – it was originally settled as New Amsterdam. Perhaps it would be a better place if they were to return, though the food would certainly take a turn for the worse. 

I am Kavanaugh

The US is currently consumed in an ugly drama, being played out in public. I was not here at the time, but it feels reminiscent of the OJ Simpson trial. This drama shares elements: a human story playing out along a cultural fault line; live TV courtroom style drama; most people having a preordained opinion and taking a selective view of the evidence; and long-term consequences for the nation.

I joined most people last Thursday, finding CNN on my TV for the first time to witness the Kavanaugh hearings. They were certainly dramatic. Despite the ludicrous format imposed by the Republican majority, a clear picture of Christine Blasey Ford shone through. As one commentator put it, it was a wholly compelling performance, precisely because it was not a performance. Many people tuned in hoping for her to be exposed as a political puppet, or an unreliable witness, or with a fatally flawed recollection. None of these things happened, and the best that those that wished to discredit her could come up with was a reluctant admission that the events she recalled really did happen, but perhaps Kavanaugh had not been one of the perpetrators.

Then Kavanaugh took the stand, and I was shocked by his attitude. He was just as authentic; it was just that the character exposed was far less likeable. He was angry and bitter about the process, claiming the whole circus had been a political ambush. He was close to a broken man, bemoaning the lasting damage to his reputation. I believed him as well, at least in these aspects. When he deigned to comment about the actual allegations, I was less convinced.

While watching, I was struck by similarities between my own background and that of Kavanaugh. He is just a few years younger than me. We both had ambitious parents with money and were packed off to private schools and top colleges, burdened by high parental expectations for our futures. From what I gathered, both of us had a desire to belong socially, and that meant fitting in with groups of boys. That led us to comfortable forms of rebellion such as drinking and boorishness and maybe a dose of bullying to show our credentials. Maybe we were both frightened by girls and female intimacy, fearful of humiliation, which led us to struggle to create normal friendships with girls, and then to potentially objectify them when with other boys.

My own experience is painful to recall. My father was old and died when I was 15, and my mum found intimacy difficult and was prudish. At the time, TV and movies and books did not help much either, generally portraying idealised confident and aggressive boys. I remember recoiling when a girl tried to kiss me when I was 17, and then again when another girl suggested sex when I was 21. I don’t remember seeking advice for anything intimate, and I guess it was no surprise that in the end an older woman was the one to enable me to start to face the inhibitions when I was 25.

From Kavanaugh’s attitude, evidence and interviews, his story might well be very similar. One difference is that he was better connected and also a athlete and presumably more desirable, so he had more opportunity for missteps than I did. Most of the time I could just hide in my misery. At the country club and fraternity, he had a higher likelihood of encounters like that described by Ms Blasey Ford. I could easily have made similar mistakes – what saved me was not good character but acne and a lack of opportunity.

My guess is that these stories are far from unusual, even today, and that it would be helpful if people knew that. I think I read in the 1980’s that about 40% of boys left college as a virgin. The percentage may have reduced now, but not all that far, and not in every culture – Japanese boys are known as inhibited and late developers, for example. Yet popular culture portrays male virginity above 20 as uncommon and freakish. I watched the movie “the 40-year-old virgin” and cringed. This culture does nothing at all to help those frightened boys.

One way that boys will be boys remains that they exaggerate and struggle to express their true feelings or to seek advice. It may not be 40%, but a significant minority will be suffering like I did and perhaps Kavanaugh did too. I would not equate their trauma to that of victims like Ms Blasey Ford, but it is still trauma. And of course if society could address the trauma of confused boys, that would create fewer female victims as a direct consequence. Luckily, this is one of the many ways that the current generation is so much smarter than my own, but it is not the case for everyone, nor everywhere – think of India or China. 

Going back to the current politics, feeling commonality with Kavanaugh helps to put me in his shoes, but it doesn’t make me support him for the Supreme Court. There are many reasons for this.

First, it feels all too likely that he really did molest Ms Ford, even if some of the other allegations might be exaggerated and driven by less pure motives. I might have done this too, given different circumstances, and, in the unlikely event that I would have risen to become a Supreme Court nominee, I think I would have dug myself into a hole too. First I might have dissembled, then I might have doubled down and become angry: that is how entitled people who are used to getting their own way behave. My guess is that he now regrets not being fully transparent from the start, but that hole is too deep for that now, at least if he wants to fulfil his lifetime ambition.

Now, I’d be open to an argument that says he should not be excluded by an indiscretion as a 17-year-old. Indeed, I’m very open to that; my own experience means I would not judge him too harshly, despite the trauma of Ms Blasey Ford. The problem is the hole he has now dug. It is sad, but he has probably dissembled, and that would disqualify him. The legal burden of proof here is far lower than a criminal case; even if we think the odds on his honesty are as low as 75%, he is disqualified.

That would be sad, harsh and even potentially unjust were it not for two other arguments.

First, he destroyed his own credibility on the witness stand. It is fair, even true, for Lindsey Graham to berate the Democrats for their cynical ambush of the process. But Kavanaugh cannot do that himself, still less attribute motivations of revenge for 2016 and the persecution of the Clintons. A Supreme Court judge cannot be so nakedly partisan, and, even under duress, he should know that. For as long as he sat on the court, decade after decade, he could never shake off a label of being partisan and hence biased. We struggle to defend Clarence Thomas as a possible abuser. That would be hard with Brett Kavanaugh also, but possible. Observing him as a naked partisan undermines the Supreme Court far more completely.

My other argument is about hypocrisy and fair standards. Entitled people tend to shrug off their immature behaviour. The last two Republican presidents evaded the draft, and both have plenty of other youthful excess to explain away, one of them not just in youth. I can almost forgive that, if only these same entitled people demanded the same tolerance for others. But they are the ones who cheer on policies that lead to mass incarceration of black youth and weak attempts at rehabilitation; in context, those kids are at least as forgivable.

And what about abortion? That is such a tough issue, with the judgement about when a foetus becomes human against potentially destroying the prospects of a young mother. But I don’t see a massive attempt from these same people to make the boys as responsible as the girls, nor to make unwanted pregnancies less likely. Look at Kavanaugh and imagine things went a bit further and Ms Blasey Ford became pregnant – it is all too possible. Dragging up a peccadillo from 35 years ago may damage his reputation, but the other party would probably have had to abandon any chance to reach the Supreme Court or any other senior position, were abortion not available. Sadly, it is typical of men of privilege to expect a different treatment for themselves than they demand for others.

Sorry, Brett, I can empathise with you, I can fully understand what you did, but you are not worthy of the Supreme Court, and it would be an enduring tragedy if we have to remember this every time we see your face with eight others in black robes for the next thirty years. It is time to quietly retire and devote the rest of your life to defending victims. How about setting up a foundation to help mixed up boys?

The six percent curse

I’ve been looking for root causes of the economic challenges facing the world. My answer is the assumed real return on capital, a risk adjusted 6%.

One of the main changes in global economics over the last forty years or so is how most capital now acts as one large pool. Beforehand, capital was a bit sticky, and it also flowed within many small pools. Moving capital between the pools was costly and often prohibited by capital controls. Only the very well connected could achieve it, people such as dictators, who became very rich indeed.

But now all that has changed. Capital controls have largely vanished, except in places like Venezuela, and to an extent in China. Technology has spawned a plethora of financial products to speed things along. And most investors have mingled together into a single mass, facilitated by banks, all looking to fish in the same pond. And more and more, investors include us: our pension, whether a company scheme or a 401K, forms part of the capital being invested.

To a large extent, the freeing up of global capital has been a good thing. Great projects can always find funding, including in the developing world. Innovative companies can improve everyone’s lives. Those dictators have a tougher time these days. Corporate bosses cannot get away with being lazy. Local bank managers can’t give loans to their cousins or golf buddies and ignore more deserving causes. Competition and scrutiny are everywhere, including on governments.

But a single pool of liquid, free to flow, must find a level, and that level has been 6% real for twenty years now, a level that has become a self-fulfilling prophecy. It is the big pension funds that set the level, for they need an assumption to balance their books. Now everything in the pool has to assume the same level, and most capital in the world is in the pool.

6% is a heroic rate by historic standards. Although the global population is growing at close to that rate, many richer nations now have declining and ageing populations that hold back growth. But 6% was set at a time of optimism. More cynically, banks and the US government were trying to promote 401K’s at the time (to benefit corporations and banks), and 6% made those seem more attractive.

The consequences of 6% have been huge. Most obviously, the rate builds in ever growing inequality. As Piketty claimed, usually r>g, and g, the natural real growth rate of production, now seems to be 2-3%. 6%, r, is the rate that capital, or existing wealth, grows. Summers’ theory of secular stagnation suggests that long term growth potential could be even less. So the rich get relatively richer compared with those without wealth. Without large compensating wealth, inheritance or property taxes, this cycle is set to continue, at least as long as r stays at 6%.

The next consequence is delusion, recklessness, bubbles and periodic crises. Anyone needing funds, so basically all of us, but especially companies, banks and governments, have to put forward a plan to achieve 6%. Meanwhile, the pension fund investors need to find plans that generate 6% to stay afloat. So everyone has a need to keep the plates spinning. So claims inflate, so does debt, and risks are overlooked as everyone crowds in. Then the bubble bursts; in the case of 2007-09 the asset class that collapsed was US housing debt. But such is the global dependence on the fiction of eternal 6% that governments chose to bail out banks, allow homeowners and jobholders to suffer, and even to make suffering worse by reducing their spending that was social rather than financial. After a while, the plates can spin again. We blame bankers, and the politicians in their pockets, but actually they had little choice, so long as the core assumption stayed unchanged.

The next consequence is starvation of investment. With a high discount rate, benefits in projects realised after more than 15 or 20 years count for little in financial evaluations. These tend to be the projects involving high up front capital or new technologies, and include things like roads and hospitals. It is no coincidence that infrastructure in developed nations has been hard to fund over the last fifty years. Projects such as social housing fit this category as well. The only people who can make such investments are in golden sectors like IT, where valuations can be sky-high, and in companies or places not reliant on debt financing. The most obvious example is China, and the Belt and Road initiative is the result.

While there are many factors behind the rise of populists, one root cause might be 6%. Mainstream social democratic parties have been sucked into the assumption, and been forced into policies to feed it and the class that benefits. Inequality rises, while poor citizens are lured into schemes built on inescapable debt. The rich spend less than the rest of us on average, so consumption overall is reduced over the mid term, a further argument towards secular stagnation. In this situation, someone promising escape while blaming foreigners has much appeal.

One other consequence of the flattening of global capital is the growing power of economic bullying. Trump does not need his mighty military as much as previous bullies, he can apply economic sanctions very easily, and with greater potency than before. In the long term the world will respond by stripping the US of its unique position as owner of the only reserve currency. At that point the US debt will leave the US itself at the mercy of China and other possible bullies.

If I am right, or even (more likely) somewhat right, and 6% is a root cause of so much damage, what can be done to reverse it? At first, this question seems simple, since it is just an assumption. Why not just change it to 4%?

This could be done, but it would instantly create another financial crisis. All invested wealth would suddenly be worth less. In particular, any pension fund or other fund that pays out in the future would immediately have an unmanageable deficit. That ropes in the largest investments, nearly all national governments, and cities, starting with those like Chicago and Detroit, where the most financially stressed regular people live.

Still, recognising the problem remains the first step to solving it, even if admitting it creates a crisis. That is the nature of such problems. The key is to have a solution to the crisis ready at the same time.

Short of solving the problem, some steps can help to reduce its effect. It is probably not of benefit to go back to a world of capital controls, but the water can be made stickier. Start with a Tobin tax, designed for exactly the purpose of slowing down the most speculative flows. Then reverse incentives for debt. As part of the plate spinning, many advanced economies have favoured debt, through measures like mortgage tax relief and other tax advantages.

Then take a deep breath and change the assumption, led by governments and mandating banks. But have the safety net ready, not for corporations but citizens caught up in the mess. That implies printing money for debt relief and pension shortfalls. It would be like the last bailout, but this time targeted to change the assumption rather than prop it up. Its effect would be like a short burst of high inflation – writing down almost all wealth. And, having reduced inequality at a stroke, the new assumption would mean it would only build up again more slowly.

Lastly, take the opportunities that the reduced assumption provides. States can categorise investments with social or longer-term payback, without falling into the traps of nationalisation or picking winners. It is simply using the extra leeway to steer capital to the benefit of society rather than bubbles.

Most likely, only another crisis will enable this shift to happen. Perhaps that is fair enough. But this time, if I am a little bit right, economists can be preparing for the crisis in advance, and use it for lasting benefit.