Do free markets self correct?

 

Eugene Fama

If you believe in what's called the "efficient markets Hypothesis" then the 2007 financial crises shouldn't have occurred because free markets have the ability to self-correct. 

The 2007 financial crises revealed that much of the recent productivity growth in finance was achieved through the debasement of its products - the creation of overly complex, riskier, and even fraudulent products. The complexity of the new financial product, 'Asset Backed Securities' (ABS's); 'Collateral Debt Obligations' (CDO's) and 'Credit Default Swaps' (CDS), is exactly what made them dangerous and what nearly brought the capitalist financial system crashing down. 

Markets may transmit information, but what reason is there to believe that - unlike any other institution - they have a built-in capacity to correct their mistakes? Moods of irrational exuberance and panic can, and often do, swamp the price discovery functions of markets. 

To avoid a worldwide economic slump and depression which occurred after the 1929 'Wall Street Crash', governments adopted Keynesian policies. They bailed out some firms, bought toxic debts, and injected money into the financial system to shore it up. It was a kind of socialism for the rich and the free market for the rest of us. 

The American economist, Eugene Fama, of the Chicago School, took a different view. He argued that financial markets were a casualty of the recession and did not cause it. For Farma, the U.S. government made lending too easy, credit too easy and too easy to obtain. He maintained that banks acted rationally in responding to incentives put in place by an interfering government and that unencumbered markets work efficiently. Fama won the Nobel Prize for economics, but there were many other financial crises before 2007, and they seemed to have been triggered by excessive liberalisation in the financial markets. 

In 1982, Chile got into a major banking crisis following radical financial market liberalization and there were banking crises in Sweden, Finland and Norway, following financial deregulation. There was the 'tequila' crisis in Mexico in 1994-1995, and a crisis in the economies of Asia, Thailand, Indonesia, Malaysia and South Korea, in 1987, which resulted from financial deregulation.  

Some do argue that this theory called the efficient market hypothesis, played a key role in the making of the 2007 financial crisis because it made policy-makers believe that financial markets needed no regulation.

Before you study the history study the historian.

 

I would hardly describe history as neutral. The famous English historian E.H. Carr, did say that before you study the history, you should study the historian.

Every historian carries their own baggage.  Nevertheless, it's rare to find anyone who sees history as simply one shambolic heap of chaos, chance, accident and contingency. We have to give history a coherent shape in order to make sense of it and that's why we divide it into periods of history. 

Scarcely anybody believes that there are no intelligible patterns to history at all. For the most part, the threads that lash it together have been scarcity, hard labour, violence and exploitation. If we were to cut through past history at any point and inspect a cross section of it, we're likely to find the great majority of men and women, living lives of largely fruitless toil for the benefit of a ruling or privileged class. We're likely to see a political state that is prepared to use violence to maintain the status quo and probably some form of resistance to this injustice by people who feel exploited and oppressed. We are also likely to find that quite a lot of myth, culture and thought of the period, lends itself to legitimising the situation. 

The sort of history that we were taught at an English state school in the 1950s and 1960s, was about English Kings and Queens who were mainly of French, Norman, or German in origin. We were told really nothing about the lives of ordinary people. It was neither his-story or her-story, but the story of power and ruling elites. What they call history from below or labour history, came much later, with pioneering works like the 'Making of the English Working Class', by E.P. Thompson.

Warfare not Welfare says Streeting.

 

Labour's health minister, Wes Streeting, wants to cut welfare spending to increase defence spending. You might call it WARFARE NOT WELFARE. 

How did a pox doctors' clerk, like Wes Streeting, get into the Labour Party and rise through the ranks of the Labour Party? This Labour stalwart, entered British Labour politics, by a familiar route. A position within the National Union of Students (NUS), a stint working for a charity like Stonewall, and then as an errand boy for Peter Mandelson. You would hardly call that working at the coal face, would you? Streeting seems to believe that cutting welfare spending is the only way of increasing defence spending and you have to make the poor pay for it.

As most UK social security spending goes on state pensions, welfare cuts are likely to impact on the elderly. You could make the rich pay for it, or the Royal Family, or increase taxation, or crackdown on tax dodgers and tax exiles, but this so-called Labour man, doesn't seem to think that's a good idea. 

I think Streeting as just dashed any hopes that he may have of replacing Sir Keir Starmer-oid as the next Labour leader. 

How English is the Flag of St. George?

 

It probably never occurs to these so-called 'patriots', of Britain First, that the Flag of St George, was originally the ensign of the Republic of Genoa and is associated with Richard the Lionheart’s crusades in the 12th century. 

St George, a Roman soldier and Christian martyr, had a Palestinian mother and was from Cappadocia in what is today, modern-day Turkey. He certainly wasn't English and he became the patron saint of England in the 14th century, replacing St. Edmond, the original patron saint of England. 

During his ten-year reign, King Richard I, spent around six months in England and most of his time was spent in the Holy Land, France, or imprisoned in Austria and Germany, where he was being held for ransom. Although he was born in Oxford, he didn't really speak Old English and he probably didn't understand the language, or would have thought it beneath him to do so. It was the language of the English peasantry and it would be incomprehensible to most of us living today. 

Richard grew up in the Duchy of Aquitaine in France. He's known to have spoken a mix of French and Occitan and he saw England as a source of revenue.  Both his parents were French. His father King Henry II, was born in Le Mans, in France and his mother, Eleanor of Aquitaine, had been the Queen of France as she was previously married to King Louis VII of France.

Lear, Tolstoy and the Fool.

 

Tolstoy and Countess Tolstoy

I read George Orwell's essay 'Lear, Tolstoy and the Fool' (1947), many years ago. Orwell found it curious that Tolstoy, a Christian anarchist, would pick on King Lear specifically, and concluded that it was because Tolstoy saw something of King Lear in himself. 

Tolstoy tried to renounce much of his wealth and to escape his privileged position and to live the life of a peasant, but it didn't bring him happiness. Tolstoy's wife, Sophia, called her husband's disciples "riffraff" and they weren't keen on her. She said it wasn't easy having a genius for a husband but she also thought that Tolstoy didn't always live up to his own ideals, and wasn't a particularly good husband or father, to his children. The utopian communes that were inspired by the teachings of Tolstoy, weren't always a great success. 

William Shakespeare wasn't always popular in Britain, even though Tolstoy regarded him as having been universally popular. He was certainly popular in Elizabethan England but became less popular in the late 18th century and early 19th century, and then his popularity steadily increased afterwards. 

A good friend of mine used to say to me that the English know as much about Shakespeare as the French know about good French wine. What we know about the life of Shakespeare could be written on the back of a postage stamp, and some believe, that he didn't write all the plays. Yet, there's never been an English writer who has had as much influence on the English language or the English people as William Shakespeare. English people often use expressions and words coined by Shakespeare without even knowing it or realising it. 

Napoleon in Egypt.

 

Jaffa wasn't the only massacre carried out in Napoleon's Egyptian campaign of 1798. The French fleet was sunk by Nelson at Aboukir Bay leaving Napoleon stranded in Egypt. Napoleon had invaded Egypt to disrupt British trading routes in the Mediterranean. The French used beheadings, hostage-taking and village burning to secure its presence in Egypt.

When Cairo rose up against Napoleon, he ordered that all captured rebels should be beheaded and their corpses thrown into the Nile, where they would float past and terrorise the local population. Their heads were put in sacks, loaded on mules and dumped in piles in Ezbekyeh Square in central Cairo. 

Jaffa refused to surrender and the governor replied by displaying the head of Napoleon's messenger on the walls. Napoleon ordered that the walls be breached and thousands of French soldiers slaughtered the inhabitants. Some nine to ten thousand prisoners who were captured at Jaffa, were taken to the beach and massacred in cold blood. The French caught the plague off Jaffa's inhabitants who they raped and pillaged.

Napoleon abandoned his troops in Egypt to return to France. When the French general Jean-Baptiste Kleber discovered that Napoleon had left Egypt he called him "that Corsican runt" and told his staff, "That bugger has deserted us with his breeches full of shit. When we get back to Europe we'll rub his face in it." Kleber was denied the opportunity because he was stabbed to death in June 1800 by a 24-year-old student called Soliman. He was executed by having a pike driven into his rectum up to his breast. 

In the 60 battles that Napoleon fought, captured European soldiers were never treated like the inhabitants of Egypt. Today, Napoleon's Egyptian campaign is best remembered for the way in which archaeologists documented Egyptian artefacts in the twenty-one volumes of the 'Description de L' Egypte' and the discovery of the Rosetta Stone, which led to Jean-Francois Champollion, being able to crack the code of Egyptian hieroglyphs in 1822.

Charles Dickens.

 

Ellen Ternan

The celebrated English author, Charles Dickens, basically dumped his wife for a younger woman. If you've seen pictures of the young actress, Ellen Ternan, you can see why. Dickens thought his wife had given him too many children and he blamed his wife for that and did try to have her committed to an asylum for lunatics. He treated her terribly and some of his friends thought so. I believe that his children didn't know about Ellen Ternan until after his death. 

I have read fourteen of Dickens novels including Bleak House which is probably my favourite of his novels. Betrayal is a feature of that novel but I don't think you can sum up that novel as easily as that, because there's a lot more going on. The novel is certainly an attack on the English legal system. There's a woman who makes a cameo appearance in the novel called Ms Whisk, who Dickens says believes that the only way to improve the world is by "the emancipation of Women from the thraldom of her Tyrant Man." Mrs Jellyby is another interesting character. Most of her time is taken up by writing begging letters to try and raise charitable funds for a tribe who live in Borrioboola-Gha, a remote region of Africa. Dickens isn't very sympathetic to Mrs Jellyby or her efforts. I think it's his way of saying charity begins at home. 

The author Peter Ackroyd has described Dickens as an "egregious racist' but if he was, he was no different from many of his contemporaries, in Victorian England. In Victorian England, nobody used the term ‘racism’. Nevertheless, it's clear from reading Martin Chuzzlewit that he didn't care for negro slavery or the American's. He did come close to supporting the Confederate States in the American Civil War which he thought was more about dollars and cents than emancipating black slaves.

Is cultural fragmentation eroding social identity in Britain?

 

Daffron Williams

Daffron Williams, 41, from Tonypandy, in South Wales, pleaded guilty to inciting racial hatred when he appeared in court before Judge Tracey Lloyd Clarke in November 2024. He was sentenced to two years’ imprisonment; half to be spent in prison and the other half, to be spent on license. His comments and imagery that he posted on Facebook appeared to be aimed at inciting a 'civil war', but because he particularly targeted Asian Muslims, his actions were construed as inciting a race war. 

The ex-soldier, who is said to suffer from PTSD, is one of a substantial number of people who were jailed for comments made after the attack in Southport which left three young children dead. It's understandable that many people felt angry about the deaths of three children, but the perpetrator of this attack was not a Muslim or an illegal immigrant, so why were Muslims and asylum seekers, targeted by the mob, when the identity of the attacker was still not known? Many of those who were charged with inciting racial hatred, pleaded guilty to the charge when they appeared in court. 

As is often the case, hatred as its roots in fear, not simple antagonism. What many British people fear is cultural fragmentation and the erosion of their social identity and what they perceive as the Islamisation of Britain. This is often whipped up by far-right groups like Britain First who have their own political agenda or British politicians to further their own political ends. 

I think that relativist attitudes can also pose a danger. Some would have us believe that a man can be a woman and a woman can be a man. The current King of England Charles III, is not only the head of state, but also the head of the Church of England, but he wants to be the head of all faiths. In the U. S., "Trump derangement syndrome" is a backlash to these cultural conflicts. 

What has driven cultural fragmentation is identity politics, hyper-partisanship and culture wars. Since the mid-1970s, traditional class allegiances have weakened, while gender and ethnic identities have grown more insistent. Capitalism has a tendency to atomise people and turns them into consumers and commodities. Identity politics is less concerned with economic equality and redistribution and takes social-class out of the equation. We may be better educated today, but we have never been so devoid of collective beliefs. There has also been a decline in the quality of education in Britain. 

Levels of immigration, particularly illegal immigration into Britain, have also raised fears. Asylum seekers have been blamed for people not being able to get a dental or a GP appointment, a job, or an affordable rented home, when it has got more to do with government policy. 

Dentists have told me that they no longer take on NHS patients because they can't guarantee that they will get paid because there's only so much money being allocated for the treatment of NHS dental patients. You can get a sex change on the NHS but not treatment for toothache.

Following the COVID lockdown in March 2020, many GP practices stopped having walk-in appointments and surgeries and deliberately avoided face-to-face contact with their patients. Consequently, many people now find it extremely difficult to get to see a GP even though lock down restrictions ended years ago.

The fundamental problem the UK faces in relation to housing is one of supply and demand. The population of the UK has risen by about nine million in the last 20 years, largely as a result of immigration. Housing supply has not kept up. Measures that try to help potential home owners, but do not increase housing supply - such as stamp duty holidays or making it easier to obtain a mortgage - tend to raise house prices. Housing is more expensive today than at any time in the last 18 years. Home ownership rates for the under-35s have halved in the last 30 years and more young people are living longer with their parents.

The danger of toxic ideology.

 

There was a time when Roman Catholics were persecuted in Britain and there was a time when Protestants were persecuted in Britain. Many were burnt at the stake as heretics. I would call that extremist fundamentalism.

The vast majority of British people are not going to stand for the Islamisation of Britain. What many people fear is cultural fragmentation in Britain. We have a King who wants to be the head of all faiths when he's the head of the Church of England. You cannot have it both ways and this kind of relativism is dangerous. Britain is not a Muslim country even if many British citizens are Muslims. 

Many British citizens are Chinese but it seems curious that Muslims are particularly signalled out for opprobrium rather than other religious minority groups. The right-wing Conservative Douglas Murray, seems to be tar all Muslims with the same brush. The Muslim group known as Islamic State or Daesh, are a violent Salafi jihadist group, but we should bear in mind, that most of their victims in the Middle East, were Muslims and not westerners. 

Kaiser Wilhelm of Germany wanted to build a railway from Berlin to Baghdad and to get the support of the Arabs in Mesopotamia, he paid for the restoration of the tomb of Saladin. He told the Arabs that Germany would join a jihad against the infidels. 

What we should be wary of is toxic ideology no matter where it comes from. Ideology is often used as a mask to conceal vested interests and hidden agendas. 

The Gombeen Men of Reform UK.

 

Richard Tice

The Irish have a name for shady wheeler dealers like Nigel Farage. They call them 'Gombeen Men'. Billionaire's, tax dodgers, and Tory defectors, are the most unlikely candidates to make life better for the working class.

Nigel Farage, the leader of Reform UK, is a spiv and a speculator - a former public-school stockbroker. The deputy leader of Reform UK, Richard Tice, commutes between Skegness and Dubai where he lives with his tax exile girlfriend, Isabel Oakeshott. 

One of Reform UK's chief fund raisers is a convicted fraudster. Baby Face George Cottrell, 33, was arrested by the IRS in 2016 when he was visiting the U.S. with Farage and other prominent British Brexiteers. He was charged with 21 offences including money laundering, wire fraud, conspiracy and extortion. He pleaded guilty to one count of wire fraud in return for other charges being dropped and was released after serving an eight-month jail sentence in the U.S. A professional gambler, Cottrell was brought up on the island of Mustique and expelled from the exclusive Malvern College for illegal gambling.

Reform UK are the Alf Garnett's of British politics.

Reform UK's chief fundraiser is a convicted fraudster.

 

Baby Face George Cottrell

Baby Face George Cottrell (33), is a chief fundraiser for Reform UK and his very close to Nigel Farage. When on a trip to America with Nigel Farage and other prominent British Brexit people in 2016, Cottrell was arrested by the Inland Revenue Service (IRS) and charged with 21 counts including money laundering, wire fraud, conspiracy and extortion. He pleaded guilty to wire fraud in return for the other charges being dropped. He was released from a U.S. prison after serving eight months in jail.

As a schoolboy, Cottrell was expelled from the exclusive Malvern College for illegal gambling. He was raised on the island of Mustique and comes off an aristocratic English family. Cottrell seems to have made much of his money from professional gambling and speculations.

It has been reported that Cottrell made a great deal of money on speculating that Donald Trump would become the U.S. President. He also co-authored a book entitled "How to Launder Money." 

The legacy of Thatcherism.

 

Margaret Thatcher

I'm inclined to agree that everything that's shit in Britain today, stems from the Thatcher period, because I lived through that period and experienced it. It certainly became more difficult to get a job after she became PM. Privatizations, selling off the utilities, financial deregulation, the poll tax, deindustrialization, exporting jobs overseas, anti-union laws, all characterised 'Thatcherism'. 

A generation of young people were forced onto the YTS program and there were fewer apprenticeships. She wanted to privatize the NHS but she knew it would be political suicide for the Tories. Her government never really cracked down on the welfare state or people on state benefits. Many older workers, like redundant miners, were transferred onto Incapacity Benefit. It was George Osborne who said that New Labour had shown how cracking down on welfare claimants was popular with British voters. He said had they realised how popular it was, they would have done it during the Thatcher years.

The Tory grandees didn't always agree with Maggie and they looked down their nose at the greengrocer's daughter from Grantham. There were four people who had a lot of influence over Maggie Thatcher and they were Sir Keith Joseph, the economists Alan Walters and Friedrich von Hayek, and a former communist, called Alfred Sherman, who had fought in the Spanish Civil War. Hayek was never part of her government and neither was Sherman, but the former communist, was one of the early architects of what became known as "Thatcherism."

The unacceptable face of capitalism.

 

What is capitalism? A system of exploitation based on the theft of labour time. 

During the early years of the British capitalist industrial system, many young children were literally worked to death or killed in industrial accidents. The exploitation of children on this scale, was one of the most shameful events in Britain's history. 

Many English middle-class people of this period, including people in the church, suffered from an atrophy of conscience when it came to the conditions of the labouring classes. What underpinned it, was class hatred as was evident at the Peterloo Massacre in Manchester in August 1819. Many professional men remained oblivious to abuses that were taking place a few hundred yards from their gates. 

Religion functioned as a work discipline. Martin Luther preached a doctrine of submission to authority and Hazlitt, described the Methodists as "a collection of religious invalids." The Methodist was taught to "bear his cross of poverty and humiliation." V.E.H. Lecky said of Methodism: "A more appalling system of religious terrorism, one more fitted to unhinge a tottering intellect and to darken and embitter a sensitive nature, has seldom existed." 

The English historian, R.H. Tawney, wrote that the treatment of childhood and of poverty, are one of the two 'touchstones' which reveal "the true character of a social philosophy.'

Is Britain facing a recession because of the Israeli/U.S. bombing of Iran?

 

It's because of the Americans that Britain has been drawn into so many wars since WWII. They tried to drag us into the Vietnam war but Harold Wilson blocked it. 

Tony Blair lied us into going into war in Iraq and Afghanistan, when both countries, had nothing to do with 9/II. Blair told us that Saddam Hussain had WMD's and could attack Britain. It was all bullshit. 

The Israeli/American bombing of Iran is illegal under international law. The U.S. has not been under attack from Iran and is not acting in furtherance of a U.N. Security Council resolution. Despite this, Keir Starmer is allowing the Americans to fly B 52 bombers from RAF Fairford for "defensive purposes", when Donald Trump has said that he might continue to bomb Iran just for the fun of it.

When oil prices are spiralling and energy prices go through the roof, people won't find that funny. Higher oil prices are likely to lead to higher prices for all goods and services and will drive up the cost of living in both Britain and America. This will drive up inflation and lead to a rise in interest rates, making mortgages more expensive. It could also lead to a recession as firms go out of business.  

Although Britain is effectively an aircraft carrier for the Americans, Trump has been scathing in his criticism of both Britain and Keir Starmer. I think it's about time we told Trump to piss off.