Monthly archives: December 2014


World Oil Politics

The fall in the oil price is a bad thing in that it makes hydrocarbons more attractive against renewables, although on the timescale that investment decisions in energy production are taken, it would have to be sustained a great deal longer to have a major impact.

Contrary to popular myth, the fall has not been caused by Saudi Arabia cranking up production on behalf of the United States to damage Russia. Hydrocarbon supply has increased, while the increase in demand has been slower than expected. The United States itself has been responsible for a significant part of the production increase, though it is from a number of diverse sources. What Saudi Arabia has not done is play the role of market regulator by cutting back production to stabilise the price.

If you wish to see a target of Saudi inaction, it is the United States, not Russia. The single largest increase in hydrocarbon production in recent years has come through fracking in the United States. Fracking is high cost, and the fracking frenzy in the USA was built on a mound of corporate debt. Nobody would have initiated a fracking investment with oil under $70 a barrel. A few deep sea operations aside, no producers are hurt more than US frackers by the current oil price. The Saudis are enjoying watching the Americans fall on their arse.

As for Russia, I have explained repeatedly that it is a developing country economy dependent on raw commodity export. I am willing to wager that we will find that in 2014 the total GDP of Russia fell below that of Spain. Oil is not the only commodity price that is struggling. Putin has complacently presided over an astonishingly undiversified economy of which the key markers are raw commodity export, very narrow distribution of wealth from that raw commodity export, capital flight of 80% of the profit from that raw commodity export, and a consequent crippling investment shortage. The pretend sanctions “imposed” on Russia are responsible for almost none of the economic pain Russia is now suffering. Russia’s lack of value-adding industrial base and capital incontinence is coming home to roost.

I can’t finish this survey of oil politics without noting the appalling decision of the United Kingdom to open a naval base in Bahrain to service aircraft carriers. This crazed neo-imperial venture by a struggling economy is shameful. An aircraft carrier has no defensive purpose. Its entire rationale is the projection of airpower into foreign countries. That, after the total disaster of Middle East policy in the last decade, the United Kingdom is still seeking to project air power in the Middle East is horrifying. Furthermore, when we are supposedly trying to reach an agreement with Iran on its nuclear programme, it is incredibly provocative to open a major forward western
base almost within eyesight of Iran. Lastly, of course, Bahrain has a brutal dictatorial regime that has been murdering and torturing its majority Shia population for decades, with both open and covert British support. Britain’s callous action is a kick in the teeth for anybody who believes that human rights has a role to play in foreign policy.

The sooner we break up the United Kingdom the better. It really is a force for evil in the world.

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Part of the Union

Labour voters are switching straight to Tory as second preference and Tory straight to Labour in Scottish local government by-elections held under the STV system. These are not opinion polls, they are real elections.

I was shown results and transfer sheets yesterday in the margin of the SNP vetting assessment of potential candidates which I was attending. Unfortunately I did not have a chance to copy down the figures, but the pattern was clear.

For those unfamiliar with single transferable vote, you mark the ballot paper 1,2,3 in the order you prefer the candidates. What is now becoming clear is that Labour voters tend to put the Tories at 2, and Tories put Labour as 2. I have been arguing for years that there are no significant policy differences between Labour and Tory – it is a fake choice. I will never forget at the count in Clackmannan the Labour and Tory councillors and their wives all celebrating together, all looking well-heeled and arrogant and entitled, impossible to tell apart.

That the few remaining Labour voters put the Tories as second preference, instead of the Greens, SNP or Liberal Democrat, shows that the core Labour support base is largely Blairite. Which explains why the ultra-Blairite Jim Murphy, scion of the far right Henry Jackson Society, is set to become Labour Party leader in Scotland. It is also interesting that Tory voters are happy to give second preferences to Labour, recognising that Ed Balls, Yvette Cooper, Tess Jowell and Harriet Harman – every one a millionaire – are doughty protectors of the rich and the established order.

I haven’t been able to find a website that records local byelection results including the transfers – some results are listed on politicalbetting.com but only give the final result after all transfers. If anyone can find the data online I would be grateful. I should love to see an analysis from James Kelly on this one.

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You Couldn’t Make It Up

Tony Blair names Henry Kissinger as his role model. Honestly, not kidding. It is of course literally true, as they were both responsible for the deaths of hundreds of thousands through neo-colonial war. What a pity he forgot to mention it when he stood for leadership of the Labour Party. On the other hand, it is the sort of thing Jim Murphy of the Henry Jackson Society is quite open about, and it doesn’t seem to hurt his career prospects either.

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Why Should We Be Beggars?

There is a great campaign song from the 1890’s, of which the chorus goes

The Land! The Land!
‘Twas God who made the Land
The Land! The Land!
The ground on which we stand
Why should we be beggars
With the Ballot in our hand?
God gave the Land to the People!

That key question – why should we be beggars with the ballot in our hand? – was the fundamental driver of the Yes campaign in the Scottish referendum. The answer is, of course, the beggary remains because our corporate masters are enabled to buy off a small but significant minority of the less poor and then brainwash or terrify enough others through their control of mass communication. But so many people are now wondering how on earth we have beggary in a land of so many billionaires, that the question is refusing to go away.

The song above was the anthem of Henry George’s land movement, and it has resonance today. I found land ownership the most passionate of subjects in the referendum campaign. It was as strongly felt in urban communities of Dundee as in the Highlands. There is an excellent article on the subject by George Monbiot today. It ought to be as important in London as in Scotland. The extreme wealth of the Westminster and other London inherited estates ought not be tolerated in a modern society.

I too applaud the Scottish government’s courage in tackling the issue. I wish, however, they had been a bit more bold. That business rate exemption was ever given to sporting estates, by both Tories and Labour, is an abomination. Of course the rate must be imposed. The truth is, much of the Highlands historically supported a greater population than it does now, and there is much land unused that can produce root crops and cattle. The aid for crofting communities acquiring land is also welcome, but should be backed by firm compulsion.

The proposals to end primogeniture may break up large estates over time, but I confess to being not greatly excited by progress measured in half centuries. The major answer should lie in two well understood taxes: inheritance tax and land value tax. I would favour 20% inheritance tax on all estate value above 500,000, 50% on all value above 1 million and 80% on all value above 5 million, with no exemptions or gifting and beneficial ownership ruthlessly traced.

On Land Value Tax, I am particularly attracted by a residency test. LVT should be quadrupled for non-residents, with residence defined as where you pay your income tax. In an independent Scotland, that would sort out a great deal of the problem pretty fast.

Simply repealing the Inclosure Acts would perhaps have difficult ramifications, where the original beneficiaries’ estates have sold land on to become eventually, for example, individual residential plots. But revisiting the Inclosure Acts is a weapon we should not forego when looking at problems like the Buccleuch or Grosvenor Estates. Though for the major aristocratic estates I would favour straightforward nationalisation.

The Establishment, Conservative, Labour and Liberal, have re-introduced the appalling notion of the “undeserving poor”. It is time for action against the undeserving rich.

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Rusbridger The Worst Editor in the World Part 97

One war criminal writing about another. Nice chums you have, Rusbridger*.

For once there was something worth reading in the Guardian, an article by my friend Coleen Rowley. But the Guardian cut out the most important paragraph in the article. As Coleen put it in an email:

Unfortunately, the paper edited out the politically incorrect paragraph pointing out that the British Parliament committee inquiry totally ignored why Islamic terrorist recruitment is rising exponentially. So an even more important opinion piece needs to be written as to the factor swelling the numbers joining and affiliating with “terrorist” groups. Although the two issues are related as people’s naïve belief in the national security complex’s magical data-mining serves as cover to keep the more important debate from happening. Similar to Helen Thomas’ politically incorrect question: “why do they hate us?” or put more gently: “why can’t our bombs and exceptionalism win hearts and minds?” No longer will anyone in mainstream even ask if the US-NATO-Israel’s reliance on perpetual war, drone assassination and regime changes is working to reduce terrorism. I fear the Guardian would be unlikely to publish such an op-ed but it needs to be attempted nonetheless.

*By appointment to Her Majesty the Queen, smasher of hard drives

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Iranian Opportunity

Israel has been an apartheid state for a long time, but its cabinet is now promoting legislation that makes it impossible for even its most ardent supporters to deny that fact. With the cumulative effect of continuing land-grab and intermittent horrific attacks on Gaza, the climate of international public opinion has never been so resolutely opposed to Israel’s actions.

Iran had a tremendous opportunity to make a fundamental shift of the political balance in the Middle East through concessions on its nuclear programme. For Iranian sanctions to end just as Israel determinedly outrages the world, could change the geo-political game significantly. On any objective measure, the economic gains from ending sanctions vastly outweigh any possible economic gains from nuclear energy. I have always argued that nuclear power is a ridiculously complex, dangerous, and extravagantly expensive way to boil water. That is all it actually does, boil water to drive a steam turbine. Iran’s pig-headed insistence that its “right” to this crazed technology is much more important than the economic welfare of its people, is gesture politics of the worst kind.

Iran has undoubtedly improved, but remains a theocratic state with an appalling human rights record, where the persecution of gays is particularly horrifying. There are only two countries in the world with systems of government so appalling as to have seats reserved for clerics in the legislature. One is Iran. The other is the United Kingdom.

I can understand why, under continued neo-con and Israeli threat, retaining the option of developing a nuclear weapon has seemed attractive to Iran. It remains a gross hypocrisy that Israel suffers no sanctions for its large nuclear arsenal, while Iran suffers sanctions for the possibility it might one day start to develop one. Nonetheless I oppose the holding of weapons of mass destruction anywhere, including Iran. The unfortunate fact is that President Rouhani remains subservient to Ayotollah Khameini, and thus a golden opportunity for Iran may be missed.

It is also interesting that the latest round of talks in Vienna did not receive the breathless coverage of earlier rounds, despite their critical importance. There is a curious lethargy in the international community’s approach to the talks. That was for two reasons.

Firstly Obama is now a lame duck President. While impending full Republican control of both houses ought to be a reason to push things through quickly, Obama is wary of expending too much of his tiny remaining store of political capital in yet more conflict with Netanyahu.

The second reason is oil. With oil prices already much fallen, many of the participants are wary of releasing a flood of Iranian oil on to the market by ending sanctions. This especially affected the Russian attitude. In past talks, Russia has played a brilliant hand, with their offers to take effective control of Iranian enrichment technology having stymied an earlier Israeli-stoked Western appetite for conflict. A talks insider told me that this time, while previous offers were not withdrawn, Lavrov was far less prominent and active and no new Russian initiatives were forthcoming. Russia really does not need a further drop in the oil price right now.

I remain hopeful that Iran will realise that there is a huge opportunity here. If Iran tactically backs down on its nuclear programme in the current circumstances, that will not be a defeat for Iran but a defeat for the neo-cons.

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