A Farewell to Middle-earth

There was a tremendous swell of popular support for the 2013 Middle-earth Weekend held at and around Sarehole Mill on 11th and 12th of May. Despite the very mixed weather, the number of visitors appears to have been a record. So once again there would have been over 10,000 visits for the weekend as a whole, with people from near and far enjoying this traditional and old-fashioned family occasion.
The festival honours the life and work of JRR Tolkien within the area that inspired him during his early childhood. The weekend is planned and organised by volunteers with support from the City Park Rangers, The Shire Country Park Friends, The Tolkien Society, Harper-Collins Publishers, the Wildlife Trust for Birmingham and the Black Country and Birmingham City Council.
Volunteers, of whom many are needed over the weekend itself and also during the year in the detailed preparation, deserve full recognition - especially the dedicated prime movers Vivienne Wilkes and Stevie Prior. They have added so much to our cultural inheritance, the character of our area and our quality of life.
Alas, time marches on and as in so many areas volunteers get older and fewer and in these difficult times funds are also much harder to raise. So while the spirit of Tolkien’s Middle-earth will last for centuries to come, the 2013 Middle-earth Weekend will be the last of its kind. But there will also be many happy memories for individuals and families, a huge photographic record and many who were introduced to a lifelong love of Tolkien’s work.
Our heartfelt thanks once again to Viv, Stevie and the volunteers.

Economics of The Village

Austerity – that self-serving, miserable misconception of basic economics is predictably a dismal failure, producing a bleakness for the vast majority of people that would appeal to the creators of the woebegone TV series ‘The Village’.
The selves that austerity serves are the rich, the powerful and the influential - and of course their acolytes, sponsors and hirelings who, knowing that their lords and masters itch to get their doctrinaire knives into benefits for the less well off, will readily tell them that savage cuts for some are the way to produce growth.
The chancellor and his cronies also suffer a selective historical amnesia that blanks out the record of the national and international experience of the 1930s, which malign forgetfulness dooms all but the privileged few to relive it, in part or in whole. It also blanks out the policies that would put the country on the road to recovery as developed by John Maynard Keynes.
We’ve heard much about the government’s wish to re-do school syllabi yet again regardless of educational merit. But one thing that has become abundantly clear is that there is a strong case for teaching economic history in schools – and in induction programmes for chancellors.
We’ve also heard a former chancellor saying that the country should leave the EU. Of course this couldn’t be anything to do with his friends in the banks - perish the thought. I look forward to hearing what the leaders of productive industry say to this in view of the loss of their markets and because the only banks that are serving the community today are the food banks.
I understand that amazingly there is to be a second series of ‘The Village’ which to be true to its cheerless and despairing tone should miss out the more upbeat 1920s and go straight to the depressed 1930s. Perhaps the people who are writing this stuff are the same ones producing the government’s economic policy – the effects are pretty much the same.
New scriptwriters needed all round!

Getting away from the Dark Side

What alternatives are there to the depressing drag and the dark forces of austerity? The fact that there are likely to be no more well nigh useless tax cuts does not mean that all sensible options are closed. The negative economics of Darth Vader need not prevail!
But it is evident to almost everyone in this country - except of course the government - that more does need to be done urgently to save the economy. The alternative is continuing to bump along the bottom in the face of the widespread imposition of the Vaderian austerity that has spread like bird flu amongst gullible and subservient governments.
In the first place, no matter what LEPs say about enabling and agitating etc in yet more strategies supposed to produce growth, what is actually needed is real resources. These, and a government that is committed to providing them, rather than contradicting itself. It should be positive and get involved directly in projects that improve transport infrastructure, power generation and housing (but not just housing alone) to name but a few. But short of a booming directive from the sky this will not be happening with the present dark forces in Westminster. But there are other things that could be done if the will and the sense were there.
Returning to the positive power of a Keynesian position, I would like to draw attention once more to the concept of the ‘balanced budget multiplier’. This is where, in a broadly neutral overall financial context, spending power is moved towards those with a higher propensity to consume. In other words smaller deductions from the pay packets of lower income earners and higher taxes for the rich - and here I mean the seriously well-off - not the loyal, tax-paying middle classes picking up the bills again.
One way to achieve this would be to smooth out National Insurance contributions, making them a flat percentage of earnings with no limit on the range. Also, to achieve financial balance, the top rate of tax should go up from the recently reduced 45% rate back to where it was at 50%. Alongside this, the 10p rate could be reinstated.
If the flat rate of National Insurance contributions was set at a level that brought in a greater total this would free resources for increased support for manufacturing industry and public works projects. This would come out as around 7% so that the marginal take from the richest group would be 57%. This is less than the 60% that the wealthy were overjoyed to receive from Sir Geoffrey Howe and would be at the same level as in Sweden which has an enviable social market economy.
I doubt if there is a local Authority in the country that does not have ready to go engineering schemes especially after the impact of the prolonged winter on the roads that are thwarted by savage budget cuts and ever-increasing demands on the social care front. Two additional bands to council tax would add to the possibilities for investment without increasing borrowing.
And there are other fiscally neutral measures that could be taken both at local and national level. Here I refer to the procurement of goods and services. The Government must ensure that as much of its purchasing goes to domestic producers - from major defence or construction projects to the cars provided for ministers. Government departments must be made to see the bigger picture, with the negative impact of placing orders abroad far outweighing any saving on departmental budgets.
And there are ways of framing conditions for bids that would not contravene the letter of Euro legislation that can help domestic producers. You can be sure that certain other European countries do this - and more - already. The same goes for contracts from Local Authorities. There is a ‘multiplier’ of around 4, so that when a contract for, say, £250k is awarded to a local business, there is a total benefit of around £1m to the area as that firm and its employees spend and the beneficiaries of that spend also spend and so on.
So there is considerable policy latitude remaining – and I have not even mentioned the recreation of Municipal Banks! Perhaps it is just another forlorn hope, but maybe an element or two of this kind of effective and stimulating Keynesian thinking aligned with the force rather than the dark side of austerity will filter its way through even the Westminster bubble as the next general election approaches.

Still Bumping Along the Bottom

So the first estimate of the country’s Gross Domestic Product change in the first quarter of this year turned out to be  an increase of 0.3%. While this result is better than the 0.3% decline in GDP seen in the previous quarter, it merely brings us back to where we were six months ago - and indeed to about where the economy was 18 months ago. Flatlining or bumping along the bottom however you choose to put it.
But this small measure of growth is actually quite an achievement for the struggling economy (subject to any later revisions of this initial estimate) given the suffocating austerity imposed by the Government and the senseless policy that it undertook of cutting back on public investment. But what exactly is it that’s been growing? This is the question that I and others kept asking, to no avail, during the pre bust years, and we know how that turned out.
Mostly some kinds of ‘services’ fluffing up again I suspect - with a much more modest performance from manufacturing and other useful industry. There’s a limit to how much of each other’s washing we can keep taking in, or pay day loans that can be issued, or imported goods that can be moved through shops. So much for re-balancing the economy.
I trust that the Chancellor of the Exchequer is a reader of the Financial Times – a newspaper that’s not renowned for its left-of-centre credentials. In the recent weekend edition of the FT Mr Osborne would have seen articles with headlines such as: “Spending cuts hold back US growth”, “Spain – another year of recession” “US – the cuts begin to bite” and of course “United Kingdom – bumping along the bottom”.
Will the Chancellor take heed of these informed views on how real world rather than right wing textbook economies respond to cuts in hard times? I doubt it. But perhaps the impending visitation from the International Monetary Fund, that not-so-radical crew who recently downgraded their forecasts for UK economic growth for both this year and next will be more influential.
And if not the IMF, then perhaps Mr Osborne will feel obliged to take heed of the electorate’s views as reflected in the results of Thursday’s County and Unitary Council elections with a couple of mayoral contests and a parliamentary by-election to boot.
But I strongly suspect that any adverse outcomes in the realm of the much-despised Local Government will be rationalised away and the only views that count will be those of his political confederates. An increasing number of these chums seem to be getting impatient with their own likely electoral fortunes that are also, not surprisingly, still bumping along the bottom.
Such, alas, is the nature of what matters to government in Britain today with the consequences that all but the richest individuals and tax-dodging companies are experiencing.