I have been both a central banker and a market regulator. I now find myself questioning whether my early career, largely devoted to liberalising and deregulating banking and financial markets, was misguided. In short, I wonder whether I contributed – along with a countless others in regulation, banking, academia and politics – to a great misallocation of capital, distortion of markets and the impairment of the real economy. We permitted the banks to betray capital into â??hopelessly unproductive worksâ??, promoting their efforts with monetary laxity, regulatory forbearance and government tax incentives that marginalised investment in â??productive worksâ??. We permitted markets to become so fragmented by off-exchange trading and derivatives that they no longer perform the economically critical functions of capital/resource allocation and price discovery efficiently or transparently. The results have been serial bubbles – debt-financed speculative frenzy in real estate, investments and commoditiesâ?¦. While the problem is usually expressed as one of confidence, a more honest conclusion is that credit extended in the past has been employed unproductively and so will not be repaid according to the original terms. In other words, capital has been betrayed into unproductive works. The credit crunch today is not destroying capital but recognising that capital was destroyed by misallocation in the years of irrational exuberance. If that is so, then we are entering a spiral of debt deflation that will play out slowly for years to come.
London Banker
Every independent civil society organisation has a right to maintain its identity and mission
A coherent idea of discrimination requires a substantive account of justice, and that includes defining what legitimate rights individuals and organisations actually possess. All British citizens properly possess the prima facie individual right not to be discriminated against – in matters like employment, housing and social services – on grounds of race, gender or sexual orientation. This is because these involuntary markers of identity are completely irrelevant to such matters. I said “prima facie” because even here there exist widely recognised and uncontroversial exceptions, often arising from the rights of organisations. A rape crisis centre surely has the right to discriminate against men when hiring its counselling staff (perhaps any staff). An African-Caribbean community centre obviously can’t be compelled by law to hire a white guy like me as its director. The Labour party is evidently entitled to discriminate on ideological grounds in hiring its research staff. These are all examples of what the law calls a “genuine occupational requirement” (GOR). The idea is simple and compelling: every independent civil society organisation has a prima facie right to maintain its identity and mission by hiring staff who will support the distinctive purposes of the organisation and uphold its raison d’être. This isn’t a “privilege”, as is often tendentiously suggested, but merely a condition of meaningful self-government. Why then cry foul when religious organisations exercise their right to invoke the GOR provision? Why single them out and deny them the same rights enjoyed by others?
Jonathan Chaplin The Equality Bill must not be used to undermine the right of religious organisations to govern themselves
Jonathan Chaplin is director of the Kirby Laing Institute of Christian Ethics, which is related to Tyndale House, in Cambridge. We need an Institute of Christian Ethics, or even of Christian Theology and Ethics, in London. I think it should look something like this and hold conferences like this one.
Worship & Eucharist 1.1 Gathering – In One Place
1. The Church is gathered
Every Sunday morning Christians gather together in worship. What are they doing in Church? What is happening in these worship services? Why do they meet and pray and sing? We are going to look at what is going on in Church.
We go to Church. We are called together and we come together. We leave our homes and offices to join this gathering. We are roused out of our everyday existence, drawn away from our computer, car and sofa to join these people. On Sunday morning we leave home and journey through these streets in order to come together with all the other members of our Church. We get up the steps and into the church, go down the aisle and take our places next to each other.
As we arrive we start singing. Our service begins with a hymn or a song. We are a pilgrim people who sing on their way, and the first hymn is our song for the journey. We sing because we celebrate as we make our way to the house of God. The Lord has called us together and gathered us here. He has invited us so he is our host and we are his guests. As we journey out of our homes, down the pavement to church, we are drawn into this gathering and we are glad and so we sing songs of praise that anticipate our worship together. Anyone can come in listen and join in. The invitation is general, so every church service is public. The whole community around the Church knows that it can go. Imagine that the Church stands in the middle on marketplace, and that it has no walls, but takes place in the open air so everyone can watch and can hear what is going on, or they can keep their distance, as they wish.
There’s more here…
European meltdown?
The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point. If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung. Austria’s finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria’s GDP.”A failure rate of 10pc would lead to the collapse of the Austrian financial sector,” reported Der Standard in Vienna. Unfortunately, that is about to happen.The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. The Vienna press said Bank Austria and its Italian owner Unicredit face a “monetary Stalingrad” in the East. Mr Pröll tried to drum up support for his rescue package from EU finance ministers in Brussels last week. The idea was scotched by Germany’s Peer Steinbrück. Not our problem, he said. We’ll see about that. Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400bn this year, equal to a third of the region’s GDP. Good luck. The credit window has slammed shut. Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble.”This is the largest run on a currency in history,” said Mr Jen.
Whether it takes months, or just weeks, the world is going to discover that Europe’s financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus.
Ambrose Evans-Pritchard Failure to save East Europe will lead to worldwide meltdown
That set of rackets had a limited life span
Industrial economies are still at the mercy of peak oil. This basic fact of life means that we can’t expect the regular cyclical growth in productive activity that formed the baseline parameters for modern capital finance – meaning that we can’t run on revolving credit anymore because growth simply isn’t there to create real surplus wealth to pay down debt. The past 20 years we’ve seen the institutions of capital finance pretend to create growth where there is no growth by expanding financial casino games of chance and extracting profits, commissions, and bonuses from the management of these games – mortgage backed securities, collateralized debt obligations, credit default swaps, and all the rest of the tricks dreamed up as America’s industrial economy was shipped off to the Third World. But that set of rackets had a limited life span and they ran into a wall in October 2008. Since then it’s all come down to a shell game: hide the giant pea of defaulted debt under a giant walnut shell.
The sad truth of the matter is that we face the need to fundamentally restructure the way we live and what we do in North America, and probably along the lines of much more modest expectations, and with very different practical arrangements in everything from the very nature of work to household configurations, transportation, farming, capital formation, and the shape-and-scale of our settlements. This is not just a matter of re-tuning what we have now. It means letting go of much of it, especially our investments in suburbia and motoring – something that the American public still isn’t ready to face. They may never be ready to face this and that is why we may never make a successful transition to whatever the next economy is. Rather, we will undertake a campaign to sustain the unsustainable and sink into poverty and disorder as we fight over the table scraps of the old economy… and when the smoke clears nothing new will have been built.
James Howard Kunstler Forecast 2010
Christ the King
Jesus Christ is our king. That means that we have a good king, one who can do the job, actually the only one who can do the job. This king is there to protect us from the incursions and demands of those who want to exercise power without authority and who may be able to start doing us good but cannot keep it up. A king is simply a political leader. All leaders get their political authority from God, and God is the control and limit on them all. The world is full of undeclared chiefs, who want to make themselves our kings, without admitting as much, without allowing their power to become explicit or becoming accountable to us through the normal political channels. We Christians are here to remind all leaders that God commands them to act well for the people they have authority for, and that they will have to give an account of themselves, and will stand before that judge. All our political representatives are ‘kings’, ‘chiefs’: we don’t call them that, but that is how the bible regards them. Part of our job is to tell people and institutions who have effective power that with it they have authority to use it well, for the nation as a whole.
So now what about our own political classes? How are they doing? They exercise a form of kingly authority for us. Our government, from the smallest council employee to the prime minster, is the hand of God for us. We have to encourage them to govern, and tell them that they have a good and honourable task. We have to invite them to judge for themselves whether they are doing a good job. Each of them may and must carry out their office. They may do their job, at whatever point, high or low, in their particular institutional hierarchy, in the knowledge that they do it for us, for our good. This is their share in the kingly office of representative rule. They govern for the common good and so we encourage them to do this well, and we give them our thanks. We can remind them that we are here, and are watching, and that they will present their work to God, the only fair judge and true king.
Christ the King St George the Martyr 22 November 2009
Never hope to be employed in the state educational system
Thus the social market, as practiced in Europe, requires the state to step in and provide for those without work and to provide for the mothers of children who have no resident father. These are inevitable results of transferring the responsibility for charity from the community to the state, which is itself an inevitable result of the attempt to make a humane economy, rather than a humane society… The facts have been effectively documented by Charles Murray and others. And the result is clear: that Charles Murray and those like him could never hope to be employed in the state educational system in Europe and would be subject to official condemnation by any politician called upon to consider the matter. The state has externalized the costs of its â??social marketâ?? policies onto society, and the greater the costs, the more the state expands with fictitious plans to reduce them. Never has a better machine for expanding the rentier class of bureaucrats been devised than this one, which constantly amplifies the problem that it is established to solve. Hence, as educational achievement declines in Europe, state expenditure on education increasesâ??to the point where, in Britain, there are nearly two bureaucrats for every teacher, appointed to deal with the social problems that they themselves make a living by producing.
Roger Scruton The Journey Home Intercollegiate Review Spring 2009
The only serious philosophical question
A five step neo-Darwinian refutation of neo-Darwinism:
1. A person is, in Richard Dawkinsâ?? beautiful phrase, â??a geneâ??s way of making another geneâ??. So forget religion, forget values, forget ideals, its all about reproduction; handing on our genes to the next generation.
2. Europe today is the most secular region in the world.
3. Europe today is the only region in the world which is experiencing population decline. As you know, zero population growth â?? a stable population â?? requires an average of 2.1 children for every woman of child-bearing age in the population. Not one European country has anything like that rate today. Here are the 2004 figures: In the United Kingdom: 1.74, in the Netherlands: 1.73, Germany: 1.37, Italy: 1.33, Spain: 1.32 and Greece: 1.29.
4. Wherever you turn today anywhere in the world, and whether you look at the Jewish or Christian or Muslim communities, you will find the more religious the community, the larger, on average, are its families.
5. The major assault on religion today comes from the neo-Darwinians.
From which it follows, as night doth follow day, that if you are a true neo-Darwinian believer you want there to be as few neo-Darwinians as possible. QED.
Parenthood involves massive sacrifice: of money, attention, time and emotional energy. Where today, in European culture with its consumerism and its instant gratification â??because youâ??re worth itâ??, in that culture, where will you find space for the concept of sacrifice for the sake of generations not yet born? Europe, at least the indigenous population of Europe, is dying, exactly as Polybius said about ancient Greece in the third pre-Christian century. The century that is intellectually the closest to our own â?? the century of the sceptics and the epicureans and the cynics. Polybius wrote this:
The fact is, that the people of Hellas had entered upon the false path of ostentation, avarice and laziness, and were therefore becoming unwilling to marry, or if they did marry, to bring up the children born to them; the majority were only willing to bring up at most one or two.
That is why Greece died. That is where Europe is today. Now, that is one of the un-sayable truths of our time. We are undergoing the moral equivalent of climate change and no one is talking about it. The only serious philosophical question is â??Why should I have a child?â??
Chief Rabbi Jonathan Sachs
The White Swan Formula
James Featherby is calling for Christian responses to the Credit Crunch
The structure of the banking and financial markets are complex, and the transactions within it equally so. This often calls for nuanced judgement calls to be made between a variety of issues and the balancing of one set of competing duties against another. It is difficult to discern the moral issues involved. It can be even more difficult to weigh the competing issues once they have been identified.
The whole gamut of human weakness has contributed to the credit crunch. This includes much that is morally culpable, but also much that is not. Simple lack of knowledge and foresight has been a major factor.
Filling the values gap is not the only answer on offer, and many will not see it as the solution. We will need to compete with the other remedies on offer. I would suggest that we need to do three things:
• First, rediscover God’s values in the areas of economics, business, personal finance and consumption.
• Second, rediscover our confidence in these values as being best for us, our neighbours and our children.
• Third, find the right ‘voice’ to communicate these values – a voice that offers life and not condemnation.
The credit crunch has delivered a profound shock to the foundations upon which the Western economic model was built. But will our financial institutions and governments simply weather the storm, make few minor regulatory adjustments and carry on as before? Can we take this perhaps once in a generation opportunity to consider the values that drive the system and reflect on what values should be driving the system?
James Featherby has produced the pithy twenty-page The White Swan Formula (PDF 2.9 MB)
F?rst, let us not rush past the moment in which we now stand. We will not learn lessons unless we engage fully with the consequences of our mistakes. A key part of that is a proper engagement with the pain caused by our shortcomings.
For too long, for example, the f?nancial community has denied responsibility for the effects of the capital that it raises and allocates. So let us pause and recognise the personal and f?nancial pain, close at hand and further af?eld, caused by this crisis.
Second, we must determine to understand and apply these values ourselves.
Unless we personally seek to serve, rather than be served, we will simply be hypocrites, and our arguments will remain hollow. Each of us needs to believe that these values work in practice for us individually, as well as for others, and then act accordingly. We need, quite literally, to put our money where our mouth is.
Third, we can join the debate and make our contribution. Everywhere the question is being asked ‘What sort of economy do we want?’ Let us engage in the discussion. We must not be satisf?ed with conventional wisdom that says change cannot happen. It is better to blow the trumpet beforehand than reach for the whistle afterwards. Let us be for something, not just against something. One can never tell when the tipping point of opinion will be reached, and without the last straw the camel’s back remains intact.
The discussion is needed on multiple levels… Let us also look long and hard at solutions to the current crisis that simply try to return things to how they were, at least for those of us in the West, by borrowing more and saddling the next generation with the burden of paying the price that we decided not to bear ourselves.
Yup, but will talk about values do it? Or will it require processes of public judgment and public repentance which is, I think, what is meant by ‘engage fully with the consequences of our mistakes’ and ‘proper engagement with the pain caused by our shortcomings’?
Superstate
If this constitution comes into force, the EU will be changed, unalterably and for ever, into a wholly new entity: a 27-nation superstate with no democratic legitimacy which will nevertheless rule our lives – and, in all probability, with Tony Blair as its President. It would be beyond intolerable if, at the very moment that the British electorate finally voted out the government he led and consigned Blairism to the bin, the man who did so much damage to Britain as its Prime Minister should be shoehorned into a post which makes him the effective ruler of this country. For if this constitution comes into effect, Britain and the other EU member states will no longer be self-governing nations. Foreign policy, defence, social, economic and welfare policies, immigration, internal security — every national interest will be subordinated to this new anti-democratic entity. As such, ‘President’ Blair would be committing the single most treacherous act of all towards his own country — taking away its own democratic power of self-government.
Melanie Phillips President Blair
