Appraisal of the Public Disturbance in England, United Kingdom

Parliament was recalled from the summer recess yesterday to discuss the disturbance that took place over the last four nights in some major English cities.  The police and other emergency services were rightly praised, by both sides of the house, for the admirable and effective way in which they dealt with the situation and restored order.  They were also rightly critical of the criminals who perpetrated the disturbance and the looting and vandalism that took place.  Series of measures were announced to help the police and the justice system to do their job more effectively in dealing with the problem.  Measures were also announced to deal with the criminals.  Various proposals were suggested to understand the underlying reasons for the disturbance but these were not considered at the time.  These will hopefully be appropriately and fully discussed, debated and appraised in the weeks and months to come and addressed accordingly.  Praise was also given to the communities for their help in clearing the mess and restoring a sense of normality.  Unfortunately the vigilante stance some communities adopted was not condemned.


It is important to understand the underlying causes whether simple or not to be able to avert similar situations in future, and to restore  and instil public confidence.  I believe that the Rabbi who was on Chris Evans BBC Radio 2 show yesterday morning hit the nail on the head with the explanation that he gave for the kind of disturbances that we are experiencing.  And I think what he said explains the situation globally, whether it is in Britain, the Middle East, Africa or anywhere else in the world.  His explanation is that the [ultimate] value  society places on possessions accounts for many of the antisocial, disruptive and criminal behaviours that we endure on a daily basis.  This was reflected by a conservative Member of Parliament, during the parliamentary session today, when he referred to consumerism as the root cause of the ills of society that David Cameron, the prime minister alludes to.  But, Mr Cameron was more concerned about punishing the culprits of the  latest disorder rather than underlying reasons for their criminal behaviour.


There has been an intense emphasis and importance on values that involves money and possessions since the 1970s; and this emphasis has been above and beyond all other values.  This has led to consumerism and greed.  The latter being defined by most dictionaries as:


 "An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth". 

There are many examples of this in everyday life globally.  The parliamentary expenses problems that we faced recently can be attributed to greed.  Many of our sportsmen and women, people in music and film industry and industry in general use this as their modus operandi.  The bank crisis of 2008 and the global economic crisis, including the fragile and fluctuating stock markets, the recent News International debacle and the pressure put on Prime Minister Cameron to curtail the BBC as per James Murdoch's 2009 MacTagart lecture are all examples and the effects of greed.  The disturbances in the Middle East and the continent of Africa is also highly likely to be influenced by the same emphasis on greed as an important value of humanity.  People, therefore, are using all means available to them to achieve possessions whether foul or fair. There are also plenty of examples where this kind of behaviour is reinforced and rewarded.  These include bonuses, national honours and awards and public adoration.  However, the rewards depend on the social and economic background of the recipients and the context in which it has been achieved.  Some people fall foul of living up to these values and they engage in criminal activities from petty crime all the way up the criminal spectrum including the illegal drug industry. Criminals obviously have to be punished but should we not attempt to change society by revising the values we give so much importance to and may be in future avert these problems that has been created.   

Read my next post for some suggestions to remedy these ills.


Good Bye and Good Luck until the next time


Knight Owl 

London Burning

It is very disheartening, disturbing and distressing to see many areas of London ablaze.  Rioting and looting has also been taking place in many areas of London, Birmingham, Bristol, Nottingham and Liverpool. The last time such disturbance took place was the early to mid 1980s.  Whether these activities are a result of the politics of the day, political grievance or not, it certainly isn't pleasant and it is not a way of protesting.  These are criminal activities in whatever way they are described.  Although, it is understandable that many sectors of the community feel disenchanted with the austerity measures, and job prospects being extremely poor, particularly for young people.  These activities cannot be condoned and it is highly unlikely that it has anything to do with the shooting of Mark Duggan by the police in London.

It is also distressing to see how inadequate the police and particularly the fire service is.  In Croydon, a very large fire was being tackled by three fire engines.  Under normal circumstances there would have been at least a dozen fire engines if not more.  Many areas report lack of police and fire services.  There has been cutbacks in these services because of the austerity measures.  One hopes that the thin spread of services is due to the number of incidents rather that a lack in service personnel.

The political leaders are all returning back cutting short their summer holidays and emergency meetings are taking place across relevant ministerial departments to assess the extent of the problem and how best to resolve it.  Whatever has triggered these uprisings is not as simple as it seems.  Underlying all the discontent and the despicable behaviour lies predictors and precipitants that are complex and highly likely to be fuelled by the general economic downturn that is affecting most of society.  There is also a gap developing between the rich and poor.  While most middle and low earners and the unemployed are being squeezed, there are some whose affluence is increasing beyond belief.  This is evidenced by the profits of some major companies but even more so by publication of the rich list in the national papers.  Prominent politicians may have also inflamed the situation by stating that multicultural society in Britain has failed.  However, these cannot be used to promote crime.

Whatever the predictors and precipitants, we all have a responsibility.  First and foremost we must utterly condemn these act of criminality.  All of us rich and poor, affected and disaffected should work to resolve the problem together.  Let us not posture and  threaten each other. Let us communicate our grievances in a lawful and responsible manner.  This applies to all of us including the rioters, the communities, the businesses and the politicians.  We are all in some way responsible and we must act in a responsible way.  It is bad enough for the global economy to  be spiralling into decline.  It does affect all of us not only the investors.  We are literally in it together and we all have to unite to get out this mess.  Divisions and subdivisions will only create acrimony, disrepair and despair.  If you wish to protest, remember Mahatma Gandhi, peaceful protest is much more powerful than violence.

Good Bye and Good Luck until the next time and may peace and serenity be with you.

Knight Owl

Double Dip Recession or Depression?

The global economy continues on a downhill trend despite two years of severe austerity measures, increased taxation and low interest rates.  European countries such as Italy, Greece and Spain are relying heavily on being bailed out or face bankruptcy.  In the UK, we blamed the snow last December and April's Royal wedding for our GDP nosedive, although the Royal wedding was meant to boost our economy.  The US indecisiveness last week in agreeing an economic policy and now the stock market turmoil. Added to that we have the US rating downgrade by Standard and Poor from AAA to AA+.  Economists are calling for more austerity measures and further reduction in government spendings.

Jeff Macke, citing Peter Schiff, writes  "The Depression [in the wake of the financial crisis] was temporarily interrupted by a bunch of stimulus which ultimately weakened the economy further,"  He further suggests that  the government's response of stimulating is, probably going to lead to "a complete economic collapse."  I would agree that this was a knee jerk reaction in the sense that while the governments were trying to stimulate the recovery they were also stifling and strangling it by severe cutbacks in the public sector and tax increases.


We blame the governments for interrupting the economic growth because they are borrowing more.  We make lame excuses that there are no jobs because there is no recovery.  The problem is that there is no recovery because there are excessive job losses both in the private sector and the public sector.  In the private sector because there is insufficient stimulus, lack of funds or lack of investments because the investors are being encouraged to invest in China (as per Todd Schoenberger) and India.  In the public sector the belief is to improve the economy, as per eminent economists, we have to reduce public spending.  In addition, we are paying higher taxes either directly or indirectly.


The pitfall is no jobs, no jobs and no jobs, therefore, no recovery, no recovery and no recovery.  And down in the dark hole of depression we disappear unless somebody is brave enough to take the bull by the horn and stop the rut.  Europe is in disarray; the European Union is not working as one. Each country forming the EU is trying to protect itself. Germany and Angela Merkel is strong but for how long? One person needs to stand out and let's hope it's OBAMA.  Go Obama go, let's see what you are made of?


Good Bye and Good Luck until the next time.

Double Dip Recession?

Global stock markets take a nosedive again and its reported to be the worst for over two years or since the banking crisis of October 2008. The blame is apportioned to the European debt crisis and the faltering US economy. May it also just be an economic reality of modern  stock market  manipulation?

Over recent weeks price of gold has surged, and many companies have announced massive profits.  Share prices have also been steadily going up and the markets have been bullish. There are rumours from the investment world that hedge funders have sold heavily to make a quick return on their recent investments.  No fear, therefore, that they will be buying cheap again soon with a view to the next recessive dip when they take their profits.

Whether it is the European debt crisis and the faltering US economy or the hedge funders, the global governments are following economic policies that are bound to inhibit economic growth. In a time of excessive economic growth and increased affluence among the lower and middle earners this type of policy may be appropriate to stop the economic bubble from bursting.  However, in a time of recession this type of policy is wholly inappropriate. It will not only retain the current recession but also promote further dips along the way. The few rich will get richer and the majority low and middle earners will become poorer.

The policy must change and governments must take control of the situation.  Quantitative easing in real terms needs to be applied and spending power for the majority must be facilitated to promote growth. State expenditure must grow instead of being retracted. The State should be investing more in public services and at this moment in time we need big States instead of big societies. The private sector must also be helped to invest more through government support. Mr Gordon Brown, former Prime Minister of the UK was nearer the mark than what is currently happening.

What is needed is spending power for the vast majority instead of the few. For every dollar spent by the few rich people, at least a, million is spent by the majority lower/middle income earners; but they have to have it to spend it.  They are the people who keep the wheels of industry turning by working in it and buying from it. The others just oil the wheels.

What needs to be done, therefore, are tax incentives for the lower and middle earners and a reduction in value added tax for everyone, rich an poor, to promote spending.  What is needed is not a reduction in spending but an increase.  This was evidenced by the last British Government's reduction in VAT to 15%; the economy was actually growing in Britain.  The current Government policy has actually reversed that trend and the next set of figures are likely to show a negative growth factor. Wages also need to be going up to promote spending and fall when the economy starts to boom.  These can be achieved by increased government borrowings during this period of recession.

The economic policy must be reversed.  In times of recession we need higher wages and lower taxes and in times of  economic boom we need lower wages and higher taxes, and not vice versa. By doing so we shall prevent this continuous boom and bust trend.

Good Bye and Good Luck until the next time.

Knight Owl