Idag blev jag uppringd av en man som pratade på engelska med en indisk brytning. Han uppgav sig att ringa från “Microsoft Technical Department” och varnade mig att min dator hade skickat varningar till Microsoft att den var infekterad med skadlig programvara. Han ville få mig att sätta på datorn så att han kunde visa mig hur man skulle åtgärda problemet. Han visste mitt namn. Lyckligtvis blev jag misstänksam och hann inte ge ut någon information.

Jag är inte alls ensam om det här – dessa skojare har ringt många svenskar. När jag ringde Telia sa den mycket hjälpsamma kvinnan som svarade att hon hade själv blivit uppringd av samma människor (dock i hennes fall en kvinna med indisk brytning). Polisen har också fått in många anmälan.

Enligt brittiska tidningen The Guardian är det ett mycket välorganiserat verksamhet som drivs från callcenters i Kolkata:

An investigation by the Guardian has established that this scam, which has been going on quietly since 2008 but has abruptly grown in scale this year, is being run from call centres based in Kolkata, by teams believed to have access to sales databases from computer and software companies.

Var därför inte förvånad om de kan ditt namn, ditt Windows registreringsnummer eller annat personligt information.

Vad ska du göra om du har blivit uppringd?

• Anmäl det till Polisen genom att ringa 11414 – även om du lade på luren utan att ge dem någon information eller gå in på någon webbsida. Rubriceringen är försök till dataintrång.
• Om din telefon visade det nummer de ringde ifrån, notera det och undvik att svara på samtal från samma nummer. Ge också numret till Polisen.
• Ring inte tillbaka – de brukar använda amerikansk nummer. Dessutom gäller principen att man ska inte mata troll.
• Om du följde deras instruktioner (t.ex. gick in på en webbsida), kontrollera din dator för eventuell skadlig kod omedelbart. Om du har betalat för något, kontakta din bank och spärra ditt kort.
• Om de uppgav en webbsida som du skulle besöka, informera Polisen om webbadressen. Webbhotell stänger ned webbsidor som används i kriminellt syfte.

Ett gott råd som jag vidarebefordrar från Telia är att helt enkelt lägga på luren så fort du förstår att de försöker lura dig. Enligt kommentarer på Microsofts forum kan de bli aggressiva och otrevliga om du försöker säga ifrån. Kvinnan från Telia blev uppringd åtta dagar i rad, men eftersom hon slutade svara efter det första samtalet tröttnade de och slutade ringa henne.

Kom alltid ihåg att Microsoft är ett enormt företag som skulle aldrig ringa upp en kund för att berätta om något säkerhetsproblem även om de ville göra det. Dessutom har de en policy att aldrig ringa upp någon som inte har själv kontaktat Microsoft först.

Clearly many people in Britain seem to expect that a politician should resign for having taken a Class A drug, even if it was some time before they entered elected office. (Guido certainly seems to be salivating.) What is certainly a resigning offence is fraudulently claiming expenses you are not entitled to as a parliamentarian. So how does this criminal offence measure up against possessing a Class A drug?

Well, Lords Taylor and Hanningfield were sentenced to a year and nine months imprisonment respectively for fradulently claiming over £10,000 each. Both have now been sent home with electronic tags, having served a quarter of their sentences.

In comparison, the sentences for possession of a Class A drug range are a large fine or six months to seven years imprisonment. According to CPS sentencing guidelines “There will be very many cases where deprivation of liberty is both proper and expedient.”

As Mark points out, the maximum sentence for possession of Class A drugs (seven years) is the same as that for armed robbery of a small business. Indeed, wounding or inflicting serious bodily harm when “particularly grave injury or disfigurement results from a pre-meditated assault where a weapon has been used” has a sentencing range of two-four years imprisonment. Do our politicians really mean that possession (for personal use only) of cocaine can be a more serious offence that robbing a newsagent at knifepoint or smashing someone’s face up with a knuckleduster?

I don’t know about you, but if I was viciously attacked and left with a limp and scars for life I would feel rather miffed if a spoiled brat caught with some cocaine got a longer sentence than my attacker.

Samma regel gäller i Sverige sedan april 2010, då Socialstyrelsen gjorde helt om och lättade på sina tidigare omotiverat hårda restriktioner. (LUF och dess dåvarande ordförande Frida Metso hade protesterat mot dessa för några år sen.)

Jag undrar ibland varför medicinsk bevisning inte delas bättre mellan myndigheter i olika länder. De rön som gjorde att Socialstyrelsen ändrade sig kunde också ha motiverat ett liknande beslut i Storbritannien utan onödig dubbelarbete. Det är dags för politiker och tjänstemän att titta utanför landets gränser lite mer.

For a start, he could think about early implementation of the coalition’s plans to raise the personal allowance to £10,000, helping those earning the minimum wage, who are not only feeling the effect of the squeeze on living standards, but who often pay the highest marginal tax rates in the first place. As the Financial Times has previously argued, both property and carbon are under-taxed relative to income in the UK, so these are two areas the chancellor can look to to raise the necessary revenue for such a move.

You can read the whole letter on Nick Thornsby’s blog or on the FT website (free registration required).

My letter was printed in the European edition and was a response to Tim Congdon et al’s letter defending quantitative easing (QE). As I pointed out, Congdon’s own argument relies on banks to act as the transmission mechanism between the Bank of England and the economy – a tranmission mechanism that is distinctly subpar at the moment:

Sir, Tim Congdon et al are quite right to stress that broad money supply (M4 in the UK) is more economically significant than central bank money (Letters, September 1). But, contrary to their opinion, this is an argument against using quantitative easing to boost the faltering economic recovery.

Since the Bank of England announced its programme of QE in March 2009 annual growth of M4 (excluding intermediate financial institutions) has actually fallen from about 4 per cent in the beginning of 2009 to 2 per cent now.

The responsibility for this lies with the commercial banks: their reserves at the Bank of England are now more than three times larger than before QE was announced. In other words, of the £200bn created through asset purchases, £87bn has been hoarded.*

Expecting further QE to revive the economy would be like trying to inflate a bouncy castle through a leaky tube: it will never get very bouncy.

There is also little evidence that the impact of QE on the financial markets has stimulated investment or consumption. Most of the liquidity created by QE seems to have ended up invested in government bonds and gold, rather than equities. When UK companies are not even investing their surplus cash the fact that long-term interest rates have fallen is surely irrelevant to their investment decisions.

Waiting for QE to stimulate the real economy seems to be like waiting for Godot. QE will not produce economic growth until the broken transmission mechanism is fixed. Banks are paralysed by fears of further credit losses and sovereign debt crises, and companies see few profitable investment opportunities. Policymakers should address these problems before they fiddle with the money supply.

Well done to Nick, and fingers crossed that the powers that be take some notice….

*Source: Bank of England statistics. Bank reserves from series
LPMBL22: February 2009: £39,467 million; July 2011: £127,196 million.

Nick Clegg speaking at the rally at Lib Dem Spring Conference, 2008. CC BY-ND Liberal Democrats/Alex Folkes

Few things on the internet are as frustrating as a broken link to something you would like to read. This sad fate has befallen many of Nick Clegg’s early speeches, so I thought I could provide a useful service by digging them out from the Wayback Machine and posting them on my blog.

I joined the Lib Dems in October 2007, just before Menzies Campbell announced his resignation as Leader. During the leadership campaign I was impressed by Nick Clegg’s speeches, which seemed to me to engage with liberalism as an ideology. I still think those speeches are worth reading, both for that reason and because they are a document of how Nick thought before the 2010 general election and the Coalition that followed.

The first speech in the archive is also Nick’s first speech as party leader, given to a one-day member’s conference called in London in January 2008 to discuss what the Lib Dem policy on public services should be in the next election. In it Nick argued for empowering citizens through opening up the provision of public services, such as by allowing free schools. While this policy was heavily watered down in the party’s internal decisionmaking and is now (ironically) being implemented by a Conservative government minister, Nick’s demand that state funding of services should be focused on attacking inequalities is now part of Lib Dem and Coalition policy as the Pupil Premium.

The speech made quite a splash in the media and the blogosphere at the time, as this useful link post by Paul Walter shows. Andy Strange wrote a perceptive post about the speech and the manifesto conference as a whole (which happened to be the first federal party event I attended). It’s interesting to revisit these responses in the light of what has happened since.

Please don’t hesitate to comment here or contact me if you would like to see any particular speech of Nick’s in the archive. I will be adding speeches from time to time, so please subscribe to the blog to be the first to see the new additions.

Nick Clegg visits Mount Stuart Primary School, Cardiff, 31 January 2008. CC BY-ND Liberal Democrats/Alex Folkes

Speech by Nick Clegg at the Liberal Democrats’ Manifesto Conference, 12 January 2008

Today is a crucial step in the creation of a new liberal manifesto for Britain.

Gordon Brown’s bottling of the autumn election has handed us a tremendous opportunity – time to think, to discuss – and to listen to the British people.

So that our next manifesto genuinely offers the change Britain wants, and needs.

I want our manifesto to be bolder, clearer, and stronger, than ever before.

Our ambition must be to break apart forever the two-party system that has corroded British political life for too long.

Our ambition must be to make Britain the liberal country the British people want it to be.

So I’m starting today by setting out some ideas on our public services.

We should never advocate change for the sake of it. But neither should we just be defenders of the status quo, and under my leadership we will not be.

We are the only radical force in British politics.

We must be the champions of new ideas: new ideas that will make our public services fairer, better – more liberal.

As 2008 begins, we stand at a political crossroads.

Gordon Brown’s government, barely six months old, already feels tired. More 10 year plans. More knee-jerk legislation. More command-and-control from a Government that really believes the Man from the Ministry knows best.

Tony Blair’s reform agenda was deeply flawed – timid in parts, misguided in others. But under Brown – there is no reform agenda at all. He’s quietly burying many of his predecessor’s policies without spelling out what comes next.

David Cameron hopes to persuade us that his party is changing. But among the mixed messages and half-promises, it seems to me their instincts on the big issues haven’t changed a bit.

They claim to care about poor families – but their only spending commitment is still a tax cut for the richest people in the country. They still want to use the tax system to make moral judgements about whether people should get married or not. They’re still devoted to school selection. They’re still focused on escape routes for the lucky few – not real opportunities for the many. So much for social mobility.

So there’s a gap in politics for a strong, progressive, liberal voice. We must fill it. And make the public services agenda, our agenda.

But that means we need to challenge ourselves as much as we challenge others.

We have long advocated more money and more local control. With good reason too – ten years ago we were right to identify the crisis of underinvestment in our public services. We are right to condemn the pattern of over-centralisation in Britain.

But times change. The last ten years has shown that money isn’t everything. The big questions now are these: how do we make Britain a fairer place without raising the overall tax burden? How do we promote real social mobility without relying on the discredited politics of Big Government? In seeking to make Britain fairer, we need to stop just asking “how much”, and to start thinking hard about “how”.

Marrying our proud traditions of economic and social liberalism, refusing to accept that one comes at the cost of the other. On that point, if not all others, the controversial Orange Book in 2004 was surely right.

This also means embracing a wider understanding of empowerment: not just of local authorities and politicians, desirable though that is, but of pupils, patients and parents too.

Individual power must be an everyday thing, not just reserved for the moment a vote is cast in the ballot box.

I want this to be a year of thinking daringly for the Liberal Democrats.

It speaks volumes about the Government’s record that Britain is still the sick man of Europe when it comes to public services. We must look to Europe, to Canada, to New Zealand and beyond, to find ways of improving our schools, hospitals and transport.

Be under no illusion: if we do not shape the debate on the future of our public services in our own image, we will be squeezed to the sidelines of British politics and frozen out of the public debate.

There are two crucial dividing lines in British politics. First – the dividing line between progressives and conservatives – between those who believe in tackling inherited disadvantage and removing the scars of poverty, and those who don’t. And second – the dividing line that splits liberals from the advocates of big government solutions – a dividing line that splits the progressive cause.

Our party will always be on the progressive side of the argument. No-one in this room believes it’s acceptable that in Britain today your chances in life are more determined by your parents’ income than anywhere else in the developed world. That a poor but bright child is now overtaken at school by a less bright but richer child by the age of seven. That if a child born in the poorest ward in Sheffield will die a full fourteen years earlier than a child born in the richest ward a few miles away.

The split within the progressive cause is not about whether we wish to overcome social injustice, but how we want to overcome it. Socialism believes that Government knows best. Liberalism believes people know best.

As John Stuart Mill warned in 1859: “A state which dwarfs its men…even for beneficial purposes, will find that with small men no great things can be accomplished.”

Gordon Brown may have rejected the old nationalization which put the commanding heights of industry into government hands. But he still believes that command and control from the centre is the answer to the problems of public services and social justice. In place of nationalized industries we have nationalised education, nationalised health, and nationalised welfare: run by inflexible, centralised monopolies. It adds up to the nationalisation of our whole lives.

Just earlier this week, he was designing a “deep clean” initiative for every hospital in the country. What next? A central Government “lights out” policy telling all patients when to go to sleep?

By contrast, I stand for these simple principles:

The state must intervene to allocate money on a fair basis.

The state must intervene to guarantee equality of access in our schools and hospitals.

And the state must oversee core standards and entitlements.

But once those building blocks are in place, the state must back off and allow the genius of grassroots innovation, diversity and experimentation to take off in providing an array of top-class schools and hospitals. This alchemy of clear but circumscribed central direction combined with liberalised bottom-up provision is exactly what underpins the best health and school systems in Europe, and the world.

So we must challenge monopolies. Give real power and responsibility to people who use public services and people who work in them. And change those services so they’re human in scale and personal in nature – bringing an end to the faceless bureaucracies that alienate and confuse us all.

Let me give you a sense of the direction I want us to take. The first step is to scale back the vast monster of Whitehall. Whitehall should get out of the business of the day to day running of public services in Britain. That strategy doesn’t work.

We will draw up plans for radically shrinking the size of all our public service departments – to re-focus them on setting broad objectives for the local agencies and people who deliver on the ground.

This new approach does not, of course, mean replacing thousands of targets with none at all. On health and education, we need minimum standards. Like a charter of healthcare entitlements guaranteed for all. And minimum standards for the results schools achieve.

There is nothing in principle wrong with the Government target that schools should get at least 30% of pupils achieving 5 good GCSEs – except that it’s much too low. What’s wrong is when government dictates exactly what schools have to do to achieve it.

Government should step away from daily management, and instead make sure that public services are held clearly to account through effective, independent systems of inspection. We should consider merging the Qualifications and Curriculum Authority, OFSTED and parts of the Schools department into a new Educational Standards Authority, independent of ministers, accountable to Parliament – and active in promoting innovation and best practice.

I don’t think it should be acceptable for any school to have over half of young people leaving without 5 good grades.

And it shouldn’t be acceptable that we have such low standards for GCSE pass scores that the Government reports as “passes” some grades which we know are in reality of no value in today’s labour market. What value exactly should an employer place on a G or F grade? You can get a G, in some cases, for a mark of about 20%. It’s time to call a fail, a fail. And raise expectations by abolishing the two lowest pass grades for GCSEs.

Downscaling national government’s role will also require a revitalisation of local government. Our country is absurdly centralised. More centralised than any other country in Europe except Malta, which has a population only slightly larger than Bristol.

Labour and Conservatives alike see our local government as a Whitehall delivery agency. Almost every big policy being delivered at present in our town halls has a “Made in Whitehall” stamp on its base.

No wonder so many people don’t bother to vote in local elections.

This is just daft. You can’t run thousands of schools from an office in Whitehall, and you can’t innovate effectively on a national scale. More powers must be devolved from central government, and with them more power to raise and spend money.

I want our party to draw up a new Charter of Freedoms and Responsibilities for Local Government – a bold document that will spell the end to the centralised state. But with more freedom should come higher expectations. Where local government acts as a purchaser of services it must insist on high standards.

I know some people might want me to stop right there. But I didn’t come into politics just to transfer power from a set of national politicians to a set of local politicians. That’s a necessary first step, but it is not an end in itself.

We need to empower people who use and people who deliver public services every day. We know central government gets in the way of that happening. But let’s not pretend that local government is blameless. Councils too can impose bureaucracy, insist on unnecessary control.

One of the outstanding qualities of the best Liberal Democrat councils is precisely our willingness to give power away directly to local people and communities. In Sheffield, in Islington, in Eastleigh, we are pioneering the idea of local area panels whilst Labour wants to keep power hoarded within the Town Hall. Having national or local government responsible for the day to day running of so many schools may not be the best way to get innovation, change and improvement.

There is no liberal reason why those who deliver public services must always work directly for the government, central or local – so long as we are absolutely clear about the principles under which those services operate.

Government funding mechanisms must work to deliver social justice. That is why I will make it an absolute priority to find the money for a Pupil Premium that will raise school funding for the poorest children up to the level of private schools. This already happens in the Netherlands. Schools have a financial incentive to take on disadvantaged children – and the extra resources needed to support those children. And it works.

All new schools must also be open to all. So we must end selection. Pupils and parents should pick schools – not the other way round. If new schools only improve results by selecting the cleverest pupils, one form of educational segregation will merely be replaced by another. That is why the Liberal Democrats would remove the powers to select from Academies, Specialist Schools, Trust and Foundation Schools.

With these sound principles of social justice and opportunity for all governing our public services, government, including local government, can move to become a purchaser, not simply a provider.

Let’s look at Academies. There is plenty wrong with the government’s Academies programme – from the selection rules to the absurdity of trying to run schools all over the country at the behest of one Minister in the House of Lords.

But there is nothing wrong at all with allowing schools the freedom to innovate. Nothing wrong with bringing committed people and organisations into our education system. And nothing wrong with allowing schools to exist outside direct daily local government management – as long as they are under local government oversight.

And it makes me angry when I hear people attacking new schools which have replaced old, failing, local authority schools many of which consigned generations of children who could have done much better to the educational scrapheap.

So, with these principles in mind, I want us to look at establishing a new liberal model of schools that are non-selective, under local government strategic oversight but not run by the council, and free to innovate to drive up standards for all our children. They could be established by any suitable sponsor, including parents, educational charities, voluntary and private organisations with the right credentials. Sponsors should be independently assessed for their expertise, with no ministerial involvement.

This new generation of schools – let us call them Free Schools – will have the funding to help those children who need the most support; the obligation to be accessible to all; and the freedom from unnecessary political and bureaucratic interference to innovate in the best interests of their pupils.

Freedom. Innovation. Diversity. Yes, choice too. These are liberal words. Let us take them back. If we yield liberal language and liberal values to our opponents we do nothing but damage to our liberal cause.

This is the 21st century – the age of Youtube, and Facebook, and Wikipedia. The age not of top-down management, but of people taking control of their own lives, creating the tools to deliver services to each other. We no longer want to be treated as if we should be grateful recipients of inflexible, and sometimes second rate, state services delivered from on high.

I am totally committed to the National Health Service. It must always remain free at the point of use, accessible to all. But people need to be able to take more control both of its management, and their own health care.

I want it to become a People’s Health Service. So every patient should have a guarantee of treatment within a specified waiting time – and to drive the NHS to deliver that, everyone should have the right to receive private treatment, paid for by the NHS, if the waiting time’s not met.

That’s the way it works in Denmark – not to undermine the public health system, but to guarantee individual patient entitlements – and there’s no reason it shouldn’t work here. And patients should have more control over their care – where possible with budgets devolved to individuals for long term and chronic conditions.

In particular, these rights are crucial for people with mental health problems. Today, there aren’t even any targets on mental health waiting times – let alone entitlements. In many places people wait months and months for access to treatments – if they get anything at all. Mental illness affects 1 in 4 British families: it can no longer be neglected just because it doesn’t make a good photo opportunity.

Thousands of patients, especially those with non acute mental health conditions, would benefit enormously if they had greater control over their own care budgets, and greater say over how their care is organised and delivered.

So, in conclusion. An end to controlling central state management. More power and responsibility for local government. More power and responsibility for public servants. More power and responsibility too for the people who use our public services. And greater space for real grassroots innovation in who provides our public services, and how they do it.

This is the way to deliver a fairer Britain, and give every man, woman and child in Britain today a fair chance, and an equal stake in our society.

It is not only a liberal agenda, it is what the British people want. We live in an era where people want individual freedom, not big faceless government. People are unconvinced by Gordon Brown, and baffled by the Conservatives.

What Britain needs is a party which is liberal both economically and socially. A party which is passionate about building a fairer society, but understands that freedom is the ally of fairness – not its enemy.

That is what I want our manifesto to offer the British people. I hope all of us will work hard together today and in the crucial months ahead to deliver it.

Source: Liberal Democrats website via web.archive.org. The speech is marked “Check against delivery”. The emphases are mine; I hope they make the speech easier to read.

You can read more about the Nick Clegg Archive here.

The last cartoon Ali Ferzat drew before he was badly beaten by regime thugs

Early in the morning of 24 August, a man was dragged out of his car by masked members of Syrian security services in Damascus. He was viciously beaten, mainly on his hands. His name is Ali Ferzat, and he is one of the Arab world’s most famous political cartoonists. His “crime” was to have published too many cartoons vilifying the Assad regime’s brutal crackdown against protest and political dissent.

I would be surprised if many readers of this post had heard of this attack or seen any of Ali Ferzat’s cartoons. In fact, I only found out about it yesterday. This is a symptom of a problem with our media: both in the UK and here in Sweden, the bleeding of the Syrian people has fallen off the news agenda. This post is a small attempt to redress that, along with other Swedish bloggers who have blogged about Syria yesterday. Cecilia Johnsson, Ida Mörk and Bonnie Peterson all ask why news from Syria is eclipsed on newspaper websites not just by scenes of liberation in Tripoli but also by a grill party at the house of Sweden’s star footballer. As Dana Pourkomeylian argues, we rely on the media to inform us about what is going on in the world. Two sentences on the radio news bulletin doesn’t cut it when you’re reporting the murder of abour 80 people by Syrian army tanks.

It is striking that the American and British response to continued atrocities in Syria has been rather more robust than that of Sweden and the EU as a group. While the US has already called for Assad to stand down, a position supported by the UK, France and Germany in a joint statement, the Syrian ambassador remains in Stockholm and Sweden’s foreign minister Carl Bildt refuses to demand Assad’s resignation. He wrote on his blog:

We recognise countries – not governments. And we recognise realities – not ambitions.

Other countries – not least but not only the great powers – sometimes deal with these issues in a different way, but we have never considered that to be particularly wise.

Naturally situations will occur from time to time which are not clear under these principles.

But in these situations too it is usually wise – not least because of the risk of setting a precedent – to try to keep as close to the established principles as possible

The problem with this argument is that in practice Sweden does recognise ambitions rather than realities. Just to take one example, like most countries Sweden recognises the Transitional Federal Government of Somalia, an unelected group that barely controls Mogadishu and faces challenges both from a vicious Islamist group and from the breakaway regions of Puntland and Somaliland. In fact, Sweden is co-hosting a donor conference for the TFG. According to Bildt’s principles, surely Sweden should recognise the stable and elected government of Somaliland? Of course Somaliland is not recognised as a country by any other countries, though some provide aid in areas like police training.

Sanctions are a similar story: the US government has banned American individuals and companies from doing business with Syria. As a result, Visa and Mastercard cards no longer work in Syria. The US has also slapped sanctions on the Syrian ambassador to Lebanon, who it accuses of complicity in the disappearances of a number of Syrian activists who were living in Lebanon. I have written about Syria’s threats against Syrian refugees in Lebanon before, and it appears that the arm of Assad’s thugs reaches as far as Paris and Santiago.

In comparison to robust American sanctions, the EU effort is a bit of a half measure. Oil trading has now been banned, but with an exception for current contracts running until 15 November (after Italian insistence). And European companies are not yet banned from investing or doing business in Syria, which spares the blushes of oil companies like Total and Royal Dutch Shell.

Hanna Lindquist, Frida Simonsson and Yacob Rajes are right to argue that Sweden and Europe need to demand Assad’s resignation and tighten sanctions.

The Liberal Youth of Sweden has suggested that military intervention should be considered, but like Bawar Ismail I think that is a non-starter. Syrian protesters are regularly braving live fire to take to the streets without any weapons, and they do not want NATO bombs. The weight of international outrage and the impact of stopping petroleum imports (tanks need fuel, after all) should be enough to tip the scales to the side of the suffering Syrian people.

Indeed, a letter to the Financial Times (not in the UK print edition) argues today that more quantitative easing (expanding the money supply by buying financial assets) would be pointless or worse:

QE3 appears to fit the informal definition of insanity, where we repeat the same thing over again and expect a different result. But it also risks inflation rising out of the control of our central bankers.

I am inclined to agree with the writer. That said, QE is far from a complete failure. As this helpful Economist article reminds us, QE was not just meant to boost economic growth. What happens when the Federal Reserve or Bank of England buy a financial asset in the market is that the seller’s bank is paid by a credit to its reserve account with the central bank. Or to put it more simply, the central bank injects cash into commercial banks.

During the financial panic of 2008-9 this was a good thing to do because many banks had difficulty getting short-term funding, so the extra cash gave the banks some breathing space. Likewise, the signal that central banks would take extraordinary measures to prevent economic collapse helped to stop the panic.

But the situation today is different. Rather than the financial heart attack brought on by the collapse of Lehman Brothers, Western economies are now going through a sort of Chinese water torture: everyone expects more bad news but they don’t know whan it will come and what it will be. Understandably, confidence is evaporating.

In this situation quantitative easing has two big weaknesses. These are to do with what central bankers call the monetary policy transmission mechanism, which is the way changing the money supply influences the whole economy.

The first problem is that central banks don’t actually create most of the money we spend: high street banks do that by lending to people and companies. In theory (specifically, the Bernanke-Blinder model) an increase in central bank money will always result in rising prices and incomes. In practice, this relies on the multiplier effect of bank lending being constant. But if banks are worried about their funding or about the risk of losses, they may well choose to hoard their increased cash reserves rather than lend them. (Indeed, in the first three months of QE in the UK bank reserves rose at an annualised rate of 1968% [sic].)

Federal Reserve statistics suggest this problem is real. Between July 2010 and July 2011 the monetary base (currency and bank reserves) increased by 34.6% but M2 (the broadest American measure of money supply) grew by only 8.2%. Bank of England statistics show the same story: despite a historically low interest rate and the Bank’s own quantitative easing, growth in money supply (called M4 in the UK) is well below the level usual in a healthy economy.

Growth in M4. The pink line is the relevant one as it excludes the banking system. The Bank of England announced its QE programme in March 2009 (red line)

The second problem is in the financial markets. QE increases prices of financial assets, and this in turn is meant to boost the economy in several ways. First, buying bonds reduces long-term interest rates; this reduces the cost of borrowing on the corporate bond markets so should stimulate investment by companies. Second, since share prices also rise this should stimulate investment too, this time through Tobin’s Q. (As the market value of a company’s capital stock increases above its replacement cost it becomes profitable to invest more.) Third, the wealth effect of growing investment portfolios encourages their lucky owners to go shopping.

In practice, most of the money created by QE seems to be sloshing around inside the financial markets, as the high prices of government bonds and the rise and rise of gold indicate. And despite rising profits and masses of spare cash, companies are not investing. In fact, capital investment has fallen to record lows in the UK. If companies are unwilling to invest spare cash, then their cost of borrowing is frankly irrelevant. And any wealth effect from rising asset values will directly benefit only the already well-off (most people’s investments are either too small to matter or tied up in a pension fund). Suffice to say that the 30% jump in sales at Tiffany’s does not seem to have trickled down to the rest of the American economy yet.

The fundamental problem with quantitative easing as economic stimulus is that it relies on expanding credit, when banks are still counting the number of skeletons in their cupboards, and on stimulating investment, when companies see few opportunities to invest. If it didn’t work for Japan, why should it work for us?

Jag har precis tittat på SVT:s Maestro, där sex kändisar ska lära sig dirigera orkester. Några var faktiskt överraskande bra efter första veckans utbildning: Ola Rapace fick ett svårt stycke (början på Beethovens femte) och gjorde rätt bra ifrån sig; Marit Bergman gjorde en bra insats (efter en trevande start) med Hugo Alfvéns Festspel, en av mina favoriter.

Men överraskningen var Thaiboxaren Jörgen Kruths framförande av Brahms Ungersk dans nr. 5. Stycket är en älsklingsextranummer för många orkestrar och han fångade rytmiken riktigt bra. Han kunde till och med få orkestern att stoppa och starta tillsammans (en svårare uppgift än det ser ut).

Jag har inte hunnit titta på de fullständiga framföranden ännu på SVT Play (tack vare långsam internetuppkoppling). Men jag kan redan nu säga att man kan dock inte göra bättre TV av Ungersk dans nr. 5 än vad Charlie Chaplin gjorde i filmen Diktatorn (ovan).

@bloggitik-54eaa6d1

Alla ska med. Så enkelt är det

Hur ska nya bloggare i LUF och Folkpartiet nå ut i bloggosfären? Självklart kan man gå med i de bloggportal som finns. Men för nya bloggare är det särskilt viktigt att ha uppmuntran och läsare som är tillräckligt intresserade för att kommentera eller rentav länka till inlägg. Det bästa sättet att få det här i början är att få andra inom samma parti att läsa din blogg.

Enklaste sättet att bli sedd på nätet av partivänner är att registrera sig på en bloggportal som samlar bloggar från partiet. Men här störtar den folkpartistiska bloggaren på patrull: man får bara vara med på bloggportalen på Folkpartiets webbsida om man är förtroendevald eller kandidat. Vanliga medlemmar får inte vara med.

Man kan förstå att man vill ha koll på vad väljare kan hitta på Folkpartiet.se, men alla andra allianspartier har bloggportaler öppna till alla medlemmar utanför partiernas hemsidor. Alliansen som helhet har en portal. Till och med de toppstyrda sossarna har en förträfflig portal.

Folkpartiets bloggsida hänvisar till Politometern för de som vill hitta inlägg från fler folkpartister och LUFfare. Det är bättre än ingenting (och självklart ska alla registrera sig på Politometern), men att förlita sig endast på dem har två nackdelar. För det första är den inte integrerad med andra liberala webbsidor (det finns inga länkar till hur man går med i FP eller LUF, till exempel). För det andra behålls all data om t.ex. hur många klickar sig vidare till varje inlägg av Politometern. För oss som bloggar skulle det vara bra att ha lite mer information tillgänglig. (Lib Dems använder dessa data från portalen Lib Dem Blogs för att sammanställa en lista över de bästa blogginlägg varje vecka.)

Jag tycker det är dags att samla bloggare från LUF och Folkpartiet i en egen bloggportal. En stor anledning för att LUF:s kongresser är så trevliga är att alla talare får ett bra bemötande och förstagångstalare blir peppade av alla i kongressalen. Det skulle vara bra för oss nya liberala bloggare att kunna samlas och få samma stöd genom en egen bloggportal.

Kommentarsfältet är öppet – vad tycker du? Har du fler idéer? Skriv gärna!