Getting the sack for having the wrong beliefs

The dismissal of a bus driver who supports the BNP shows how fragile freedom of association is today

by Rosamund Cuckston 

Thanks to a ruling by the European Court of Human Rights last year, the UK Employment Rights Act has been amended so that, from the first day of employment, an employee can bring a claim of unfair dismissal if the reason for being sacked was his or her political affiliation or opinions. An individual would not need to have worked somewhere for years before getting this protection.

This should be unalloyed good news. No one should be sacked simply because of their political allegiances; they should be allowed the freedom to associate with whomever they choose. However, the long chain of events leading to this legal change, granted by a body which has placed a variety of get-out clauses around true freedom of association, suggests that a bit of scepticism is required.

A Deep Frost in Franco-German Relations

Until Elections Do Us Part

By SPIEGEL

Progress in the European Union is stalled at the moment because France and Germany can't get along. Paris is hoping for a change of government in Berlin after elections this fall, but even that would do little to bridge growing differences between the countries.

The ambassadors who gathered in the library of the German Foreign Ministry the Thursday before last knew the situation was unusually serious. These diplomats are accustomed to seeing images of Chancellor Angela Merkel with a Hitler mustache drawn on her face, hearing vitriolic tirades about Germany's enforcement of austerity policies in Europe and experiencing tense diplomatic talks. For some time now, German diplomats have watched anti-German sentiment increase dramatically in many countries in the European Union.

Under these circumstances, the ambassadors who converged at the Foreign Ministry certainly didn't expect the meeting to be any kind of laid-back reunion, but what they encountered still caught them by surprise. Nikolaus Meyer-Landrut, Merkel's EU policy advisor, gave the diplomats an unvarnished picture of the Chancellery's concerns that matters may not improve any time soon. Merkel's advisor left the diplomats with a clear impression that the German government has given up hope of any appreciable progress in European policy before Germany's federal elections this September.

Is France poised for a revolution?

Now, a French Spring?

By Michel Gurfinkiel 

Less than one year after François Hollande’s election as president and the stunning victory of his socialist supporters at the National Assembly, there is a widespread feeling in France that his administration is doomed. According to the latest poll ^[1] released by Journal du Dimanche on April 21, 74% of the French now entertain bad opinions about Hollande as president, whereas only 25% still support him. These represent the worst figures ever for a head of state at the same point in his mandate since the founding of the Fifth Republic in 1958.

The French media wonder whether such discontent may lead to a constitutional crisis — or even a revolution. A French Spring. “Is this 1789 ^[2]?” asked Le Point, a right-of-center magazine. This is a reference to the Great Revolution of 1789 that terminated the Old Regime not just in France, but all over continental Europe. Le Point’s cover featured Hollande as Louis XVI, with a white wig and surrounded by blood thirsty sans-culottes.

Le Nouvel Observateur, a left-wing magazine, offered a different yet equally ominous parallel: “Are the 1930s back? ^[3]“ The 1930s were a time for both left-wing and right-wing revolutions in Europe: Stalin-style communism on one hand, Fascism and Nazism on the other hand. In France, it materialized in right-wing riots in 1934, in a Popular Front electoral victory in 1936, and finally — after a crushing military defeat at the hands of Nazi Germany in 1940 — in a far right dictatorship: the Vichy regime.

Eurocrats with a bee in their bonnets

It seems the bee has replaced the whale and the polar bear as the friendly face of green authoritarianism

by Rob Lyons 

On Monday, an EU committee voted on a proposal by the European Commission, the EU’s executive body, for a partial ban on a widely used class of pesticides called neonicotinoids. The vote was inconclusive, with no ‘qualified majority’ either for or against. In to such situations, the commission is able simply to impose its plan. The whole affair is a case study in incomplete science being used to impose precautionary policy with green NGOs acting as lobbyists and cheerleaders.

The new ban is a response to a genuine problem: the decline in populations of pollinating insects, particularly bees. A particularly graphic idea in relation to this is ‘colony collapse disorder’, where hives may lose most or all of their bees. At present, bees are widely used to pollinate many food crops, though not all such crops require pollination to produce food. This has led to claims that the threat to bees is, in turn, a major threat to food production, despite the fact that our most important food crops do not require pollination and other crops can be pollinated simply by using more bees or by other means entirely (though this bumps up the cost, of course).

The decline of bees has been going on for a long time, with causes including land-use changes - prompting the loss of plants that bees feed on - and the spread of a mite called Varroa destructor, which causes disease in honeybees. However, in recent years the finger of blame has also been pointed at neonicotinoid pesticides. These were regarded as a step forward for pesticides when introduced 20 years ago. First, they are systemic pesticides, that spread throughout the plant, providing more complete and preemptive protection. This also means they are not normally sprayed on to the surface of plants, which in theory keeps them away from beneficial insects. Secondly, while these nicotine-like substances are deadly to insects, they have low toxicity to mammals and humans, which reduces the negative impacts on other wildlife and human health compared with older pesticides.

How America Wrote Japan's Constitution

Revisiting a Constitution Crafted ‘in a Week’

In this Sept. 19, 1950, file photo, Gen. Douglas MacArthur,
 in passenger seat wearing leather jacket, tours the newly
 opened Incheon Front in western Korea during the Korean War.

By Yuka Hayashi

As he steps up his push to revise Japan’s postwar constitution, Prime Minister Shinzo Abe has explained that the 66-year-old basic law of Japan has become obsolete. The Japanese people must “get back our constitution,” Mr. Abe says, as the current one was written by the “occupying forces” of Gen. Douglas MacArthur, when the world was a different place. It was something drafted by “young staffers of the GHQ in a very short period of time,” he wrote in his book “Toward A New Country” published in January. “Just in 10 days or so.”

Mr. Abe’s account of how the constitution was prepared matches those given by some of those “young staffers” themselves. Several of the two dozen or so former American officials who were tasked with writing the draft constitution in 1946 shared their experiences in detail in video interviews conducted two decades ago.

Viewers can access the videos for free on the web site of the Claremont Colleges Digital Library based in California.

Among those interviewed was Richard Poole, who went to Tokyo to work for General Headquarters as a 26-year-old State Department official in 1946. Mr. Poole, now deceased, discussed how he and a couple of other young officials were assigned to draw up a section that determined Japan’s current imperial system, including the role of the emperor.

“We were told–it was a total surprise to most of us–you are to draft a new constitution for Japan and you’ll complete the work in a week. We were thunderstruck by this assignment,” he said. “Here we were a group of officers, although not a single one of us was a career officer and we were all from different walks of civilian life. We were hardly comparable to the founding fathers who drafted our constitution in the U.S.”

Another participant was Theodore McNelly, who was a 26-year-old intelligence officer working for Gen. MacArthur at his office in Tokyo’s Hibiya neighborhood. He later became a Japan studies scholar. Mr. McNelly, who passed away in 2008, was assigned to the group that drafted Article 9–probably the most controversial part of the constitution in which Japan renounced war and the possession of a military.

Mr. McNelly explained how Gen. MacArthur and Maj. Gen. Courtney Whitney, who as a lawyer led the efforts to prepare the constitution, decided that GHQ had to draw up the draft “as a kind of a model to guide the Japanese.” This came after they determined the document prepared by the cabinet of then Prime Minister Kijuro Shidehara was “really inadequate.”

Writing of the draft, Mr. McNelly said, was such a rush. “We had more materials than we had time to study them,” he said. “When you had to do this in a week, there wasn’t time to do a great deal of historical research.”

Who Will Be Master in Europe?

A dangerous and unnecessary question

By Theodore Dalrymple

If you ask someone who is in favour of "the European project" what that project actually is, he will not reply: "The creation of a large and powerful unitary state without any unnecessary interference from populations that, because of their ignorance and stupidity, see no need for it" - a reply that at least would have the merit of honesty.

No: he will start mumbling about peace and the need to avoid a repetition of World War II, as if, were it not for directives from Brussels about how large bananas must be or what are the permitted scents in soap, Europeans would once again be at each other's throats.

Actually, a forced European unity, conjured from no popular sentiment by a strange combination of bureaucratic mediocrity and gaseous utopianism, is more likely to lead to conflict than to prevent it; and the increasingly wide divergence of the interests of France and Germany is fast recalling the ghosts of the past. The French fear to be dominated; the Germans don't want to be condescended to.

Relations between the two countries, often called (between them) the locomotive of Europe, have deteriorated since the arrival in power of Francois Hollande, who was elected on the promise of doing precisely the opposite of what the Germans think the French ought to do. Hollande was hoping for an alliance with Italy and the German Social Democrats if they returned to power; but the German Social Democrats are closer in policy to Angela Merkel than they are to Hollande (indeed, they are the authors of the very policies Hollande was elected to resist); and Italy can hardly help itself at the moment, let alone France. Hollande wanted to go for a grand slam when Germany held all the cards.

Two or three rather foolish recent statements have made matters worse. Hollande called for a state of "friendly tension" between the two countries, as if the differences between them were merely academic or a matter of cafe discussion, rather than of fundamental national interest.

The weird obsession with chemical weapons

If Assad really has killed 15 people with sarin, why is that worse than his slaughter of thousands of others with bullets and bombs?

by Tim Black 

It seems fairly likely, but still uncertain, that the government forces of Syrian president Bashar al-Assad deployed some sort of chemical weapon against rebels in the cities of Aleppo, Homs and Damascus. Intelligence agencies in Israel, UK, France and the US certainly seem convinced. As indeed do politicians. But here’s the question few seem to be asking: so what?

That is not to diminish or demean the deaths of the 15 or so alleged to have been killed by some sort of chemical agent. Rather, it is to ask: what makes those deaths so different from the 70,000 others who have lost their lives during the two-year-long Syrian conflict? There certainly seems to be an assumption that these deaths are different, that, in short, a handful of chemically aided fatalities are somehow more morally repugnant than the tens of thousands of non-chemically aided deaths. For some as yet obscure ethical reason, the means of death appear to matter to Western observers. Burning people alive or mangling them to death are, it seems, deemed lesser wrongs than suffocating people using a nerve agent.

Which doesn’t really make any sense. Why is there this obsession in Western political circles with the possible use of chemical weapons? No doubt, the potent symbolism of chemical warfare plays a part. Largely invisible, chemical weapons play upon the idea of the unseen enemy, the unseen threat. And as such, in our fearful, hyper-vulnerable times, the idea of unsighted chemical agent wreaking silent destruction resonates in a way an all-too-tangible tank does not. To compound the curious socio-cultural significance of chemical weapons, there is also the myth-bound historical legacy of chemical-weapon use during the First and Second World Wars, despite actual gas-induced fatalities being far outweighed by fantastical fears. In fact, such was the terror of the Germans dropping a chemical payload on Britain during the Second World War that the entire population was provided with a gas mask.

Italy to Brussels: Give Us More Money

Beggars and Choosers 

Newly elected Italian PM Enrico Letta is getting bolder and more assertive by the minute, judging by his remarks at a recent Berlin press conference. According to the FT, Letta said that a single European currency doesn’t do enough to promote economic growth in member countries. He stated that more political union is needed to help European economies thrive:

 “Now we have to make up for lost time. That time was lost because too many countries have looked at the next elections and by doing this they have made it harder to explain to citizens that they had to concede sovereignty,” Mr Letta said in a speech to the Italian senate.

“Our destiny as Europeans is common, otherwise it will be made up of individual countries that will slowly decline . . . in a world where the powers of countries with populations in their billions will prevail,” Mr Letta said.

In short, Letta is telling Berlin: all your money belongs to us. We earlier noted that Letta’s first speech to parliament pointed to an Italy ready to take a harder line with Europe. Many smart Italians think Germany has way overplayed its hand and that it will ultimately be forced to fold on austerity issues just as it was forced to fold on the ECB policy of accommodating the needs of debtor countries. The alternatives are just too expensive and dangerous. Given that belief, they think Italy has a strong hand and should play a more aggressive game.

It looks like Letta agrees, and he’s getting clearer and clearer about what he wants European policy to look like. 

There Will Be Haircuts

The barber has you cornered

by William H. Gross

“Good as Money,” proclaimed the ad for Twenty Grand Cognac. Being a beer drinker, and never having cashed in a Budweiser to pay for a fill-up at the local gas station, I said to myself “Man, that must be really good stuff!” Even in a financial meltdown I thought, you could use it in place of cash, diamonds, gold or Bitcoins! And if the Mongol hordes descend upon us during a future revolution, who wouldn’t prefer a few belts of Twenty Grand on the way out, instead of some shiny rocks and a slingshot?

Well, not being inebriated at that moment I immediately shifted focus to a more serious topic. What IS money? A medium of exchange and a store of value is a rather succinct definition, but we generally think of it as cash or perhaps checks that reflect some balance of “ready” cash at a friendly bank. Yet as technology and financial innovation have progressed over the past few decades, and as central banks have tenuously validated the liquidity and price of various forms of credit, it seems that the definition of money has been extended; not perhaps to a bottle of Twenty Grand Cognac, but at least to some other rather liquid forms of near currency such as money market funds, institutional “repo” and short-term Treasuries “guaranteed” by the Fed to trade at par over the next few years.

All of the above are close to serving as a “medium of exchange” because they presumably can be converted overnight at the holder’s whim without loss and then transferred to a savings or checking account. It has been the objective of the Fed over the past few years to make even more innovative forms of money by supporting stock and bond prices at cost on an ever ascending scale, thereby assuring holders via a “Bernanke put” that they might just as well own stocks as the cash in their purses. Gosh, a decade or so ago a house almost became a money substitute. MEW – or mortgage equity withdrawal – could be liquefied instantaneously based on a “never go down” housing market. You could equitize your home and go sailing off into the sunset on a new 28-foot skiff on any day but Sunday.

So as long as liquid assets can hold par/cost with an option to increase in price, then these new forms of credit or equity might be considered “money” or something better! They might therefore represent a “store of value” in addition to serving as a convertible medium of exchange. But then, that phrase “Good as Money” on the cognac bottle kept coming back to haunt me. Is all this newfangled money actually “money good?” Technology and Fed liquidity may have allowed them to serve as modern “mediums of exchange,” but are they legitimate “stores of value?” Well, the past decade has proved that houses were merely homes and not ATM machines. They were not “good as money.” Likewise, the Fed’s modern day liquid wealth creations such as bonds and stocks may suffer a similar fate at a future bubbled price whether it be 1.50% for a 10-year Treasury or Dow 16,000.

The Next Great Economic Depression Has Already Started In Europe

This is all going to end very, very badly

by Michael Snyder

The next Great Depression is already happening - it just hasn't reached the United States yet.  Things in Europe just continue to get worse and worse, and yet most people in the United States still don't get it.  All the time I have people ask me when the "economic collapse" is going to happen.  Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening.  In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s.

Pay close attention to what is happening over there, because it is coming here too.  You see, the truth is that Europe is a lot like the United States.  We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards.  The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind.  The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day.  We have gone "all in" on kicking the can down the road even though it means destroying the future of America.  But the alternative scares the living daylights out of our politicians.  When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating.  A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe.  Eventually it will spread to the rest of the globe as well.
The following are 20 signs that the next Great Depression has already started in Europe...

Where’s Congress’s ‘Red Line’?

Before we slide into another war, let the country be consulted first

By PATRICK J. BUCHANAN

“The worst mistake of my presidency,” said Ronald Reagan of his decision to put Marines into the middle of Lebanon’s civil war, where 241 died in a suicide bombing of their barracks.

And if Barack Obama plunges into Syria’s civil war, it could consume his presidency, even as Iraq consumed the presidency of George W. Bush.

Why would Obama even consider this?

Because he blundered badly. Foolishly, he put his credibility on the line by warning that any Syrian use of chemical weapons would cross a “red line” and be a “game changer” with “enormous consequences.”

Not only was this ultimatum unwise, Obama had no authority to issue it. If Syria does not threaten or attack us, Obama would need congressional authorization before he could constitutionally engage in acts of war against Syria. When did he ever receive such authorization?

Moreover, there is no proof Syrian President Bashar Assad ever ordered the use of chemical weapons.

U.S. intelligence agencies maintain that small amounts of the deadly toxin sarin gas were likely used. But if it did happen, we do not know who ordered it.

Syrians officials deny that they ever used chemicals. And before we dismiss Damascus’ denials, recall that an innocent man in Tupelo, Miss., was lately charged with mailing deadly ricin to Sen. Roger Wicker and President Obama. This weekend, we learned he may have been framed.

It is well within the capacity of Assad’s enemies to use or fake the use of poison gas to suck us into fighting their war.

Even if elements of Assad’s army did use sarin, we ought not plunge in. And, fortunately, that seems to be Obama’s thinking.

Why stay out? Because it is not our war. There is no vital U.S. interest in who rules Syria. Hafez Assad and Bashar have ruled Syria for 40 years. How has that ever threatened us?

The American Pravda

The major media overlooked Communist spies and Madoff’s fraud. What are they missing today?

By RON UNZ

In mid-March, the Wall Street Journal carried a long discussion of the origins of the Bretton Woods system, the international financial framework that governed the Western world for decades after World War II. A photo showed the two individuals who negotiated that agreement. Britain was represented by John Maynard Keynes, a towering economic figure of that era. America’s representative was Harry Dexter White, assistant secretary of the Treasury and long a central architect of American economic policy, given that his nominal superior, Secretary Henry Morgenthau Jr., was a gentleman farmer with no background in finance. White was also a Communist agent.

Such a situation was hardly unique in American government during the 1930s and 1940s. For example, when a dying Franklin Roosevelt negotiated the outlines of postwar Europe with Joseph Stalin at the 1945 Yalta summit, one of his important advisors was Alger Hiss, a State Department official whose primary loyalty was to the Soviet side. Over the last 20 years, John Earl Haynes, Harvey Klehr, and other scholars have conclusively established that many dozens or even hundreds of Soviet agents once honeycombed the key policy staffs and nuclear research facilities of our federal government, constituting a total presence perhaps approaching the scale suggested by Sen. Joseph McCarthy, whose often unsubstantiated charges tended to damage the credibility of his position.

The Cold War ended over two decades ago and Communism has been relegated to merely an unpleasant chapter in the history books, so today these facts are hardly much disputed. For example, liberal Washington Post blogger Ezra Klein matter-of-factly referred to White as a “Soviet spy” in the title of his column on our postwar financial system. But during the actual period when America’s government was heavily influenced by Communist agents, such accusations were widely denounced as “Red-baiting” or ridiculed as right-wing conspiracy paranoia by many of our most influential journalists and publications. In 1982 liberal icon Susan Sontag ruefully acknowledged that for decades the subscribers to the lowbrow Readers Digest had received a more realistic view of the world than those who drew their knowledge from the elite liberal publications favored by her fellow intellectuals. I myself came of age near the end of the Cold War and always vaguely assumed that such lurid tales of espionage were wildly exaggerated. I was wrong.

The notion of the American government being infiltrated and substantially controlled by agents of a foreign power has been the stuff of endless Hollywood movies and television shows, but for various reasons such popular channels have never been employed to bring the true-life historical example to wide attention. I doubt if even one American in a hundred today is familiar with the name “Harry Dexter White” or dozens of similar agents.

Bank of America: Too Crooked to Fail

The bank has defrauded everyone from investors and insurers to homeowners and the unemployed

by MATT TAIBBI

At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they'll be into some shit again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

It's been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they'd be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, "robo-signed" evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn't ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America's bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank's bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it's also far too corrupt to survive.

Turkey's ticking debt time-bomb

The Numbers Tell the Story

by Spengler 

Turkey's economy came to a dead stop during the first quarter, but the country's credit bubble continues to grow. 
Under the headline "Ankara's Economic Miracle Collapses'', I argued a year ago in the Middle East Quarterly that Turkey's economic prowess had more hype than substance. The government of Prime Minister Recep Tayyip Erdogan had financed a consumer bubble with a huge trade deficit financed by short-term interbank loans. The consumer boom is gone, but the credit bubble continues, with bank lending still expanding by 30% a year despite the stalled economy. Turkey's current account deficit remains in the red-alert region of nearly 10% of GDP, and it continues to finance the deficit with short-term interbank borrowings. Bubbles like this eventually blow up.
Turkey cannot blame global economic conditions, because emerging market economies are growing at 5.5% this year in the International Monetary Fund's estimate while Turkey is not growing at all. Turkey's government debt remains quite low at just 36% of GDP, but private-sector debt - especially short-term foreign debt - has tripled in the past four years. 
Most of the US$80 billion in short-term money that Turkey has borrowed since 2010 probably came from the Gulf states, which have a strategic interest in preserving a Sunni power with an army larger than Iran's. This largesse cannot continue indefinitely, though. Turkey's central bank promised to reduce its foreign deficit by reducing growth. Now the growth is gone, but not the deficit. The galloping increase in bank debt indicates that Turkish banks are lending their customers just enough to pay the interest on past loans. 
This puts Erdogan's political future in question. His Justice and Development Party (AKP) won the past two national elections on the strength of its economic record. Many Turks are caught in a consumer debt spiral, borrowing to pay a 32% interest rate on credit card obligations. Consumer spending has already started to fall. A few months more of this and Erdogan's mandate will start to crumble. 
The numbers tell the story.  
Exhibit 1: Industrial Production YOY Change Falls to Zero 

Source: Central Bank of Turkey 

Legal Plunder Run Amock

Bank secrecy not an evil

By Martin Hutchinson 

A brief history of secrecy laws - from Mickey Mouse and the honest wealthy to terrorist groups. 

The wolves are closing in on the world's bank secrecy laws. Former bank employees in Switzerland and Liechtenstein have handed lists of depositors to the United States and European Union authorities. 

Following the Cyprus debacle, the EU is seeking to end bank secrecy in the well-run banking systems of its members Luxembourg and Austria. Luxembourg appears to have "compromised" but Austria, bless it, is still holding out (as a former Abteilungsdirektor of the Austrian bank Creditanstalt-Bankverein I declare an interest here). Nevertheless I hope a number of strong-minded but respectable states with few avenues for blackmail keep bank secrecy, for one very good reason: in a modern social-democratic world, it is a key civil liberty. 

The first bank secrecy law was written by Switzerland in 1934 and played a vital role in enabling at least some German Jewish people to preserve both their lives and their assets during the horrors of World War II. The "key civil liberty" aspect of bank secrecy laws thus cannot be dismissed. While we will hopefully never again have a regime as evil as the Nazis, there are plenty of regimes around the world that oppress their subjects, and those subjects need an asset bolt-hole where they can preserve their wealth while they emigrate or simply decide to wait for better times. 

It's not surprising that there were no bank secrecy laws before 1934. The London merchant banks and private banks of the 19th century would have binned immediately a demand from any government other than Britain's for their customers' records. Numerous dissidents such as Louis Napoleon (the future Napoleon III) and Lajos Kossuth, the Hungarian revolutionary, could keep their money in London entirely without fear of expropriation for that reason. As for Britain itself, with income tax at less than 5% for most of the 19th century there was no great incentive for tax evasion, although accounts were occasionally seized in fraud cases.

UKIP: monster raving loonies?

The political and media classes' pathologisation of the UK Independence Party exposes their own cowardice

by Patrick Hayes 

Nutters. Nutcases. Loonies. Morons. Crackpots. Cuckoos. Oddballs. Fruitflies. Fruitloops. Fruitcakes. When it comes to slang used to suggest that members of the right-wing libertarian UK Independence Party (UKIP) are mentally ill, mainstream politicians and the media have lobbed the entire urban dictionary at them.

UKIP’s latest diagnosis came at the weekend from polo-necked Conservative minister Ken Clarke. In light of the upcoming local elections, Clarke dismissed UKIP as a ‘collection of clowns’, full of ‘waifs and strays’ not sufficiently ‘sensible’ to become local councillors. His comments echoed UK prime minister David Cameron’s oft-quoted remarks from 2006 when he dismissed UKIP as a bunch of ‘fruit cakes and loonies and closet racists’. Cameron has refused to retract these comments, adding earlier this year that he still thought UKIP was full of ‘pretty odd people’.

Almost since its launch in 1993, politicians have chosen to paint UKIP as the successor to the Monster Raving Loony Party, full of – as Michael Howard, Cameron’s predecessor as Tory leader, put it – ‘cranks, gadflies and extremists’. The message is clear: on no account should UKIP be taken seriously as a political force. It deserves only ridicule. After all, how could any party that calls for the abolition of the smoking ban, or for the UK to leave the EU, be considered to be of sound mind? If you support UKIP, you need your head examined.

The volley of insults against UKIP has been ramped up in anticipation of this week’s local council elections, where UKIP looks set to gain its largest number of seats ever. One recent article in The Times suggested that UKIP could gain 40 seats, taking its UK-wide total to 90. But while this is a substantial percentage increase, UKIP would still be represented by just 0.5 per cent of the total number of councillors in the UK. While UKIP often soars above the Liberal Democrats in the polls, it makes little actual headway in elections.

The bitcoin bubble and Birmingham tokens

Private innovation in currencies is a good thing

by Matt Ridley

Bitcoins — a form of digital private money — shot up in value from $90 to $260 each after Cypriot bank accounts were raided by the State, then plunged last week before recovering some of their value. These gyrations are symptoms of a bubble. Just as with tulip bulbs or dotcom shares, there will probably be a bursting. All markets in assets that can be hoarded and resold — as opposed to those in goods for consumption — suffer from bubbles. Money is no different; and a new currency is rather like a new tulip breed.

Yet it would be a mistake to write off Bitcoins as just another bubble. People are clearly keen on new forms of money safe from the confiscation and inflation that looks increasingly inevitable as governments try to escape their debts. Bitcoins pose a fundamental question: will some form of private money replace the kind minted and printed by governments?

It has happened before. Pennies and halfpennies were effectively privatised by industrialists in Birmingham in the 1790s. New industrial employers had to pay workers in cash rather than kind, as farmers had done. But there was a chronic shortage of small coins. The Royal Mint had given up making silver coins because people melted them down when their value as metal exceeded their face value and had stopped striking copper halfpennies, which were too easily counterfeited.

So Thomas Williams, the owner of an Anglesey copper mine, and Matthew Boulton, keen to put steam engines to work, offered to make pennies for the government. Rebuffed, Williams made coins anyway. Called druids, they were harder to fake or clip (because they had raised rims) and cheaper to strike than state coins. Being convertible into guineas and pounds at a fixed price of one penny, they were soon accepted all over Birmingham and even in London.

By 1797 there were 600 tons of such tokens in circulation and the counterfeiters were put out of business. The coiners started making silver tokens too but a jealous Royal Mint lobbied Parliament to outlaw the competition. It succeeded in 1818, three years before it could produce new copper coins to match the high standards of the private ones, so the coin famine resumed.

More recent private currencies — from Green Shield stamps and air miles to Lewes “pounds” (designed to encourage spending in the East Sussex town) — have been less ambitious than the Birmingham tokens, whose story is told in an outstanding book Good Money. Its author, the economist George Selgin, has now turned his attention to Bitcoins, which he thinks come close to having the characteristics of an ideal currency.

Generation jobless

The number of young people out of work globally is nearly as big as the population of the United States

The Economist

“YOUNG people ought not to be idle. It is very bad for them,” said Margaret Thatcher in 1984. She was right: there are few worse things that society can do to its young than to leave them in limbo. Those who start their careers on the dole are more likely to have lower wages and more spells of joblessness later in life, because they lose out on the chance to acquire skills and self-confidence in their formative years.

Yet more young people are idle than ever (see article). OECD figures suggest that 26m 15- to 24-year-olds in developed countries are not in employment, education or training; the number of young people without a job has risen by 30% since 2007. The International Labour Organisation reports that 75m young people globally are looking for a job. World Bank surveys suggest that 262m young people in emerging markets are economically inactive. Depending on how you measure them, the number of young people without a job is nearly as large as the population of America (311m).

Two factors play a big part. First, the long slowdown in the West has reduced demand for labour, and it is easier to put off hiring young people than it is to fire older workers. Second, in emerging economies population growth is fastest in countries with dysfunctional labour markets, such as India and Egypt.

The result is an “arc of unemployment”, from southern Europe through north Africa and the Middle East to South Asia, where the rich world’s recession meets the poor world’s youthquake. The anger of the young jobless has already burst onto the streets in the Middle East. Violent crime, generally in decline in the rich world, is rising in Spain, Italy and Portugal—countries with startlingly high youth unemployment.

Will growth give them a job?

The most obvious way to tackle this problem is to reignite growth. That is easier said than done in a world plagued by debt, and is anyway only a partial answer. The countries where the problem is worst (such as Spain and Egypt) suffered from high youth unemployment even when their economies were growing. Throughout the recession companies have continued to complain that they cannot find young people with the right skills. This underlines the importance of two other solutions: reforming labour markets and improving education. These are familiar prescriptions, but ones that need to be delivered with both a new vigour and a new twist.

Youth unemployment is often at its worst in countries with rigid labour markets. Cartelised industries, high taxes on hiring, strict rules about firing, high minimum wages: all these help condemn young people to the street corner. South Africa has some of the highest unemployment south of the Sahara, in part because it has powerful trade unions and rigid rules about hiring and firing. Many countries in the arc of youth unemployment have high minimum wages and heavy taxes on labour. India has around 200 laws on work and pay.

Korematsu and the dangers of waiving constitutional rights

The Korematsu case is a reminder that waiving constitutional rights is rarely necessary and rarely ends well

By George F. Will

Two of the three most infamous Supreme Court decisions were erased by events. The Civil War and postwar constitutional amendments effectively overturned Dred Scott v. Sandford (1857), which held that blacks could never have rights that whites must respect. Plessy v. Ferguson (1896), which upheld legally enforced segregation, was undone by court decisions and legislation.

The third, Korematsu v. United States (1944), which affirmed the president’s wartime power to sweep Americans of disfavored racial groups into concentration camps, elicited a 1988 congressional apology. Now Peter Irons, founder of the Earl Warren Bill of Rights Project at the University of California at San Diego, is campaigning for a Supreme Court “repudiation” of the Korematsu decision and other Japanese internment rulings. Such repudiation, if it occurred, would be unprecedented.

An essay Irons is circulating among constitutional law professors whose support he seeks is timely reading in today’s context of anti-constitutional presidencies, particularly regarding war powers.

On Feb. 19, 1942, President Franklin Roosevelt authorized the military to “prescribe military areas . . . from which any or all persons may be excluded.” So some 110,000 Americans of Japanese ancestry, two-thirds of them born here, were sent to camps in desolate Western locations. Supposedly, this was a precaution against espionage and sabotage. Actually, it rested entirely on the racial animus of Gen. John DeWitt, head of the Western Defense Command.

Using government records, Irons has demonstrated that because senior officials, including Solicitor General Charles Fahy, committed “numerous and knowing acts of governmental misconduct,” the Supreme Court based its decision on “records and arguments that were fabricated and fraudulent.” Officials altered and destroyed evidence that would have revealed the racist motives for the internments. And to preserve the pretext of a “military necessity” for the concentration camps, officials suppressed reports on the lack of evidence of disloyalty or espionage by Japanese Americans.