In the meantime, the debasement of paper money continues

The nightmare after Christmas

by DETLEV SCHLICHTER on DECEMBER 23, 2011 · 6 COMMENTS

Image by 10incheslab

 The pathetic state of the global financial system was again on display this week. Stocks around the world go up when a major central bank pumps money into the financial system. They go down when the flow of money slows and when the intoxicating influence of the latest money injection wears off. Can anybody really take this seriously?

On Tuesday, the prospect of another gigantic cash infusion from the ECB’s printing press into Europe’s banking sector, which is in large part terminally ill but institutionally protected from dying, was enough to trigger the established Pavlovian reflexes among portfolio managers and traders.

None of this has anything to do with capitalism properly understood. None of this has anything to do with efficient capital allocation, with channelling savings into productive capital, or with evaluating entrepreneurship and rewarding innovation. This is the make-believe, get-rich-quick (or, increasingly, pretend-you-are-still-rich) world of state-managed fiat-money-socialism. The free market is dead. We just pretend it is still alive.

There are, of course those who are still under the illusion that this can go on forever. Or even that what we need is some shock-and-awe Über-money injection that will finally put an end to all that unhelpful worrying about excessive debt levels and overstretched balance sheets. Let’s print ourselves a merry little recovery.

Image by Salvatore Vuono

How did Mr. Bernanke, the United States’ money-printer-in-chief put it in 2002? “Under a paper-money system, adetermined government can always generate higher spending…” (Italics mine.)

Well, I think governments and central banks will get even more determined in 2012. And it is going to end in a proper disaster.

Lender of all resorts

Last week in one of their articles on the euro-mess, the Wall Street Journal Europe repeated a widely shared myth about the ECB: “With Germany’s backing, the ECB has so far refused to become a lender of last resort, …” This is, of course, nonsense. Even the laziest of 2011 year-end reviews will show that the ECB is precisely that: A committed funder of states and banks. Like all other central banks, the ECB has one overriding objective: to create a constant flow of new fiat money and thus cheap credit to an overstretched banking sector and an out-of-control welfare state that can no longer be funded by the private sector. That is what the ECB’s role is. The ECB is lender of last resort, first resort, and soon every resort.

Let’s look at the facts. The ECB started 2011 with record low policy rates. In the spring it thought it appropriate to consider an exit strategy. The ECB conducted a number of moderate rate hikes that have by now all been reversed. By the beginning of 2012 the ECB’s policy rates are again where they were at the beginning of 2011, at record low levels.

So why was the springtime attempt at “rate normalization” aborted? Because of deflationary risks? Hardly. Inflation is at 3 percent and thus not only higher than at the start of the year but also above the ECB’s official target.

The reason was simply this: states and banks needed a lender of last resort. The private market had lost confidence in the ability (willingness?) of certain euro-zone governments to ever repay their massive and constantly growing debt load. Certain states were thus cut off from cheap funding. The resulting re-pricing of sovereign bonds hit the banks and made it more challenging for them to finance their excessive balance sheets with money from their usual sources, not least U.S. money market funds.

So, in true lender-of-last resort fashion, the ECB had to conduct a U-turn and put those printing presses into high gear to fund states and banks at more convenient rates. While in a free market, lending rates are the result of the bargaining between lenders and borrowers, in the state-managed fiat money system, politicians and bureaucrats define what constitutes “sustainable” and “appropriate” interest rates for states and banks. The central bank has to deliver.

Unlimited Euros!, photo by Florian K.

The ECB has not only helped with lower rates. Its balance sheet has expanded over the year by at least €490 billion, and is thus 24% larger than at the start of the year. This does not even include this week’s cash binge. The ECB is funding ever more European banks and is accepting weaker collateral against its loans. Many of these banks would be bust by now were it not for the constant subsidy of cheap and unlimited ECB credit. If that does not define a lender of last resort, what does?

And as I pointed out recently, the ECB’s self-imposed limit of €20 billion in weekly government bond purchases (an exercise in market manipulation and subsidization of spendthrift governments but shamelessly masked as an operation to allow for smooth transmission of monetary policy) is hardly a severe restriction. It would allow the ECB to expand its balance sheet by another €1 trillion a year. (The ECB is presently keeping its bond purchases well below €20 billion per week.)

Deflation? What deflation?

It is noteworthy that there still seems to be a widespread belief that all this money-printing will not lead to higher inflation because of the offsetting deflationary forces emanating from private bank deleveraging and fiscal austerity.

This is an argument I came across a lot when I had the chance in recent weeks to present the ideas behind my book to investors and hedge fund managers in London, Edinburgh and Milan. Indeed, even some of the people who share my outlook about the endgame of the fiat money system do believe that we could go through a period of falling prices first, at least for certain financial assets and real estate, before central bankers open the flood-gates completely and implement the type of no holds barred policy I mentioned above. Then, and only then will we see a dramatic rise in inflation expectations, a rise in money velocity and a sharp rise in official inflation readings.

Maybe. But I don’t think so. I consider it more likely that we go straight to higher inflation.

The deleveraging in the banking sector is the equivalent of austerity in the public sector: it is an idea. A promise. The reflationary policy of the central bank is a fact. And that policy actively works against private bank deleveraging and public sector debt reduction.

Consider this: The present credit crisis started in 2007. Yet, none of the major economies registered deflation. All are experiencing inflation, often above target levels and often rising. In the euro-area, over the past twelve months, the official inflation rate increased from 2 percent to 3 percent.

From the start of 2011 to the beginning of this month, the U.S. Federal Reserve boosted the monetary base by USD 560 billion, or 27 percent. So far this year, M1 increased by 17.5 percent and M2 by 9.5 percent.

Below is the so-called “true money supply” for the U.S. calculated by the Mises Institute.

From the Mises Institute Website

As the Mises-Institute’s Doug French pointed out, total assets held by the six biggest banks in the U.S. increased by 39% over the past 5 years. Maybe this is not surprising given that in our brave new world of limitless fiat money, credit contraction is strictly verboten.

It's more fun to give

A Country in Denial About Its Fiscal Future

By Robert Samuelson

There are moments when our political system, whose essential job is to mediate conflicts in broadly acceptable and desirable ways, is simply not up to the task. It fails. This may be one of those moments. What we learned in 2011 is that the frustrating and confusing budget debate may never reach a workable conclusion. It may continue indefinitely until it's abruptly ended by a severe economic or financial crisis that wrenches control from elected leaders.

We are shifting from "give away politics" to "take away politics." Since World War II, presidents and Congresses have been in the enviable position of distributing more benefits to more people without requiring ever-steeper taxes. Now, this governing formula no longer works, and politicians face the opposite: taking away -- reducing benefits or raising taxes significantly -- to prevent government deficits from destabilizing the economy. It is not clear that either Democrats or Republicans can navigate the change.

Our political system has failed before. Conflicts that could not be resolved through debate, compromise and legislation were settled in more primitive and violent ways. The Civil War was the greatest and most tragic failure; leaders couldn't end slavery peacefully. In our time, the social protests and disorders of the 1960s -- the civil rights and anti-war movements and urban riots -- almost overwhelmed the political process. So did double-digit inflation, peaking at 13 percent in 1979 and 1980, which for years defied efforts to control it.

The budget impasse raises comparable questions. Can we resolve it before some ill-defined crisis imposes its own terms? For years, there has been a "something for nothing" aspect to our politics. More people became dependent on government. From 1960 to 2010, the share of federal spending going for "payments to individuals" (Social Security, food stamps, Medicare and the like) climbed from 26 percent to 66 percent. Meanwhile, the tax burden barely budged. In 1960, federal taxes were 17.8 percent of national income (gross domestic product). In 2007, they were 18.5 percent of GDP.

This good fortune reflected falling military spending -- from 52 percent of federal outlays in 1960 to 20 percent today -- and solid economic growth that produced ample tax revenues. Generally modest budget deficits bridged any gap. But now this favorable arithmetic has collapsed under the weight of slower economic growth (even after a recovery from the recession), an aging population (increasing the number of recipients) and high health costs (already 26 percent of federal spending). Present and prospective deficits are gargantuan.

The trouble is that, while the economics of give away policies have changed, the politics haven't. Liberals still want more spending, conservatives more tax cuts. (Although the tax burden has stayed steady, various "cuts" have offset projected increases and shifted the burden.) With a few exceptions, Democrats and Republicans haven't embraced detailed take away policies to reconcile Americans' appetite for government benefits with their distaste for taxes. President Obama has provided no leadership. Aside from Rep. Paul Ryan, chairman of the House Budget Committee, few Republicans have.

No one wants to take away; it's more fun to give. All 2011's budget feuds -- over the debt ceiling, the supercommittee, the payroll tax cut -- skirted the central issues. There's a legitimate debate about how fast deficits should be reduced to avoid jeopardizing the economic recovery, notes Charles Blahous, a White House official in the George W. Bush Administration. But the long-term budget problem, as he says, stems from Social Security, Medicare and other health programs.

Any resolution of the budget impasse must repudiate, at least partially, the past half-century's politics. Conservatives look at the required tax increases and say: "no way." Liberals look at the required benefit cuts and say: "no way."

Each reverts to scripted evasions. Liberals imply (wrongly) that taxing the rich will solve the long-term budget problem. It won't. For example, the Forbes 400 richest Americans have a collective wealth of $1.5 trillion. If the government simply confiscated everything they own, and turned them into paupers, it would barely cover the one-time 2011 deficit of $1.3 trillion. Conservatives deplore "spending" in the abstract, ignoring the popularity of much spending, especially Social Security and Medicare.

So the political system is failing. It's stuck in the past. It can't make desirable choices about the future. It can't resolve deep conflicts.

An alternative theory is that we're muddling our way to a messy consensus. All the studies and failed negotiations lay the groundwork for ultimate accommodation. Perhaps. But it's just as likely that this year's partisan scapegoating implies more partisan scapegoating. Political leaders assume that financial markets won't ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases. 

The State is Violence

Egypt’s Military Masters

By Andrew Rosenthal,

Five days of violent clashes between Egyptian soldiers and protesters have produced appalling images of cruelty and abuse — including a video showing soldiers stripping the abaya off a woman on the ground to reveal her blue bra as one raises a boot to stomp on her.

In February, the army enhanced its standing by refusing to fire on demonstrators when President Hosni Mubarak was ousted. Now it is inspiring rage and threatening Egypt’s transition to democracy. On Tuesday, in an extraordinary display, thousands of women gathered in Tahrir Square in Cairo to express outrage over the army’s treatment of women and to protest against continued military rule.

The generals who form the ruling military council are proving that they will do whatever it takes — including killing protesters and detaining thousands — to protect their authority and control of lucrative chunks of the economy. They have repeatedly shown that they are determined to hold on to power even after a new Parliament — still in the process of being elected — is seated next year.

On Monday, Gen. Adel Emara of the ruling council denied that soldiers were responsible for any violence and claimed the protesters were engaged in a plot “to destroy the state.” Blaming protesters is unconvincing in the face of shocking images of the military’s conduct. If the military rulers were interested in justice, they would have started an independent investigation into all acts of violence, whether military or civilian.

Secretary of State Hillary Rodham Clinton spoke forcefully this week against the street attacks on women, noting, that “this systematic degradation of Egyptian women dishonors the revolution, disgraces the state and its uniform and is not worthy of a great people.”

The Obama administration needs to keep pressing the generals to move expeditiously to civilian rule. If the army continues to attack the Egyptian people, the administration will have no choice but to reduce its $2 billion in annual aid — two-thirds of it going to Egypt’s military — to show that it will not enable such behavior.

The army mishandled Egypt’s transition from the start, including refusing financial help from the International Monetary Fund for its deteriorating economy. But the Islamist parties that won big in the early rounds of parliamentary voting and the liberals that have done poorly in the voting also made mistakes. There are huge challenges ahead, including writing a constitution and coping with a looming and serious economic crisis exacerbated by the political turmoil. But the most pressing issue is ensuring that power moves from the army to elected civilian leaders.

From a nation of laws to a nation of men making laws in secret

America’s Future: Russia and China Use Copyright Laws to Crush Government Criticism

by WashingtonsBlog

America Mimics Russia, China, Iran and Malaysia

Leading American Internet businessmen warn that the draconian copyright bill on the verge of being passed by Congress would let the US government use censorship techniques “similar to those used by China, Malaysia and Iran.”

If you want to know what the United States would look like after this bill is passed, just look at what’s been happening in Russia:  The Russian government has been crushing dissent under the pretext of enforcing copyright law.

As the New York Times noted last year:

Across Russia, the security services have carried out dozens of similar raids against outspoken advocacy groups or opposition newspapers in recent years. Security officials say the inquiries reflect their concern about software piracy, which is rampant in Russia. Yet they rarely if ever carry out raids against advocacy groups or news organizations that back the government.

***

[A] review of these cases indicates that the security services often seize computers whether or not they contain illegal software. The police immediately filed reports saying they had discovered such programs, before even examining the computers in detail. The police claims have in numerous instances been successfully discredited by defendants when the cases go before judges.

***

The plainclothes officers who descended upon the Baikal Wave headquarters said they were from the division that investigated commercial crime. But the environmentalists said they noticed at least one officer from the antiextremism department, which tracks opposition activists and had often conducted surveillance on the group.

***

Baikal Wave’s leaders said they had known that the authorities used such raids to pressure advocacy groups, so they had made certain that all their software was legal.

But they quickly realized how difficult it would be to defend themselves.

They said they told the officers that they were mistaken, pulling out receipts and original Microsoft packaging to prove that the software was not pirated. The police did not appear to take that into consideration. A supervising officer issued a report on the spot saying that illegal software had been uncovered.

Before the raid, the environmentalists said their computers were affixed with Microsoft’s “Certificate of Authenticity” stickers that attested to the software’s legality. But as the computers were being hauled away, they noticed something odd: the stickers were gone.

In all, 12 computers were confiscated. The group’s Web site was disabled, its finances left in disarray, its plans disclosed to the authorities.

The police also obtained personnel information from the computers. In the following weeks, officers tracked down some of the group’s supporters and interrogated them.“The police had one goal, which was to prevent us from working,” said Galina Kulebyakina, a co-chairwoman of Baikal Wave. “They removed our computers because we actively took a position against the paper factory and forcefully voiced it.”

“They can do pretty much what they want, with impunity,” she said.

***

Mr. Kurt-Adzhiyev said he now realized that the authorities were not so much interested in convictions as in harassing opponents. Even if the inquiries are abandoned, they are debilitating when they require months to defend.

Since the American copyright bills (SOPA and PIPA) target online activities, the same thing happening to Russian critics’ computers could happen to the websites of any Americans who criticize the government, the too big to fail banks, or any of the other powers-that-be.

Indeed, the American copyright bill is modeled after the Chinese system.  As I noted Monday:

Given that Joe Lieberman said that America needs an internet kill switch like China, that the U.S. economy has turned socialist (at least for friends of those with control of the money spigot), and that the U.S. government used communist Chinese torture techniques specifically designed to produce false confessions in order to sell the Iraq war, I guess that the bill’s Chinese-style censorship is not entirely surprising.

Of course, it might seem over-the-top to worry about copyright laws being used to stifle government criticism in America … if it weren’t for the fact that:

§  Some folks have alleged that copyright infringers are terrorists. See this, this, this and this

§  The U.S. government has been using anti-terrorism laws to crush dissent

§  In modern America, questioning war, protesting anything, asking questions about pollution or about Wall Street shenanigans, supporting Ron Paul, being a libertarian, holding gold, stocking up on more than 7 days of food, or liking the Founding Fathers may get you labeled as a suspected terrorist

§  We’ve gone from a nation of laws to a nation of men making laws in secret

A Christmas Tale

A Polish village, a war, and a brand new bicycle.

By Christopher Orlet

He passed away earlier this year, the old man. We spent a number of Christmases with him and his wife, in their crowded, crumbling apartment in a village called Mysliborz near the German border. It was on one such Christmas night that he told this story, which even after all these years I am unable to forget:

FOR CHRISTMAS that year I received a brand new bicycle. This was in the first year of the war. The bicycle was a Lucznik, sleek and fire engine red. I was the envy of all the kids in the village. I still cannot imagine how my father saved enough to buy such a thing, but somehow he had.

That was the winter German troops arrived in our village. Immediately the soldiers began posting notices all over town. Every week a new notice ordering villagers to bring this or that item to police headquarters. One week it would be butter churners, the next week it was goats. If you ignored the order and you were found out, or if someone reported you, you would be severely punished. You can probably guess what that meant.

I was attending school the day the Germans decided to round up all of the bicycles in the village. I can only imagine how terrible my father must have felt, knowing how much I loved that bicycle. Nevertheless he dared not disobey orders. My father was a practical man. He wasn't going to risk being shot over a bicycle.

That afternoon my friend Radek and I walked home from school just like we always did. It had been raining earlier but now the sky had cleared and the cobblestone streets shimmered in the late afternoon sun. Suddenly Radek halted. He nudged me and asked if that wasn't my bicycle leaning against the wall of the tavern. We hurried to get a closer look. True enough, it was my bike. No one else in town had one like it, and no one would for many years.

"How do you suppose it got here?" asked Radek.

I shrugged. "Beats me."

I climbed on my bicycle and began pedaling up and down the street. It was my bike all right.

Radek ran alongside me for a while. "Can I try?" he cried.

"I have to get home now," I said. I rode off doing tricks down the alley.

I did not go home directly. Chores waited at home. I rode up and down the wet cobblestone streets, enjoying the looks of all the wide-eyed villagers envious of my new bike.

My mother and father were working in the garden when I rode through the gate. I saw my mother straighten and the hoe fall from her hands. She let out a small cry.

My father looked up. His face had turned ashen gray. He raised his arm and pointed as though he were seeing a ghost. "Where did you get that?" he cried.

I was confused. What kind of question was that? "I got it for Christmas," I said. Even then I was too old to believe in St. Nicholas.

"No! Where did you get it just now?"

Something caught in my throat. "I found it leaning against the wall of the pub." I seemed to have done something wrong, but for the life of me I had no idea what. I dropped the bicycle to the ground and ran to my mother. I began to cry.

"Shhhh. It's okay," she said weakly.

My father stared blankly down the road. "I'm a dead man," he muttered.

My mother bunched her apron in her hands. "Take it back to where he found it. Maybe they haven't noticed it missing."

"But it's mine!" I cried. I still didn't know what the matter was. My mother patted my head and shushed me.

My father sighed and picked up my bicycle. He looked at me, almost kindly. "Stop that. Be a man," he said. He climbed on my bicycle and rode off awkwardly down the street.

Mother and I stood by the front gate a long time. We waited in silence until we saw the first star come out. At length she said it was time to go inside for supper.

Later that night, after I had gone to bed, my father came into my room. He sat on the edge of my bed. I turned away from him, still angry. "I am sorry," he said. I felt his rough hands stroke my hair. I edged closer to the wall. I could tell by the sound of his voice he had been crying.

THE OLD MAN paused and slowly shook his head. "Six million people died in that war, but that was the only time I ever heard my father weep," he said.

It was late and my wife and the baby had drifted off to sleep. This was many years ago when we were living in a small town in western Poland.

A poor substitute for real history

Pop history

While society has become ever more estranged from the great events of the past, music has been on a lazy nostalgia trip of reunions, reissues, recycling and anniversaries.

by Neil Davenport 

Ageing rockers, mods and soul men - not to mention militant rappers and balding acid ravers - don’t just grow old disgracefully; they go on reunion tours to celebrate it, too. The Noughties was the decade in which any musician with a reasonable back catalogue could relive former glories and bolster bank balances. It was as if the League of Gentlemen’s Les McQueen, and his quest to relive his Seventies glam-rock days in Crème Brulée, became the blueprint for the decade. Nearly all the acts of any note from the past 30 years - apart from the Smiths and the Jam - have sorted out bitter differences with former band members, attached girdles to their stomachs, booked world tours and banked the proceeds. Yes, it’s undignified, but probably more lucrative than a shift with a local mini-cab firm.

In an age of internet file-sharing, royalties from back catalogues don’t quite have the staying power they used to. The far more lucrative tour and festival circuit is where the real money is at. Any band that does feel compelled to reissue its back catalogue must do so via state-of-the-art remastering (the Smiths) or superannuated box sets featuring fanboy artefacts such as rough demo collections nobody plays again (Nirvana) and souvenir tat that has a queasy end-of-the-pier feel to it (Primal Scream).

The outfit that has tried all avenues of back-catalogue reheats as successfully as anyone is bone-crunching, sci-fi surf punks, the Pixies. Their reunion lasted longer than their original creative years: a worldwide comeback tour, reissued ‘best of’ packages and, when all that had been exhausted, a twentieth-anniversary tour of their best album, Doolittle.

Playing a fan-favourite album in its entirety became a big concert draw in the 2000s. It was popularised by the promoter behind the All Tomorrow’s Parties festival, Barry Hogan, who successfully enticed hip alt.rock bands to perform ‘classic’ albums in their entirety. That he calls these concerts ‘Don’t Look Back’ suggests a developed sense of irony. On a harmless Saturday-night-out level, some of these shows can be enjoyable enough. Dinosaur Jr performed Living All Over Me, the Tindersticks gave us their second eponymous album and, the granddaddy of them all, Brian Wilson, revived the Beach Boys classic Pet Sounds at the Royal Festival Hall.

In fact, for an individual lampooned as a far-gone Sixties casualty, Wilson has played the back catalogue game even better than the Pixies. Since 2002, Wilson - with his backing band, the Wondermints - has routinely performed Beach Boys classics at inflated prices in London’s more opulent concert halls. He even re-recorded his ‘great lost’ Beach Boys album, Smile, only to issue the original 1968 album, in deluxe editions of course, last month. Wilson ended 2011 by announcing a full-blown Beach Boys reunion to celebrate 50 years of, well, not being quite together.

That announcement, however, was nothing compared to the news that the original Stone Roses line-up would be touring next year. Given that singer Ian Brown and guitarist John Squire frequently poured scorn on the idea of a reunion - especially given Brown’s most famous lyric ‘the past was yours/the future’s mine/you’re all out of time’ - it seems the reunion roadshow is set to trudge through this decade too. For those of us who (yawn) lived through the Stone Roses the first time, their career has been one long anniversary anyway. Glad to have them back? It’s like they’ve never been too far away from a deluxe re-issue and a 10-page spread in Mojo. But a note of caution for younger fans eager to see them afresh: the Stone Roses’ well-known signature tune, ‘Stone Roses cancel comeback tour’, could still make a last minute re-appearance…

The obsession with pop’s recent past is the subject of Simon Reynolds’ current book, Retromania. As someone who, like me, was schooled in punk and post-punk, discussing or liking records from the past (let alone buying them) would be to commit a grave social faux pas. Incredible as it may seem now, in the 1980s The Beatles, Rolling Stones and the Beach Boys were derisorily known as ‘dad’s music’ and given instant dismissal. As Reynolds pointed out in his previous book, Rip It Up and Start Again, record companies often deleted albums as there was too much new stuff being released. And given the mind-boggling brilliance of a lot of early Eighties alt.indie and new pop, there wasn’t the time to go and find rare Big Star albums from the 1970s.

Indeed, the whole point of being an alt.music fan was discovering the next big thing, watching them take off and being indelibly linked to the period you’re living in. Even today, it is still far more thrilling to witness a band on the cusp of making it big (such as The xx a few years back) than to see a band recreating ‘your yoof’ (though one unkind soul recently suggested to me that my youth never ended). There can be no more woeful sight than Echo & The Bunnymen destroying their last ounces of credibility or seeing Peter Hook take a shovel and crowbar to Joy Division’s ‘Unknown Pleasures’ and reduce grown men to tears (though not in the way Ian Curtis originally planned).

It would be simplistic and banal to argue that the nostalgia industry is down to the lack of decent new bands today. On their own terms, there are still dozens of new albums each year worthy of attention and acclaim. It’s just that, as Reynolds points out, ‘the pop present became ever more crowded out by the past…instead of being about itself, the 2000s has been about every other previous decade happening again all at once’. Reynolds is as much schooled in leftist sociology as he is in the back pages of Melody Maker and makes a number of insightful points on the current nostalgia glut. Although digital innovations were hugely impressive in the 2000s - it was the decade where how you listened to music became more important than what you listened to - Reynolds acknowledges that ‘our belief in progress itself has been shaken badly’. The knock-on effect has been a slow-developing popular culture where the past always wins.

However, even some of this feels a little too rehearsed as an explanation for the dominance of reissues and reunions. After all, a broader script of disillusion with progress was palpable in the Nineties – the decade when techno, cuts’n’glitch electronica, drone-rock, trance and pneumatic R’n’B all triumphed. The 2000s, by contrast, have very little that can compare for era-defining styles. There is literally no difference in styles between chart records of 1999 and 2009, except that the reality-TV show spin-off plays a bigger part.

Reynolds has a superb eye for detail and charts how current pop is all-consumed by its past. He rolls out pithy put-downs on contemporary music’s anti-modernist regression and sheer laziness. Nevertheless, he doesn’t quite offer a full explanation as to why the 2000s and beyond are the ‘Re’ era (reissue, revival, repackage, reunion etc). But it becomes apparent when he fondly reels off previous pop genres - whether mod, rave, hip hop or British indie - how these styles were created through localised, organic scenes. They developed through young people attending clubs or hip watering holes, making them their own and forging ahead creatively as a result. In the recent past, innovative clusters of groups were always associated with specific regions: Bristol and trip hop; Manchester and pop reinvention; Seattle and grunge; Glasgow and indie; Chicago and house; and so on. Whatever happened to the creatively dynamic, localised scenes that suddenly went global?

In Britain in particular, the relentless war on public drinking has had the knock-on effect of stunting the development of bohemian enclaves around the country (see When indie music was truly independent, by Neil Davenport). It has also encouraged a deadening privatised world and a stay-at-home-with-mom sensibility with young people today. The idea of pubs, clubs and record shops being associated with hipster scenes is as bizarre to young people as an old clip of Ready, Steady, Go. As such, the relationship to music is entirely privatised and far less significant than it used to be. Shaking off an obsession with pop may be no bad thing (a curse perhaps for my post-punk generation), but with that has also come a decline in creative energy and in a sense of ‘anything is possible’. Fatalism and nostalgia have been the twin dead hands on creativity in this past decade.

Alongside all this, the pop anniversary has thrived only because real social history has declined. As a society, Britain has become alarmingly philistine about its own and wider European history (apart from the Second World War, and even this is a paltry, one-sided understanding). The ideological thrust of New Labour’s New Britain was to dismiss the past with the effect of closing down the future. Furthermore, Britain’s imperial past, even its achievements in the Victorian era, are seen as too tortuous, too problematic and rather disdainful to anti-modernist or multicultural sensibilities. The past is not only a ‘different country’ but one to emigrate from, never to return. Even a decade that once had a perpetual glow to it, the Sixties, has now been written off for being racist, sexist and obsessed with consumerism.

In the absence of genuine social history, as a source of narrative and debate in society, pop anniversaries step in to fill the vacuum. The ‘significance’ of commemorating 30 years since punk or 20 years since Nirvana’s Nevermind is preferable to commemorating real events in British or Western history. It is not only down to Western self-loathing, but it is presumed to be ‘arrogant’ that discussing history means discussing ‘your story’ rather than somebody else’s story. History has often been a contested battlefield, but it’s a field that is now vacated due to it being ‘dodgy’ or ‘not relevant’ to the New Britain of the present. Occasionally, there will be the odd documentary on the Tudors or the recent historical series on Jerusalem, but these are far outweighed by endless programmes on Factory Records, New York hip hop, punk, Sixties folk and even documentaries on progressive rock. No corner of recent pop ‘history’ has been left unexplored on BBC4; it’s far harder to find programmes that even scratch the surface of Britain’s tumultuous history.

Retromania is an enjoyable survey of how deeply ingrained the ‘Re’ era has become this past decade. When the past triumphs over the present so relentlessly in popular culture, it’s a worrying sign of deep cultural and creative malaise. Ironically enough, however, it’s precisely because we’re so quiet on real History that pop history has grown ever louder. Like so many box-set reissues of worn-out albums, it’s surely time we changed the record.