Britannia Unchained – Welcome to your Future

Reader, I sucked it up so you don’t have to. After diligently searching the library for a copy of Britannia Unchained, the 2012 tract authored by Kwasi, our Dear Leader, Chris Skidmore and a couple of also-rans, I failed to find it. So I sucked up the Amazon price of £16. I don’t suggest you do the same 😉 I am tempted to list it as an investment expense. After all, you need to know what Liz Truss is thinking, and since she didn’t have to put any of it in a manifesto, this is as good as it gets.

I expected to hate it, but though I found it somewhat studenty and one-dimensional in places, I found much to agree with. My main philosophical charge against the tract was the strong tendency to infer the general from the particular, heavy on anecdote and light on tested principle. You could, however, level that charge against most of the dismal science of economics. What theoretical principles I have seen in economics often doesn’t come out well in the testing, or there is a replication issue where it works in some circumstances but not others. This is not terribly surprising for something attempting to make sense of a multivariate system rammed full of independent and resourceful actors with varying degrees of knowledge and emotion.

But I’ll run with it, because for better or worse, this philosophy is guiding the country for the next up to two years. So far, what’s appeared has been consistent with the book, but I can promise you, dear readers, you ain’t seen nuffink yet. About 90% of the idea hasn’t been voiced yet. So let’s set the scene from Britannia Unchained itself, in the intro.

All five authors grew up in a period where Britain was improving its performance relative to the rest of the world. The 1980s, contrary to the beliefs of many on the left, were a successful decade for Britain. They were a time when, after the industrial chaos of the 1970s, business and enterprise began to flourish once more.

I’m not really going to dispute that. I saw the 1970s and started work in the 1980s. I saw a gradually improving economy, such that it blinded me to the single worst financial mistake of my entire life to date, buying a house in 1988. Because I inferred the general from the particular. The only defence was I was in my twenties and a greenhorn, but it’s not like wiser heads, both my parents and colleagues in the office, hadn’t suggested prices were high and there might be value in not acting right now. It is the nature of the world that young folk and believe themselves all-wise and invincible. It is the job of the world to disabuse them of that belief.

These authors ascribe this successful decade to Margaret Thatcher. She had something to do with it, for sure, but I would say that North Sea oil might also have had something to do with it. Outcomes are not always due to a single cause. But Thatcher did seize the opportunity, and did fix some deep problems that did need fixing. Seeing Arthur Scargill, or any union baron in general, still makes me want to throw things at the telly, because Art and his flying pickets and secondary action was running the country in the 1970s. Where Thatcher failed was not in taking the miners down IMO, but in leaving the twisted wreckage of those communities to rot – you can still feel it passing through some of the Welsh valleys. However, in the round, I’ll give the point.

They observe that in 1950 the UK was still richer than France of Germany, but lost its mojo and did not benefit from les trente gloriouses in the same way. We know the litany of 1970s decline. The surprising difference in belief comes with

a comparison of social mobility puts Britain near the bottom in the Western world. Yet the suggested cures to this disease — abolishing grammar schools or redistributing wealth — have been, if anything, counterproductive. This is not just a problem of the left, however. Right-wing commentators are apt to argue about natural ability and talent, as if success is solely a result of destiny rather than persistence.

Much of the following discussion is about the decline in educational attainment of Brits relative to our developed world peers according to the OECD PISA scores. And I’m surprised by Kwasi, Liz et al.

All the experience I have had in my decades on Earth is that intellect is innate, slightly inherited, and broadly immutable. Some people are brighter than others. Intelligence isn’t necessarily an indicator of success, particularly in the past, because there are many other skills – intelligence is broadly reflected in academic prowess, but doesn’t make you a better human being. It wasn’t even particularly advantageous in times past.

I formed this viewpoint in primary school, . In 1960s London, they were short of teachers, and some of the kids who had mastered spelling and some aspects of arithmetic were set to try and teach the slower ones. I was one of the child tutors, not electively, and found the experience frustrating, because I could not see why others could not see what I had learned/derived. Although I am probably to the right of the bell curve I am not MENSA bright, but the range of pupils at this school was wide. In a later repeat performance I saw a quarter of the class lose the plot when they introduced fractions in arithmetic.  Many never really mastered spelling. I was not the brightest in the school, however, and even at that age could see that, though I was in the upper reaches. At secondary school O level maths, calculus1 in the form of differentiation did the same again.

But I could see that some people were slower, and no effort seemed to redeem the problem. My valedictory primary school report had the phrase doesn’t tolerate fools gladly, and the succeeding decades has still not shown me why this was such a bad thing, fools should be kept well away from things they are foolish in 😉 I am foolish at all sorts of things, that house purchase was something I should have been kept away from! I have never, ever, considered teaching as a profession – not as a child, not as a young adult and I wouldn’t entertain the idea now.

In my grammar school, about half the class cleared off at 16, to go to work. These were the less academic, but the employment world of the 1970s was not the same as the employment world today. They could start earning – some of them worked in garages fixing cars or apprenticed to trades. The world of work presented opportunities for a much wider range of aptitudes than it does now, where analytic skills are much more to the fore, particularly if you want to earn well, and that roughly correlates to academic ability, and often to STEM areas, due to some of the analysis being mathematical, or at least arithmetical. Th 1960s and 70s had good earning positions for people without academic qualifications who could learn a skilled trade.

A lot of Britannia Unchained laments the poor academic and specifically STEM aptitudes of the output of Britain’s schools, and the tendency to favour arts and humanities because it is easier to get decent grades in these.

Instead of hard choices, students apply for a degree in media or business, which will often allow for the study of easier A Levels. As with US college courses, science A Levels are more harshly marked than those in media and sociology, the difference being up to a grade. In a culture of equivalence, where all subjects are deemed equal, students make the seemingly rational choice of going for the easier option.

Kwasi and Liz are of the belief that perseverance, hard work and application can compensation of a lack of innate ability. That may be true in many areas, but academic ability I am not so sure, although I have not darkened the threshold of a school for 40 years. Perhaps it’s all different now. This matters, because if an increasing number of jobs require academic ability, then the flipside of that is that the proportion of the workforce who are employable for anything other than national minimum wage will fall – the polarisation into some lovely jobs and lots of lousy jobs2, which seems to be what we are seeing. I am one of those commentators that are apt to argue about natural ability and talent, as if success is solely a result of destiny rather than persistence.

Success in some areas of life may well involve persistence, but academic ability is more innate IMO than persistence. Sure, it needs teaching to focus it, I am not saying teaching is irrelevant, but it won’t improve the material. It’s the same as indeedably’s tale of the second-rate athlete.

For whatever reason, often through no fault of their own, they just don’t have what it takes

The difference is important, because of the implication that the academically challenged can raise their game by putting in a lot of hard work. In which case, Kwasi and Liz are of the view that the problem is a lack of grit and determination of Britons to raise their game.

In Britain, there has been a massive rise in welfare dependency. The generosity of income support has risen sharply since the war. In today’s money, the taxpayer now spends ten times more on social security than in 1950 — with a fivefold rise in the number of people claiming unemployment benefits. The number of people claiming sickness and disability benefits has increased thirteenfold.
[…] The British state has made it too easy for too many people to take the easy option.

We know what’s coming. Massive cuts in benefits. So far very little has been said about this, but the authors of Britannia Unchained do not stint in their admiration for the American model of unemployment benefits, which have a time limit of about half a year. I believe that there is also a 99 week lifetime restriction. We will see Hoovervilles in the UK 3 in the coming recession and destitution if Lasi Trussteng have their way, because trailer parks and people sleeping in cars is how the US solves this conundrum, although to be fair that US is large enough that is some areas the climate makes this more possible, and it has a much lower population density, so the strife with the settled population is probably lower.

Before you FI/RE sorts get all complacent here, Lasi Trussteng would like a word about all that early retirement, you lazy bastards.

Our baby boomer can look forward to a long retirement, based on estimates of life expectancy nearly a century out of date. Most of his universal benefits remain ringfenced by the government, while his defined benefit pension is unlikely to ever be experienced by his children.

One has the feeling that your State Pension is going to be means tested at some stage 😉 The clue is in universal benefits, although it is possible that their position has changed on this – the recent rolling back of the child benefit withdrawal for higher-rate taxpayers goes against the grain.
The move towards an insurance based NHS is also lauded, thankfully more admiration for the European (French and German) way of doing that than the obnoxious US model. Supporting evidence is the pulling of the health inequality white paper by Therese Coffey. Although once you’ve done the work I’d be in favour of publishing it, it is going to be a statement of the bleedin’ obvious.

The rich are bound to live longer in general because they have more control of their lives. As a child I used to get bronchitis, because it was cold and damp in 1960s London before central heating. I never had it after my mid 20s – because I didn’t live in exceptionally damp and cold houses.
If you are poor you will fill yourself and your kids up with cheap carbs. That won’t be that varied, it will be ultra processed foods with all the problems that go with that, and that will not do you any good in the long run. There are whole supermarket aisles that I don’t recognize as food – nobody needs family packs of crisps or tins of noodles in alphabet shapes. Michael Pollan was right – eat foods your grandmother would recognize. But it’s all more time and aggravation. There is very little that can be done about this unless we decide that poverty is not allowed to happen.

Redistribution is very much a no-no in the Truss-Kwasi-verse. It is at the root of what has gone wrong with Britain, arguably redistribution and the everyone’s a winner approach are the Chains that bind Britannia, and This. Will. Not. Do. Any. More.

You know what to do to get out of the firing line.
  • Be rich
  • don’t be disabled
  • don’t be stupid.
  • If you are young enough to have the option, study maths and science at school.
  • If you are shit for brains then simply Work Harder, you’ll get there in the end.
  • Best not have bought a house in the last couple of years, if you have a mortgage, that is. You may be in for some interesting times

Although it’s easy to satirise because of its simplistic approach, there is a lot of truth in Britannia Unchained. Some of their examples haven’t aged well – the admiration for Brazil would hopefully be muted, because while Jair Bolsonaro may well appeal as a strong leader, but de Gaulle’s epithet that Brazil is the country of the future and always will be is ringing more true in the second clause than the first.

I agree with Lasi Trussteng that thirty or forty years the work ethic was stronger in Britain – working class people disliked going on the dole, and there was some sense of pride in not doing so. But there were more jobs right across the ability range 30 or 40 years ago, and the culture was more homogeneous, there was more commonality of media consumption (no talking heads TV and social media thriving on fomenting outrage, for example). People’s expectations were much lower, and they tended to raise their children themselves, rather than going to work and paying others for large amounts of childcare. Everyone was poorer, and there was less wealth disparity. Britannia Unchained will struggle to recreate those times nowadays.

You could make a much better case in the past that work was the path out of poverty. I just don’t think that’s true any more, because a larger and larger proportion of the working-age workforce can’t really add enough value to raise themselves out of poverty.

There is some argument that if people didn’t have children they couldn’t feed 4 they might be better off, and it staggers me that so many people bring up children in poverty, but every technocratic solution to that vector of poverty has ended up creating serious evil if it is coercive, so either everyone else gets bailed in to pay for the fecundity or the progeny have to suffer as a lesser evil.

Even without the problem of children they can’t afford, a life on the minimum wage is probably not going to rich in experiences. The privately educated journalist Polly Toynbee wrote a book about that called Hard Work, and it really doesn’t sound like the greatest amount of fun you can have, and ISTR she got to take some time off, possibly weekends, in her leafy middle-class home.

Liz and Kwasi haven’t gotten off to a good start with their attempt to implement the principles of Britannia Unchained, largely because the markets asked to fund the interim shortfall have taken one look at the project and thought to themselves ‘Nah, not gonna work, not a prayer, guys’ and raised the premium they want to lend against the collateral. The markets would have been a lot more convinced if Lasi Trussteng had first outlined the cost-cutting part of their project:

  • Massive cuts to benefits >10%
  • immiserate the poor in Hoovervilles. Much admiration for US tough love.
  • Public spending cuts – Think 10%. There is admiration for the Canadian cuts a few years before the 2012 publication of Britannia Unchained
  • Privatise the NHS (along the European model, in fairness to them)
  • Raise interest rates closer to the 5-7% long run average for the UK, crushing house prices, which would genuinely improve affordability for the young and transfer capital from the economically inactive oldies. How that will go down with the core Tory constituency remains to be seen
  • Make planning and zoning more like the US, pretty much build anything anywhere
  • Do something about the State Pension to reduce its cost – reduce eligibility, make it payable later, whatever.
  • A smaller State in general, as a matter of principle

Unfortunately they chose to major on the expensive revenue-losing aims first. It’s like going to the bank and talking all about the des res you want to buy on their dime or the flash car, without telling them about the promotion you are going for to be able to afford it. I’m not necessarily of the view that tax cuts are bad in and of themselves, but it would have been a lot better for the market’s ability to digest the great scheme if Lasi Trussteng had got off on the front foot with their savings first.

The problem is that the solutions outlined in Britannia Unchained are going to be unpopular with the voters or the funders. The unique talents of the Liz and Kwasi double act is that they’ve managed to make them unpopular with both. Well done them. Not only that, but they look decidedly shifty in telling the Office of Budget Responsibility to deliver their report six weeks after the October budget. That just looks shifty.

It is theoretically possible to improve the balance of payments by increasing growth, and undoubtedly some of the proposals in Britannia Unchained might increase growth. The trouble with increasing growth in developed economies is twofold. One is that economic growth means working harder, which is a decline in lifestyle for those of us who want to do something other than working with our allotted three-score years and ten. That includes you lot, dear readers, with your reckless FIRE fantasies, just as much as potential candidates for Benefits Street. Britannia Unchained shows a secular decline in working hours in nearly all economies, good luck with turning that round.

The second is represented by all those keen emerging economies and hard-working Asian students that are lauded in the book. There’s a hell of a lot more competition these days. It will be harder to shift the needle on the dial.
As the Torygraph fulminated, most of the self-inflicted wound Liz Truss and her sidekick made was because they didn’t have confidence in their working. There’s something studenty about the whole project, and particularly ill-suited to a crew who spend a fair part of their book spitting bricks about the lack of analytical skills and STEM smarts in the feckless British workers, students and school-leavers.

To get ahead in the new type of jobs you need to be able to reason and think logically.


While improving these skills helps growth, they can’t be restricted to the few. The biggest effect happens when on top of a large number of people with high-level skills almost everyone has the basic and mid-level skills. On the latter measure Britain needs radical measures.

Yup. I would say start with Dear Leader and Crazy Kwasi. Sticking “and then a miracle occurs” in the middle of your working has been disapproved of in the sciences for a very long time.

I saw a copy of this Sidney Harris cartoon, in Felix, the Imperial College student newspaper in the 1980s, and it’s still true forty years later

Show your working Kwasi, and having independent workers replicating it and getting roughly the same answer is even better. Independent workers like the OBR.

There’s a price to pay for unchaining Britain, which is deconstructing many of the things voters have been used to having. The NHS, benefits and pensions cost a hell of a lot of money, and that offer plenty of savings enough to make it all work. It’ll be a tough sell at election time, but if you have to borrow the money to make all the tax cuts eye candy work, you’re going to have to show your working to the bank manager, and show your plan to the voters.

I’ll leave you with what Liz and Kwasi of you, the voting public, as they open Chapter 4, Work Ethic

Once they enter the workplace, the British are among the worst idlers in the world. We work among the lowest hours, we retire early and our productivity is poor. Whereas Indian children aspire to be doctors or businessmen, the British are more interested in football and pop music.

Just as well they didn’t have to sell this project at an election 😉

  1. I was shocked to learn that these days  calculus is deferred to A level maths these days, so perhaps this is a wider problem and Kwasi et all are right. 
  2. Lousy and Lovely Jobs: The Rising Polarization of Work in Britain, Goos and Manning, 2007. 
  3. For you metropolitan city mice that say you haven’t seen anything like that, I have seen unauthorised camping by the poor in some parts of Somerset. This isn’t wild camping or elective #vanlife 
  4. I’m perfectly aware of the social justice warrior argument that having a child is a 16-20 year project and a lot of ruin and misadventure can happen over two decades in a life, particularly with the increasing precarity of work. I have some sympathy for these unfortunates, but they aren’t the majority IMO. Contraception is free on the NHS. This one grates because I recall paying an awful lot of tax and NI towards New Labour’s largesse snowing parents with public money, to such an extent that there’s a hypothesis that Tony Blair was the daddy of the baby boom. At least Truss and Kwarteng approve of this baby boom for giving the bulge of young people now. They don’t give the daddy due credit for his redistributing ways, but they lambast New Labour for driving up public spending in the last couple of years of their tenure. You can’t have it both ways, guys 

Truss mines magic money tree, mithering multitudes marvel at the munificence

Blighty has a new Dear Leader, under what has been an excessive interregnum to feed the ego of a small part of the Tory party. A four-month delay to collect their prognostications is fair enough for a party in opposition, but is far too long to replace an incumbent PM. Would we have had to wait four months in the depths of the pandemic if Bozza had been pasted by Covid? Or if Putin novichoked him or nukes London?

New! Dear Leader says shes is going to fix energy bills, after people have been working themselves up trying to find a way to pay a doubling of rates up to 51p a unit from October, while working minimum wage. After spending four months hollering from the rooftops that she is not in favour of handouts the likely solution looks very like handouts to me 😉 Indeed it looks tremendously Third World to me, subsidising the price of something. La Truss delivered herself of some pithy statements in her former life as a candidate:

On the eve of the price cap announcement, Ms Truss acknowledged that soaring energy bills were a “massive issue”.

But she said the government couldn’t “just bung more money into the system”.

Ms Truss told the hustings in Norwich: “What we need is to fix the supply of energy.

“If people think this problem is going to be over in six months they’re not right.”

I happen to agree with the sentiments, although not for the same reasons. Arguably fixing the supply of energy is a great idea. But to get there you wouldn’t start from here, but perhaps many years ago, although a hat tip should be given to the significant progress that has been made, particularly with offshore wind which is a resource Britain has a lot of, comparatively.

I also agree with Dear Leader that this won’t be over in six months. The well-repeated narrative is that it’s Putin wot done it by turning off the gas pipeline, indeed what surprises me is he didn’t do that earlier, General Winter is an old friend Russia knows well. See Napoleon, Hitler and Monty’s rule one on page one of the book of war. I don’t believe the narrative. Putin supplied the shock, but the response of the market prices shows there is very little spare capacity. I am of the view that this is what the foothills of peak oil looks like. It’s not a sudden bang and turn off all the things. It is increasing scarcity, and scarcity=high prices at first, and then shortages if the prices don’t depress demand enough.

That’s not going to be over in six months, and it may not be over, ever. This doesn’t mean we will be living in caves in five years’ time, but I agree with the former La Truss that the government can’t fix this by just bunging more money into the system. That’s because this money is for rising operating expenses, and while it’s sometimes reasonable to borrow money for capex, it is never a good idea to borrow money for opex.

Net zero is not about saving the planet

It may be politic to give the handout to bills to soften the transition, but it’s an ongoing drain if energy prices are going up because supply is running out of spare capacity. If you think the need for a bung is just as long as it take for Putin to prevail in Ukraine enough to get something he can walk away with, then yes, perhaps it’s a price impulse. The trouble is that the world consumption of fossil fuels shows a steady increase, because population is still increasing, and everyone would like to have an American lifestyle in terms of energy use.

can you see the falling fossil fuel consumption? Me neither

So even if Putin changes his mind, soon rising demand will consume the amount we have lost, and spare capacity is in short supply. For all the hullabaloo about CO2 emissions, humanity ain’t giving up using fossil fuels any time soon. Just look at that chart. There was a Covid retrenchment, but it’s roared back on track.

If you want to reduce CO2 emissions, then carbon capture and storage, which has never been demonstrated at scale, and tends to use a lot of energy itself, is the only way that’s going to happen. The good things about having loads of energy at hand are just so good than nobody is going to think of the  grandchildren. Sure, the West might get to net zero in penance for having been the first out of the block, and that penance will be making the fossil-fuelled air conditioning of a burgeoning Asia and Africa that little bit less expensive by taking some demand off the table.

For a declining part of the world less able to fight its way to the top in 50 years time increasing renewables is arguably not a bad allocation of capital, because electricity is not very storable and not very transmissible at transcontinental scale, so while it can displace some fossil fuel demand it can’t easily be sold to richer bidders. As a way of reducing global CO2 output? Fuhgeddaboutit, that consumption chart will be limited by supply, not going green IMO. You can feel good about the UK dropping its per capita fossil fuel usage from 46MWh per year in 1973 to about 22 in 2021.

You have Thatcher to thank there for destroying heavy industry, and the Arab-Israeli war in 1973 to thank for improving efficiency. There are echoes of 1973 now as well – in general if you do things that piss off your energy suppliers like yelling in their lugholes they are scumbags or supporting their enemies, the price goes up. Our product, our rules was the word in ‘73 too. Sometimes you have to put up with that privation, but pretending it isn’t going to happen won’t take you anywhere good.

The problem with energy is that all the alternative options suck. For an economy in secular decline, they suck bigly. You are likely to have less energy available in future, because it’s dearer, and that’s not something the government can fight. They could try and increase renewables, and they could do something about not tying the price of renewables to the price of gas – perhaps some industrial customers could live with the intermittency of renewables for a cheaper rate. There has been a historic correlation of energy-hungry industries colocating with sources of energy, from the cotton mills oop north with the abundant water power, to aluminium refining occurring near hydropower.

But for y’all at home, it’s gonna get dearer. There’s only so much money Dear Leader can magick up from taxation and borrowing because that’s the trouble with depending on the kindness of strangers It should be noted that some at the Bank of England dispute the former guv’nor’s pithy warning. Apparently Britain has foreign assets worth 4xGDP and is flogging these off at 6% of GDP to fund living above its means. So that’s all tickety-boo then, 66 years until the high-water mark reaches the low-water mark. Should see me out, that’s a SWR of 1.5% so it might even be sustainable, ceteris paribus… The trouble with life is that all things stay equal only in the grave.

We have lived with less energy before, we can do so again. We have some advantages – efficiency is better and control systems are smarter. Against that, energy is used in a lot more places quite diffusely than before the digital revolution of say the 1990s onwards. I started chasing power in the face of future energy rates of £1 for 2kWh. Saving energy at home showed that most commenters had the edge on me in the art of saving energy 😉 Despite that I hit two power hogs and continued chasing, as well as investing in renewables. And oil…

Now that La Truss has declared that the Ofgem increase isn’t going to happen for two years until the next election some of that is perhaps a misallocation of capital, and I am not going to increase my investment in renewables over and above what I have already. I am cheered not to be paying for other people’s heat pumps, solar panels and insulation, though 😉 I know it’s petty, but I don’t want to pay for your green crap through my power bill. I don’t mind too much paying for some green crap, even if it’s the same amount, through taxation1, because CEOs will hopefully get to pay more. There’s a hint of the poll tax in the everyone pays the same amount for the green crap so we don’t have to call it taxation.

Now the magic money tree has been located, well, that’s all fine then. Inquiring mustelid minds are intrigued as to how tens of billions of pounds are going to be magicked up ongoing, the obvious solution is to make those pounds worth a bit less so the job is easier to do. Still, it will reduce near term inflation, which gives me a little bit more time to think. On the other hand, if you look at a chart of the Great British Pound against a basket of other currencies, IMF special drawing rights, I’d say

How many IMF SDRs can 1 GBP buy

going down the toilet is perhaps being charitable. Not as bad as Covid, pretty much the same level as after Brexit. Looks like night has fallen on them sunny uplands, and Putin has knocked about 15% off the value.

  1. FWIW the Ermine is and probably always will be an income tax payer, despite the non particularly economically active status 

Ten years of leisure wrested from The Man

I stopped working for The Man ten years ago, at the end of June. I spent my last working day in the Athlete’s Village in the 2012 Olympics. It was a little bit odd to end my career working off-site, but I had a little bit of annual leave to use up. I did return the The Firm at lunchtime at the end of June for a valedictory round of drinks at a local pub and a send-off, and that was it, three decades of working life came to an end. It was a good way to finish off, on a high as the last manager said. I look at the pictures and they are good, though I see the signs of three years of the stress and the effects of drinking too much to dull the pain.

Not many FI/RE people are still writing after a decade, so here are a few takeaways from the ride. It has been against the background of a long bull run that is only just fading, as the firehose of central bank interventions begins to surrender to the irresistible force of the accumulated pathologies stoked with it.

I did not get bored

Honestly, I still can’t understand why bright young fellows like Monevator still link to cruft like this. Seriously, if work is the best thing you can think of to do with your limited time on Earth, then you need to get out more and get some hinterland in your life. Preferably half a lifetime ago, but now is better than never. I am sure that for 1 or 2% of people their profession is their one true passion. They tend to be outliers, often psychopaths like Elon Musk, or Mark Zuckerberg, and that passion tends to be unbalanced. That leaves over 90% of us who can probably do more congenial things with our time than working, if only we could solve the conundrum of dreadful things happening in our lives if the flow of income from our jobs were to stop. You know, like losing your home or your kids starving, that’s the sort of thing that keeps most of us working past the point that the Do What You Love, Love What You do meme has transmogrified into Suck it Up, Our Way or the Highway. Solving that is what financial independence is about, but too many people end up with Stockholm syndrome with work. The Escape Artist summed up the problem. Don’t just load the gun. Pull the trigger.

The world is plenty interesting enough to reward an inquiring mind and an inquisitive snout. Learning new stuff has never been cheaper or easier, though it pays to remain critical as there is also much more misinformation about. In many areas of factual learning, favour books over online, and I personally almost always favour the written word over video1.

I got less hard-line about working than my younger self, who was running away from a crap situation. But the key takeaway is still the same. Don’t rely on income from work after you have become FI. Save it, spend it on champagne and caviar, but never, ever, set up your life so you depend upon it again. Otherwise you are no longer financially independent. This severely limits what the financially independent can safely do with the proceeds of work.

Spending FI/RE earnings on  lobster is OK. You can live well without lobster, but perhaps better with.

Breaking that rule is fair enough if you opted for thin-FI/RE and came to the conclusion you don’t want to live that way – financial independence is not worth more than anything else, and if you want to live high on the hog, or live in London, or send your kids to private school, then you are probably not going to be financially independent as early as someone who can eschew some of that and drink prosecco rather than Dom Perignon.

Continue reading “Ten years of leisure wrested from The Man”

Fear and loathing in the markets again

The Ermine household decamped to Wales for a few days, near Saundersfoot. Over a decade ago I was halfway through my three-year plan to gain manumission from The Man. The halfway point of any drawn out goal like that is really tough – you have lost the comfort of the port of departure, and are on the stormy uncertain seas without sight of the distant friendly shores.

I was living on roughly the national minimum wage, in order to maximize the benefits of salary sacrifice. This was greatly softened by the fact we owned a house outright and several acres of farmland which Mrs Ermine grew a fair amount of our food. But it was tough, and for a holiday in that period we took two weeks out, touring south Wales in our campervan, staying on campsites. Mrs Ermine has a penchant for spas, and while we stayed at Trevayne Farm campsite one afternoon she sampled the spa, and in the evening I walked down from the campsite and we had dinner at St Brides Spa Hotel. It wasn’t cheap, but not having gone out to a restaurant for a long time the experience was great. Hedonic adaptation means eating out every week gets ho hum, but if you go big once in a while it really hits the spot.

This time we stayed in a flat in Saundersfoot itself, which is a better experience than having to walk back three-quarters of a mile uphill to the campsite, and I got to see more of the strange heritage of the place.

It used to be a coal harbour, and the train ran along the now rather pleasant promenade along to Wiseman’s Bridge going through some tunnels carved through the dark rock, some of them long enough to be a struggle to see your way in the middle.

King’s Quoit, Manorbier

The Wales coast path had some remarkable prehistoric monuments, and we encountered these bad boys with curved crimson bills. I have never seen choughs before.

Chough, Manorbier Bay, Pembrokeshire
Chough, Manorbier Bay, Pembrokeshire

One downside of Saundersfoot beach and walk is it is dog-infested. Despite the council’s fond belief that dog owners can read, my experience is they don’t give a shit about signs, and assume everybody is as delighted to come across their precious pooch as they are. “Oh he won’t bite” they exclaim lamely when two barking rows of drooling teeth jump up at you.

Dogs not allowed on that side of the beach. Except for these ones, because they are special.

The photo, taken around noon on the 11th May, shows that these dogs were special, and rules didn’t apply to them. Neither the rules saying no dogs on that side of the beach, nor the rules saying keep your mutt on a lead, because it’s so much more fun for Fido to race up and down the beach, other beachgoers be damned. That’s bad on the beach, it’s really quite unpleasant in the tunnels.

crisis, what crisis?

I come back after about a week away and Monevator’s Bonfire of the Vanities seems to indicate that it’s been a tough time in the markets of late. GBP investors’ ability to shoot straight is handicapped by the falling pound, which flatters apparent returns.

Looking at my iWeb ISA, it didn’t look so bad, though of course that’s in falling pounds. I sold out a fair amount a little before the turn of the year, because I had done reasonably well coming out of the Covid crash and unicorn shit is on the rise. There is a lot of gold in there, because I had a plan to sell out gold from my ISA and rebuy it in my GIA, and buy income in the ISA with the liberated cash. Because: income tax and inflation.

Although discharging capital gains is a pain, with a gold ETF I can swap some SGLP for a gold ETF run by Wisdom Tree or SPDR, which would harvest capital gains for the cost of the turn.

As it was, I started buying gold in the GIA, but then Putin switched from exercises to war, and although I had started buying income ITs by selling gold in the ISA, I didn’t sell the rest of the gold for cash, so I rather increased my total exposure to gold. I will continue to hold my capital in the ISA as gold rather than cash, selling gold only just as I am buying. For some reason you don’t seem to have to wait for settlement in an ISA, so other than the £5 transaction cost there’s no advantage to selling it for cash ahead of the purchase.

I will admit to a fair amount of schadenfreude about tech, which I viewed as vastly overvalued before, and other than my exposure as part of VWRL didn’t really have much exposure. I do take the point that this will have given up return although I wasn’t quite as heavy on dividend paying equities as GFF, VWRL is my largest equity holding and pays almost diddly squat in yield. 1.56% isn’t going to make anybody fat. One needs £600,000 to capital in VWRL to earn £10k in dividends. I am some way off that. Continue reading “Fear and loathing in the markets again”

Ill fares the land

Ill fares the land to hastening ills a prey
When wealth accumulates and men decay.

The Tory party conference is in full swing and celebratory high-fives, with Lord Frost chuntering that the long bad dream of EU membership is over. Now unlike some of you whippersnappers, I recall what the sick man of Europe looked like in 1973, though as an ankle-biter I wasn’t that economically aware. Ermine Command sent an expeditionary force to the fair city of Oxford. Through the crackling wisps of t’internet came this signal


Our nonplussed forward team commander wondered if they’d picked up the time machine by mistake “I’m in a time slip and it’s Thatcher’s Britain all over again” – at least they’re all set for CDs if they can find a way to put them in their phones.

Continue reading “Ill fares the land”

Fintech Fantasyland – Raisin and Coinbase

In more innocent times once upon a time, I walked into a branch of Barclays opposite where I worked, showed them my staff pass card and 20 pounds to get the ball rolling, and walked out with a shiny new Barclays bank account. No passports, name rank and serial number proof, no pack drill, just me and them. They knew The Firm, they knew what a staff card looked like, and that was good enough. They knew their customer, in an analogue way.

Nowadays the process is grief-stricken and involves webcams picturing your driver’s license(sic) and all sorts of aggravation. I figured I should start to get a teeny bit better return on my cash than 0% as the amount started to creep up to Harry Browne regions, so I was tempted by Hargreaves Lansdown’s Active Savings, on the principle that I already had an account with them, so I wouldn’t have to go through all that customer ID crap. I stopped as soon as I read signing up for active savings means they will always send an SMS to log in, even for my SIPP. I am sick of this stupidity. It’s the easiest job in the world to slam your phone number to some ne’erdowell, particularly if you live in rented accommodation with a shared mail access. But it’s not that hard to do for everyone else.

We had/have a perfectly serviceable alternative – your bank card and one of those reader things to generate a one-time password. But no, it the general fetish to have everything on your damn smartphone, SMS messaging is a less secure alternative they are pushing. Because every bugger has a smartphone surgically implanted, FFS.

The advantage of Active Savings is that you have a single interface to the account, and they then let you save with a number of other organisations without signing up with those separately. Which is good, because the process of signing up for a bank account in the UK is absolutely horrible now with all the ID checks, I’m sick of it.

So I looked for an alternative, and Raisin seems to do the same thing. Given that I have a SIPP with HL, running with a separate FSCS institution seems a good idea anyway, and though I have to suck up the SMS bullshit at least I only have one sign up process to do.

The time to worry about bail-ins is before they happen

If you look at Raisin’s FSCS protection page, once you have signed up for savings account through Raisin, you get the FSCS (or Euro equivalent) protection of the destination institution. One of the biggest drags about savings is having to sign up with many institutions, the implication here is that you could break up your holdings below the 85k FSCS amount all through Raisin, provided you were careful where the destinations were.

There is some argument that holding more than the FSCS limit in cash is mad, unless you are really, really old. However, at current valuations I can see myself doing that for some time. Inflation is not the only hazard I see, and looking at what happened in Cyprus the FSCS limit is roughly where you become a tall poppy and a source of emergency bank funding of last resort.

So far so good, but though Raisin is associated with Starling Bank and I used Starling as a feeder account, it seems to be taking its time to happen – transferred about 10am and only got there 11pm. In general I expect better from Starling, my experience to date has been of quiet, understated competence, and blistering speed at posting details of transactions. Pay for something using the card, and by the time you have picked up the phone and opened the app that transaction is there to be seen in your account right away.  I don’t bother to ask for paper tickets for those card transactions because there’s no point.

For other Starling customers wondering what the hell their sort code is, Starling tell you there is only one: 60-83-71 at the time of writing.

I found Raisin confusing in operation. Some of this of course is that the nominee method of banking is new to me. For example I applied for a 32 days Investec notice account, paying 0.8% APR. Time to order some tiny fireworks, eh? So I get an email saying the Ts and Cs for the Investec savings account you viewed, and I think fine and dandy, to be treated to a pdf with 16 pages of solid cruft about Meteor Asset Management, with nary a peep about Investec. If you look at How Raisin Works you will see that Meteor Asset Management is the pool account front running Raisin’s customers, sort of analogous to a nominee account1, which is how you don’t get to streetfight the onerous Know Your customer crap for each and every share line in your ISA.

I happen to have read the how it works page before getting this 16 page Investec Ts and Cs not mentioning a word about…Investec. I was more tolerant of this rum carry-on because I had already qualified Starling as a competent operation, but that sort of inconsistency is going to scare the horses in customers of a more nervous disposition. Continue reading “Fintech Fantasyland – Raisin and Coinbase”

The Coming Gilded Age and Vanguard’s mustelid indigestion

Diversification is  a decent principle with bank accounts and the like, particularly given the tendency of financial organisations to freeze people’s accounts without due process due to the money laundering regulations. Then there’s the Madoff risk of the unknown unknowns cratering a business. So much to worry about.

1+1 redundancy is a good principle in many things-when I did a parachute jump there was a main and standby. Whether I’d have had the presence of mind to pull the standby1 before becoming a grease spot is another thing, but main and standby is A Good Thing.

To that end I have a second ISA with Charles Stanley as well as the main one with iWeb. The aim here is damage limitation, and you get most of the win with the first standby system you introduce. In theory I could get better security against providers going titsup by balkanising my ISA to try and stay under the FSCS compensation limit. Life is too short for that. Main and standby – and stop there.

My main ISA with iWeb is pretty spit-and-sawdust. Their win is not charging me annual fees, provided I hold no funds (shares and ETFs are fine) and don’t trade. I am OK to pay them transaction fees, the aim here is not to churn. They have no monthly investing facility, and you can’t borrow from the ISA – it isn’t a Flexible ISA.

Flexibility is valuable to people with no income

The financially independent are despised by the banking system, who won’t lend them money because without a salary income they can’t qualify the risk. So it’s handy to be able to borrow from your ISA, though you should never aim to use it. I hung onto my Charles Stanley account for its flexibility, but what with one thing and another it tended to grow, and CS jacked up their fees a while back. This begins to irk me. According to the Great God Monevator, CS rocks in at 0.35% where Vanguard are 0.15%. The difference in that makes it slightly worth while to shift as the account gets larger. As an old git I don’t need to flay costs as if they were the tattooed agents of darkness is the same way as TA, because I am a decumulator, and there aren’t as many decades to accumulate as for a 20-something. On the other hand I carry a lot of gold in the iWeb ISA and have shifted my risk balance lower, so maybe I do need to up the ante on the equity part. I was pointed toward the behemoth Vanguard as a lower-cost supplier with a flexible facility via a comment on Monevator. Although flexible access tends not to be a bargain basement offering, Vanguard do indeed offer it. To wit

The Vanguard ISA is a “flexible” ISA, meaning that money you withdraw may generally be paid back in during the same tax year without counting towards your annual allowance

Don’t transfer your old ISA as your first act. Because: AML theatre/freezes

Continue reading “The Coming Gilded Age and Vanguard’s mustelid indigestion”

This won’t be over by Christmas in Brexitland

Ah, bless. Remember July, when we were all camping and heating up the barbie and it was all going to be over by Christmas?

Hostage to fortune, mate, and you lot can’t plan your way out of a paper bag, it’s been firefighting all the way. Do or do not, do not try.The usual wingnuts from the torygraph and unHerd are fulminating, they may as well hold their breath.

We have long argued that the country needs to live with this virus. […]

The alternative is to protect the vulnerable while letting normal life continue for most people. Older people who do not wish to be locked away can make their own choices knowing the risks.

Don’t sweat it, guys, it’s what’s going to happen anyway. After Cominic Dummings’ little escapade because he is such a sociopathic Billy No Mates he couldn’t find anyone to do his childcare in London, you can’t tell any bugger what to do.  We’ll be battle testing herd immunity by default. We got there in the end, 40 years after I played this track at university.

Weed out the weaklings…

And WTF is it with all the over-acting emphasis Bozza? Don’t they have decent drama school and elocution in Eton? Less of the lunging into the damn camera, and perhaps engage brain before opening trap? Nah, it’ll never catch on, and anyway, we’ve had enough of experts. Funny how Boz is so uniquely unsuited to wrangling something with the potential to kill people. I’m not convinced that it’s the end of the beginning yet. Boz really did need to pay attention at drama school. This, dear boy, is how you deliver that sort of news:

BoJo’s emphasis is all wrong and his cadence sucks, he’s trying too hard. If you want to know who to take people with you, listen to Donald Trump – he gets that right. He can talk absolute bullshit but make it sound right.

Socrates called out the problem of the unwilling leader being better qualified than those who really, really want the job, though he didn’t crack the implementation problem. Bozza is proof positive, he’s a good-time guy who wanted to get Brexit done, not fight bugs. Be careful what you wish for…

Capitalism gears up to ream the poor at Christmas

Anyway, it was clearly bollocks that it’ll be over by Christmas. What’s more, capitalism red in tooth and claw is tooling up to ream the poor, and the recently unemployed anyone else.

Beware the plastic

The Bank of England fondly believed that shitting on savers would give borrowers a break.While they did shit on savers they gifted ‘investors1‘ a doozy, which is how after a near death experience in Spring your equity portfolio is worth more, though about 10% of the UK economy has been burned.

Dunno what the heck they are smoking in Threadneedle Street, but it is strong. For starters lending money to people who have just lost their jobs is a risky biz in the first place, it’s about return of capital as well as the return on capital. Personally I’d also charge people more around Christmas anyway, because parents who are unable to tell their kids that Christmas is cancelled this year are unlikely to have the fortitude to do what it takes to pay this borrowing back under adverse conditions. Ten years ago in the midst of the GFC I suggested Charlotte tell her precious ankle-biter that Christmas is off, and the problem remains the same. Different perps, different kids, but Christmas is an elective spend, and it’s likely to be a tough time this year. Elect not to spend, rent and power before pressies. Tragically, there will be many who won’t have the option of either. If you have no assets, there is an argument to hit the old CC hard and fast, knowing you will never pay it off, but the IVA/bankruptcy option does rob you of some options in future. Given this hit is hopefully a one-off, then it’s a hard call. Going IVA/bankrupt may make it harder to rent a place or get some jobs…

Same old shit, different decade

Maybe we should have a guest appearance from Shona Sibary, she of the too many kids and the unawareness2 that you’re actually supposed to pay off a mortgage, plus if you use a string of fixes to borrow more than you can afford you make yourself a hostage to fortune in market crashes.

Lenders gonna lend, and you have to make money. They’re more Chuck Colson than FDR on this,

“If you’ve got them by the balls, their hearts and minds will follow”.

If the Bank of England was really that troubled about hard-working families getting a dreary Christmas then they could always lob money out of helicopters themselves, rather than getting credit card companies to do the dirty work for them. I guess Rishi might disapprove, but hey, whatever works, my friend.

As living proof of this incipient reaming of the newly unemployed, I received the following mealy-mouthed missive from a bank:

We want to help you manage your borrowing and ensure your overdraft limit is right for you. As you haven’t used your overdraft for a while, we’re planning to reduce this from £3,150 to £1,300 on 27 November 2020. Your new overdraft limit is still above the most you have used on your account in the last six months.

Well, thanks a bunch. I’ll have you know that I haven’t used my overdraft for the last fricking ten years, I can’t remember ever using it and it will have been cock-up anyway. However, you cynical punks are clearly expecting me to lose my job by Christmas and don’t want to be left holding the baby, eh? Well, you can f*ck right off and stick your overdraft where the sun don’t shine, busters.

Help me manage my borrowing? WTAF?

We’re in the chest-beating and mutual hollering abuse stage on Brexit

It was always going to get to this. Personally I’m of the view that too many Tories want a no-deal Brexit and there’s another four years to spin it as all t’other side’s fault. But perhaps all the chest-beating is just a phase we are going to have to go through.

In this crossfire, the Ermine needs to work out to preserve capital across the Brexit interregnum. I grouped together the bits from shorting earlier this year, reserves and I have enough for next year’s ISA before becoming a net decumulator.

I have ‘invested3‘ in SGLP, I will tolerate some cash in NS&I ILSCs, and some more in premium bonds. Now that does expose me a bit to Government cash grabs in the troubled fiscal future, as well as the lessening of the greatness of British Pounds to buy stuff, but the combined amount is less than the FSCS limit. Not that that pertains to NS&I anyway. I need to work out what I am going to hold the value of next year’s ISA contribution in. Gold via SGLP is one option, but I start getting seriously exposed to the gold price.

There’s still time before Brexit once October is gone, with it’s nasty tendency to downside violence in the markets, and perhaps if we know whether Trump will finish the job of Making America Great Again. Although my shares ISA is rammed, I could start to deploy the next year’s allowance into a trading account, and then bed and ISA the shares into the ISA after March. I am unlikely to be hammered for capital gains on £20k worth of say VWRL, although I suppose it depends on how well Bojo and his mates respond to the FXmarket singing ‘how low can you go’ about the GBP in the background.

There aren’t any good options here. Just less bad ones…


  1. That’s you and me trying to make sense of what will hold value into the storm. assuming you have capital. God knows, but I suspect valuations are not representative of value. This too will pass. That’s better for you if you have 30 years of investment horizon rather than two, but hey ho, I have had a good run since the GFC. If I buy VWRL, I am not under the impression I an ‘investing’ in productive assets at good value these days. More I am disinvesting in great British pounds. It’s a race to the bottom. 
  2. Some of it is she’s having a larf and needs column-inches, her story about running away from Devon and how to fix the First World problem of puppies turning into dogs were designed to get a rise, along with the power of phenergan elixir to quieten your rugrats on flights ;) 
  3. Ah, the i-word again. Nobody invests in gold – it’s noted for not adding value, unlike farms and companies. It’s a pure fear play, trying to hold value against a storm. 

Strong in these padawan, recency bias is

Thus quoth ZXSpectrum48k, over on Monevator. From a fellow who does this as a day job, looking at the legions of wannabe escapees from the office


Socrates was the counterfactual, though he defined the Dunning-Kruger problem in his first sentence.

for he knows nothing, and thinks that he knows. I neither know nor think that I know

Or Plato talking about Socrates.
whatever, there still be truth in it

It is part of the way of the world – the young fellow must be ignorant to his faults to make his way in the world and try and put his ding in the universe. ZX was also talking of the younger ermine, and probably even of me now, after all, how would I know 😉

You don’t often get away with thinking that you know, when you don’t. Particularly in the markets. Somehow TA’s article showed that in a harsh light. Let us look at the thrust of his article Should you use cash to bridge the gap between your ISAs and your pension?

In it, TA postulates saving ten years worth of cash, to bridge your spending over 10 years between retiring early (the RE part of FIRE), and reaching 57, the earliest point the Agglomerator, hero of his journey, gets to access their tax-privileged pension savings (SIPP). I confess I haven’t studied his derivation of that requirement, but I was only a little bit older than his putative future Millennial when I packed in work, I was very early fifties whereas Agglomerator wants to clear the workforce at 46.

Let’s just zoom out a little and put that into perspective, the Agglomerator enters the workforce at 21 on leaving university, and clears it at 46, so he works for 25 years. In that 25 years, somehow he saves 10 years of spending as cash and about twice that much in tax-privileged accounts to see him out. That looks like a massive ask to me, saving effectively 30 years of essential spend1 along with buying a house outright and establishing himself.

Today’s FIRE community is very different from that 10 years ago

For a start, fat FIRE is a much bigger thing than it was in the past. When I started it was about frugality first

UK Personal Finance Blogosphere, Source:

there are only 5/13 left standing (I haven’t counted those that haven’t been updated for over a year). It shows how different the world is now that it was just over ten years ago when I started down the FI/RE track. It was about saving and frugality.

Why was this – it was just after the GFC, people didn’t really believe the stock market would come good. Apart from Monevator, who sounded the clarion call into the low-water mark – git your ass into this market- NOW. However, valuations were such that you could get a decent return on shovelling money into that market. Although you were never going to retire early making minimum wage, you didn’t need the fancy City finance pay packet.

Today’s FIRE community is much, much richer than that of ten years ago. Some of that reflects these high valuations – if you want to accumulate enough to retire early now it’s a much tougher job. A safe withdrawal rate of 5% was conceivable in 2009, it’s much lower now, simply because valuations are higher. You need to be working in finance to get enough. There’s much more emphasis on fat FIRE now – starting off with a lot more, and spending at much higher levels. The frugalistas have been run out of town.

If you’re starting out, that’s not so bad, I have the suspicion that valuations will become more reasonable2 in the not too distant future, you need to keep buying into it. You have three decades.

But if you need to make it all happen in five years starting yesterday, then it’s going to be tough sledding. And I would imagine that a lot of getting-on-for-fifty-somethings are going to find themselves heading towards early retirement this year and next.

Talking of padawan, bless my younger self’s cotton socks, I thought I would have edge in sectors. Then I chased the HYP, is some ways because after a GFC yield was easy to find. Dunning and Kruger would be proud of me. I did do well. But not for the reasons I believed. I have no particular edge is stockpicking. But I was next to an open goal. Truth be told it didn’t really matter what you bought at that time. Valuations were in the dumps. My big win was to buy anything. I would probably have done better buying VWRL, except it didn’t exist in 2009 and before the RDR there were all sorts of dodgy practices to do with funds and backhanders. I was weak on the US market, which has been on a tear for most of that time. But I bought in at a low, and while I would have been better off buying a broad index, getting the timing right trumped sector allocation.

It’s not what I bought, it was when I bought – at low valuations. The rest of the journey was slowly coming to the conclusion that I am still a padawan, though not hopelessly so. I did OK, such that now, marked to market at high valuations (now) I have more capital than market to market at low valuations (the GFC) despite living off investment return over the last 8 years.

TA’s article says I was nuts. I agree, if I were starting now being balls-deep in equities other than three years’ essential spend would be crazy. It was less nuts starting from low valuations, because it is the truth that passivistas never allow to be heard – valuation matters, and the other name for that is market timing  😉 . But Dunning-Kruger probably would have the last laugh, because if TA went back in time to the younger Ermine and said ‘my crystal ball tells me you have to have enough cash to carry you for the next 8 years, what do you know that I don’t?‘ I am not sure that the younger ermine would have puffed up his furry chest and say ‘traveller from the future, valuations are historically low now, so the risk is much lower than it will be in your time.‘ TA wasn’t there, though Monevator said pretty much that at the time in his if not now, when?

A tale of desperation against logic

We are all, of course, the hero of our own narrative. Using the flight  analogy from a few weeks ago, I ready myself for the eight lean years in a flimsy craft, refuelling and seeing fire streaking across the runway behind. I am faced with the choice of wealth or health, and choose health. TA would not have cleared me for take-off, I did not have eight years cash saved, I did not have enough to bridge the gap. But enough to be prepared to take the chance. Against the backdrop of the GFC, the increasing value of the shareholdings stiffened the spine enough that I felt I could make it, though I did have to experience the lean years, particularly at the beginning. But in the years after the GFC, many people were skint. The ask is much, much higher now.

The Ermine cast a cynical eye at the Bank of England’s UK’s implied inflation forward curve (H/T Monevator’s should you use cash to bridge gap between your ISA and pension) and thought to myself flipping ‘eck, you lot must think we are born yesterday.

Look at the sedate trajectory On the one hand they’re expecting to write lots of letters to the Chancellor on how they cocked up bringing inflation down to 2%, indeed this will be a regular event for the rest of my lifetime. The Bank of England has a lot of finance bods much smarter than me, and I am sure that they will say well, hey, this is what is implied by the yield curves, it’s not our opinion. Sort of like a variant on guns don’t kill people, people do. Nothing to do with us, guv, it’s wot the market numbers say.

All over the decadent demise of the Western world there is this refusal to take responsibility for the consequences of our actions in favour of magical thinking. I’m all for magical thinking, but in that case let’s have some magic back, eh, rather than pretending we’re all materialist rationalists. Smells and bells, please. At least some of the ride will be more fun. Meanwhile

You’re having a larf, guys

In an exceptionally paranoid moment the ermine looked at what I expect coronavirus to do to the economy, followed by a quick one-two of Brexit, and figured that I see inflation in my future. In the BofE’s favour, if we take a look at the UK inflation rate history

UK historical inflation (CPI) Macrotrends

it looks not so different from the B of E’s prognostications, if we stick to the last 40 years. We have to go back nearly 30 years to the last time it was over 5%. Case proven, m’lud. Along with history, inflation has ended. Obviously you need some inflation, else capital will sit back on its lardy butt rather than get out into the world making good stuff happen in theory, but we’re sorted as far as inflation taking off. Hmm. In other news

We seem to be suffering a general competence deficit

We seem to be suffering a major competence deficit these days. In the battle between ability and craftiness, everyone seems to be losing their grip. The malefic Dominic Cummings seems to losing his mojo – starry-eyed for Big Data, his feet of clay show when it comes to hiring people to do anything with it. Obviously you ask your mates first, because, well, corrupt bastards are like that. He’s of the view that leadership in politics requires a science degree, but his own ancient and modern history degree from Oxford clearly failed him in his/our hour of need. He’s unable to find competence in handling data.

If the answer to your data processing job is Excel, the question is wrong

Back in the day, the Ermine was chatting to the guy at the next desk, who was tasked with keeping records of set-top boxes. Now I had an electronics, not software background, but he was planning on keeping this in Microsoft Excel. “Your problem there,” opined the Ermine, “is that you can’t do ‘owt with the data. What you need is a database”. This guy was going to try and search for repeating faults and that sort of jazz. Now you can do that is Excel, but it’s a bit like Samuel Johnson’s quip about a dog waking on its hind legs, it’s not so much that it’s done well, it is that it’s possible at all. It grinds to ever slower after about a thousand records – I discovered this the hard way when running the records of a club that had about 1500 members at its high water point. I switched to Access3 after about 500 members.

The trouble is everybody can understand Excel, whereas getting your data into a database is a different level of abstraction. Even in DOS days, dBaseIV had the edge on Lotus 123, though wrangling the forms to make it work was a nightmare.

Excel just isn’t designed to handle huge amounts of data – wrong tool, wrong job. This fellow might have had a hundred thousand set-top box ids, and Excel was only good for 65535 rows back then. You don’t use Excel for massive lots of data. I’d get off that wagon at more than 5000 data points, so you don’t use Excel for tracking your set-top boxes. Or your coronavirus victims

Now in fairness to our Dom, he’s busy getting his mates to do his data munging, falling for the old saw of anonymised data. The trouble with AI and Big Data in particular is that the aim is to de-anonymise everything.  AI looks intelligent because it cross-correlates everything, at scale. The public data Dom’s giving his buddies may well be anonymised on its own, but when combined with other data the keys to the kingdom often show up.

Now is the winter of our discontent[…]
I am determined to prove a villain
And hate the idle pleasures of these days.
Plots have I laid, inductions dangerous,
By drunken prophecies, libels and dreams,

This lot seem to have skipped a few lines of Richard III, and gone straight on to the doing evil. The thing that’s saving the rest of us is the competence deficit – in driving out Brexit non-believers, they seem to also have driven out anybody who can spot a bad idea miles away. Or indeed anybody who’s got a clue. Funny old thing, that… Correlation is not causation, eh, Dom?

Brexit zealotry doesn’t seem to correlate with competence

Perhaps driving out those who had a clue was the point – disaster capitalism unfolding before our eyes. Never let a good crisis go to waste and all that. Perhaps it has to be the way- you need moronic slavishness to the Brexit Ideal to Get Brexit Done, and perhaps afterwards we can engage people who understand the art of compromise. A little bit of that on t’other side wouldn’t go amiss, either, but we have to stick with what we can change…

I’m sure we will trade with other people after Brexit. But let’s get some people who can talk in a civilised manner to others, eh, rather than yelling we have the sovereign right to do exactly as we damn well please, and thanks for all the fish. That’s an awful long way towards the Juche doctrine of North Korea, and I suggest Brits are a little bit too soft and used to their creature comforts to want to pay that sort of price for absolute sovereignty, regardless of what Jacob Rees-Mogg and his disaster capitalism compadres in the European Research Group have to say about vassal states.

I am old enough to just remember 1973. Britain was a lot more self-sufficient in many things then, like food and cars for instance, than it is now. We weren’t that good at a lot of this, which was roughly why we signed up to the Common Market as it was then  – we were the sick man of Europe, economically speaking. However, the issues raised by James Goldsmith of the Referendum Party weren’t ever addressed with Maastricht. Brexit will definitely fix those. A little bit like burning the house down fixes bad wallpaper, but some non-ERG eyes can probably make Brexit work right after a few years. Britain’s economy did sort of work before 1973, and hopefully we have all learned something in the intervening 47 years. Just for God’s sake keep the British Eton-educated whazzocks away from leadership of our companies, particularly any that make cars, it took foreign management to make Britain’s car factories make cars that were worth buying…

work is not the route out of poverty for the ability-challenged or those with more children than skill

I confess I will struggle to drum up sympathy for the Red Wall if they find they are vassals to British plutocrats rather than EU technocrats. True, they weren’t to know of the coronavirus pandemic, but the deep compassion for those who fall on hard times of the crew that they voted in to Get Brexit Done has been hidden in plain sight for a very long time.

I still remember the relatively benign version of that looking for my first job nearly 40 years ago, it scared the hell enough out of me to never take any time between jobs until I packed work in for the last time. The experience of being unemployed in Britain doesn’t seem to have improved between Margaret Thatcher and the punitive and nasty Universal Credit.

Let’s take a look at the latest tweets by the bell-ends at the DWP about Job Entry Targeted Support.

Translated: People on the scheme which get a personal DWP goon on minimum wage who is incentivised to make your life a misery and get you to apply for endless jobs for which your skills and personal circumstances don’t fit you

Personalised, like the red dot from a rifle. The personal adviser will be targeted to make your life miserable. If you want to cop a feel of the quality of the personalised advice, knock yourself out on the careers advice beta to gauge the accuracy.In the case of the Ermine, that’ll be

ORLY? The last time I had anything to do with sports was the very last time i packed my PE kit away at school, in the late 1970s…

Because there is a fundamental truth here. Britain is a rich, First World country. That means the cost of living is higher here than in many other places.

Sadly, Brits are not, on average, cleverer than other people. We’re average. Quelle surprise, eh? As a result, the sort of jobs available in the UK that pay enough to live on need to demand a higher level of skill than the global average, and the bar is increasing all the time4. Because: globalisation. If you thought Brexit is going to fix globalisation, then you should have been more careful about the people you gave the keys to.

Elementary logic shows that the result of increasing skill requirements is that fewer and fewer people will be able to earn enough for the average cost of living. Some of them won’t be bright enough. Some of them will have had children too early in life, or split up with the other party involved. That means you won’t have enough time to get a full-time job. As a society while we mouth platitudes about wanting to make up the difference, by our actions we clearly don’t care that much to be prepared to carry your choices for years and years.

We have hidden this in the past by increasing the number of shit jobs in the economy, things that should have been done by machine or not done at all, and priced these at minimum wage. It is one of the reasons why productivity has gone down the toilet in the UK since the credit crunch. For contrast, I started work when this was about 55 on that scale, and left when it was about 95. Britain got better off while I was at work – not due to me I hasten to add. You need an increase in productivity to address poverty. There has to be more shit to go around per head for the country as a whole to get better off – it is a necessary but not sufficient condition.

UK per capita productivity, it’s less than it was in 2016, and pretty flat since the GFC. Source: ONS

There’s only so far this can go. Another way we are hiding this is to create a punitive DWP system for the un(der)employed called Universal Credit, employ young graduates who can read and write to be mean to people who perhaps have literacy issues or generally can’t stand filling in forms. We incentivise the graduates to disenfrachise as many of their ‘clients’ as possible so that they keep their sort-of middle-class jobs, while making it all look like the clients’ fault that they don’t have the natural ability to get/hold a job that pays enough to live on.

Let’s not even start on what we do to the physically and mentally ill, eh? We just don’t care. Oh and then we wring our hands about the amount of homelessness.

Now I’m not saying I am clever enough to know the solution to this problem, but I have learned over several decades is that whistling a tune and repeating inappropriate platitudes like ‘work is the route out of poverty’ isn’t the way to fix the problem. It would be more honest simply to tell some of the people with insufficient skills or chaotic lifestyle choices that there is nothing we are prepared to do for you. Work is not the route out of poverty, for the simple reason that the cost of living is too high in Britain to keep a roof over your head on anything less than the full-time minimum wage, and there are too many people in the UK who don’t have enough aptitude to add enough value to something to even justify the minimum wage.

Some people are seriously short of basic life skills, like recognising food 😉

Ceci n’est pas food

Microsoft offered me this picture of a field of Halloween pumpkins in some American field. It’s a little bit weird, a tad Magritte, IMO. How do I know it’s American – there are no trees, hedgerows, we don’t have one-armed pylons unless there’s a really good reason and we don’t run our railway tracks with no guarding, and I don’t think I’ve seen boxcars like that.

However, it’s in keeping – Halloween never used to be a retail-fest or even A Big Thing until about 30 years ago, and it’s been pushed like hell, imported from Over There. It’s still rather disturbing that a significant proportion of British parents were presumably raised by wolves themselves in being unaware that you can eat what’s inside pumpkins5. Although I had no idea how they grew, I was aware of this by the time I left home, though it wasn’t particularly useful information as Halloween wasn’t a big thing, and I am child-free anyway 😉

However, I am with hubbub – eat your damn pumpkins FFS 😉 Tossing 90% of the pumpkins we grow is just plain rude. Mrs Ermine grows these smaller ones which look the part but taste better. We don’t need to carve them, but with cucurbits size does not correlate with flavour IMO.

It’s not so much that the big supermarket ones will taste horrible, the main failure mode is to taste of nothing much at all. Think marrows as opposed to courgettes. Having said that, if it tastes bitter, then toss it out. Pretty much a rule of everything to do with eating really, but according the the RHS bitter squash can give you bellyache if it doesn’t breed true. So don’t seed save curcubits unless you know what you are doing.

Last year I was in Morrissons and they actually labelled their Halloween pumpkins as ‘not for human consumption’, which makes me wonder what the hell they spray the buggers with. And quite frankly, parents, maybe you want to ask yourselves, if you buy this sort of contaminated shit for your kids, then what sort of world you are encouraging capitalism to build for them?

  1. I know, he doesn’t keep it all in cash and gets some return on his money. But the maths works out at enough for 30 years essential spend, even if it isn’t deployed in that way. 
  2. Valuations becoming more reasonable is otherwise known as a bear market 
  3. Before all the DBAs take the piss, Microsoft Access was the right solution for a club database, easy enough to a tyro to make it work. If it didn’t, the result was going to be embarrassment rather than death. I’m not saying PHE should have used Access ;) 
  4. I took my O levels in the mid 1970s. The typical class sizes of my grammar school was 31, but after the O levels class sizes were about half, because half the kids had gone into the world of work. They were fixing cars, helping in businesses, all without A levels or a degree. I saw far more people as a child building the Goldsmith’s College halls of residence than I saw on the entire Olympic Athlete’s Village building site in 2012. You wouldn’t need to be able to read and write as a hod carrier in the 1970s, I saw nobody carrying bricks onto the scaffolding up a ladder in 2012, there were mechanacal aids t do that. 
  5. While I despise Halloween for being a jumped up capitalist consumerism-fest, rather than an honourable celebration of the turning of the seasons/harvest festival/thinning of the veil, the truth is that parents who eat their pumpkins with their kids and then carve jack o’lanterns out of them use more of the fruit than I do. Upcycling writ large and they should be applauded! 

ermine egging on the economy

Monday 15th June was allocated to opening non-essential shopping in England, and it seems to have gone down a storm. Boris would like a word with y’all

Boris, me old buddy, the prospect of 10% unemployment1 is heading towards these punters you’re exhorting to shop with confidence. Isn’t it better to shop with confidence you will have a job to pay for your consumerism first? Not sure I’d start with Westfield either, I don’t have fond memories of my last visit to Westfield – a food desert of overpriced junk.

Nevertheless, we decided to go egg on the economy the Ermine way, so we headed off to the South Coast. Mrs Ermine wanted to swim in the sea. She was much taken with it – on the south coast you can see some depth into the water, which is a step up from doing that in the North Sea, which is pretty murky.

Personally I can’t understand the attraction – you get salt in your hair and sand everywhere. I am a weak swimmer, however, and when I hear this sort of thing then I just don’t fancy my chances at all.

Indeed Mrs Ermine started talking of rampant consumerism – she is thinking of getting a snorkel and fins. I was picturing this sort of thing and wondered if that’s really a kindness on a public beach. Suppose it’s one way of encouraging social distancing


Apparently she means flippers. That’s future consumerism. We had more immediate requirements for consumerism, and dropped £60 on this,

a whole lobster in halves

and mighty fine it was too. We got to eat it on a table, but we had to provide that and the eating irons ourselves – we had it in our camper van in the National Trust car park. Call me timid, but I think trying to wrangle half a lobster on one’s knees using a blunt wooden fork could easily end up a tragic waste of fine seafood.

Although we were doing our bit for Britain, personally I think that hospitality is toast. This sort of thing is all very well in midsummer, but it’s going to suck bricks in winter

physically distanced queue to get chow is OK in summer…

plus there’s still rent and maintenance on the buildings that you can’t turn a profit on. Sure, you need the kitchens, but there’s a lot of wasted space on the eatery. Perhaps they will have got that sorted by Autumn, because al fresco dining in the rain isn’t the cheeriest prospect in the world. Margins seem razor-thin in the restaurant trade. Second-hand catering equipment and premises will probably be very cheap next year, perhaps it is down to a new generation of restaurateurs to build the new world out of the ashes of the old. Continue reading “ermine egging on the economy”