The Sunday Ishmael 31st May 2020

 Scientific and health advice suggests that it is far too early to ease lockdown, if the purpose of lockdown was to slow the spread of the coronavirus. It is entirely justified, however, in order to distract attention from those who have contemptuously and with impunity  breached it, to give a Parliamentary imprimatur to what is happening anyway, and maybe avoid a summer of rioting as predicted earlier in these pages.

Trafalgar Square George Floyd rally 31/05/20

With America still burning

George Floyd protests in American cities

And Emily upsetting her bosses by telling the truth

Emily modestly dressed for once

We must turn our thoughts to the Eck-onomy and how we can do our bit to save the nation. Maybe it will help if the younger mr ishmael helps us to understand how this money thing works. 

Writing in 1987:

Me and the Pound

The pound is holding its own against a basketful of currencies

I am 37 years old, and, for what it’s worth, I have an Ordinary (very ordinary if you ask me) National Diploma in Business Studies. I also have an A level in Accounting as well as O levels in Commerce – Commerce is a sort of Economics for beginners, it explains how banks borrow money from poor people and lend it to rich people and how the insurance business is a license to print money – and in Economic Geography. I know better than most where rubber, pineapples and printed circuits come from. Sometimes, like when I’m talking to Mark, a boy whose knowledge of current affairs starts and ends with Top of the Pops, I think that I have a better than average grasp of matters geopolitical. I know, for instance, that the Nicaraguan Government, like the Chilean one before it, are basically ok guys, it’s just that they prefer Karl Marx and Fidel Castro to Cecil B. DeMille and John Ford, so, obviously, they’d be better off murdered by the C.I.A., better dead than red. I don’t like to brag about it but I’ve seen forbidden BBC videonasties about satellites and so I guess I’ve broken the Official Secrets Act. I know, too, that there are some unanswered questions about the sinking of the Belgrano and the bombing of four-year-old Libyan terrorists. And I’m one hundred per cent certain that we’d be better off having a plague of locusts than being protected by Star Wars. But the pound and a basket of currencies? Well, I’m afraid that’s a mystery to me.

You know what it’s like when you see Peter Sissons on the lunchtime news programme. He’s done all his world coverage, interviewed a couple of pundits about the latest police killing, shuffled his papers around – like he’d actually been reading from them – and then he takes a deep breath: “In the City the Financial Times Share Index is up 2 points to 1876.4 and the pound gained against a basketful of currencies”. It’s as though I’ve been reading an ordinary novel and, all of a sudden I turn the page and it’s in Sanskrit; meaningless phrases and numbers jangle like some intergalactic shipping forecast.

When I watch it in the evening it’s not so bad. Right after the Royal Family update or human interest story Alastair Burnett, in heavy, statesperson-like tones says: “In the City the FT index closed at blah-blah-blah, a drop of 3 points and the pound, following a day of election rumours, closed at 1.764932 against the dollar, a drop of 2 points. Goodnight Majesties, Royal Highnesses and exalted persons everywhere”. You know where you are with News at Ten. It’s all rubbish. The Queen Mum is out of hospital, Princess Margaret is sober, Prince Edward is firmly heterosexual and Princess Diana has a new pair of tights, or possibly vice versa. Cardboard cut-out Kings and Queens, fairy tale romances, soldiers and horses, castles and palaces. All’s well that ends well.

But what about the pound? What does it all mean? Well, it seems to me that some people have so much money that they use it to buy other money. (Really) They’re not happy having bundles of money, more than they can possibly spend. They want more. They want different money. They want the best money that money can buy. Having billions of pounds is no good to them. They’ve got to have the very best of everything. Yen, Marks or Pfennigs, doesn’t matter which, just as long as it’s worth more than something else. (Some people call this free enterprise. Other people call it greed.) What happens is that they wake up in the morning and decide they want some marks. They get on the Carphone to the broker and say “buy me a hundred million quid’s worth of marks (or dollars or yen)”. Now, somewhere in the City, word of this gets out. Nobody wants to be stuck with a warehouse full of pounds when somebody else is buying marks. So everybody starts swapping their pounds for marks. And then the guys with the marks say to themselves: “Donner und Blitzen, wait a minute. If everybody wants to buy our money it’s gotta be worth more than we’re charging for it. Jack the price up Mein Herren.” Supply and Demand. The guys who bought early – cheap - are grinning like Cheshire cats and ordering up matching his’n’hers Porsches or Lamborghinis and the guys stuck with the pounds – which are worth only a few pennies less than yesterday – are drowning their sorrows in Champagne and snorting a bit more coke than usual. The result, meantime, for the rest of us, is a strong mark and a weak pound and millions of Germans over here on their holidays, cluttering the place up with their Audis, buying up Harrods and having the best time of their lives since Dunkirk.

Sometimes it works the other way ‘round. The pound gets bought and the other stuff gets sold. It means that your window cleaner can go bombing off round America for his holidays, and bringing home more than he could last year. Like AIDS. But what that means is that it’s difficult to export things to America because as a result of, for instance, the dollar being weak, the yanks have to fork out more of them for their imports and so they’ve got less money left over for bombing the Libyans and Nicaraguans; less money for microwaving everybody from space and less money to spend on generally ripping the guts out of the third world.

Now when Wall Street catches a cold Threadneedle Street doesn’t just shiver, it nearly shakes itself apart. With a strong pound and a weak dollar everybody’s in trouble. Just like you’d expect when the richest people on earth have to pay more than they want to for things. If Americans begin to think that what they do unto others is being done unto them then we’d all better look out. They start smacking import taxes on whisky, gin, Rolls Royces and the like. What that means, as everybody knows, is that people like the Guinesses have less money to give their children to buy heroin with. Less money to spend paying off Judges and less money to spend on bribing both the government and their buddies in the City (who are often the same people). So, to make good the deficit, to satisfy the shareholders, that’s to say themselves and their families, they have to throw some more people on the dole or into prison. As we know they are not averse to doing that. But sometimes they think to themselves that perhaps if there’s too much unemployment their party’ll be ditched at the polls and, heaven forfend, they’ll all be nationalised. So what they do is they all get together and say, “Look, chaps, we’ve had a good run, let’s get things back on an even keel, let’s everybody buy some dollars and get rid of some pounds. We’ll all know well in advance so we won’t lose too much money, the Americans will feel better and anyway all the national assets are going for a song. We’ll make a killing on British Airways. We’ll stick a couple of politicians on the idiot box to explain it all to the proles. You buy some shares for me and I’ll buy some for you.”

It’s just the same with the oil. Have you ever noticed? When there’s a shortage the price of petrol goes up. And when there’s too much the price goes up. When the arabs are in agreement with themselves the motorist has to take diabolical liberties with his flexible friend. And when the arabs are falling out with themselves he has to do the same thing. And it’s not just the arabs. When the oil companies strike it rich in the North Sea everybody still has to stump up for the exploration costs, and when they’ve been met, the whole enterprise is sold off at a knockdown price to the chaps in the City. You would think that it couldn’t work the same way under any and all circumstances. But it does. There’s a shortage so we have to pay more. There’s a surplus so we have to pay more. If it’s not the arabs it’s the cost of drilling under the sea. And when the price of petrol goes up it increases the price of everything else and we have inflation.

 Inflation means that the poor have to work harder for less money in order for the people who have more money than they’ll ever need to make more money. (Some people call this wealth creation, other people – the same other people – call it greed.) It also means that the poor pay more taxes – apart from in an election year when all the voters get money, or promises of money, thrown at them – and the rich pay less taxes. This is to encourage the rich to make themselves richer because the poor would be nowhere without the rich. It also means that because the poor have forced the rich to throw them out of work and into prison or onto the dole and the government is obliged to keep them living below, or, failing that, on the poverty line (a figure which the government makes up for itself) they (the government) have only enough money left to arm the police against the poor, buy missiles which they can never fire and finance wars which they can never win. It’s not, then, surprising, that they have no money to spare for schools or hospitals or old people. That doesn’t matter really because the rich, the wealth creators, have private health schemes and private education, both of which are subsidised from the public (that is to say “poor”) sector and most of them, like the Queen and her friends and relations, (some people would describe them as public servants, a national asset – the other bunch would call them parasites) have more houses than they know what to do with.

It’s the same with the butter and cheese and beef mountains and the wine lakes. The farmers, God bless ‘em, are subsidised – paid tons of money – to grow all these surpluses. When they’ve got the money they buy up more land, destroy more countryside, and then demand more subsidies to grow more surpluses which, in turn, go into store for a few years before being sold at less than cost price, not to our own poorfolk, but to, of all people, the Russians. You know, the ones we have to spend billions of pounds defending ourselves against. (I know, actually, what’s going to happen with the Russians. The butter is just a dress rehearsal. The EEC are going to sell them a few billion litres of wine at about a penny a tankerful, wait until they’ve smashed their empty glasses down in a fireplace, toasted the revolution, done a few Cossack dances and fallen over dead drunk and then the Sixth Fleet’s going to leave off bombing and strafing the Middle East, steam into Murmansk and liberate all the poor benighted soviets. There’ll be a MacDonald’s in Red Square before they know what’s happening.)

I suppose the pound means different things to different people. To me it means a pint. To Mark and Mandy and Becky it means a week’s pocket money. To an old age pensioner it means an hour or two of their living room temperature being relatively comfortable. And to an Ethiopian child it means the difference between living and dying. What we have to remember though is that it’s hard in the City. I mean you generally have to undergo the rigours of public school and Oxbridge, probably have to work, oh, up to thirty hours a week and maybe manage to get abroad only six or seven times a year. And then there’s the overheads: clothes for Ascot and Henley and Wimbledon; a couple of shotguns and shooting clothes, a decent set of golf clubs, a horse or two for riding to hounds; a reasonable cellar; a good tailor, perhaps a Roller and an aircraft and that’s not to mention the drug bills or the slush funds.

There are people, some of them Doctors and Professors, some of them journalists and commentators but most of them politicians – you know, power-crazed lunatics with an answer to everything – who attempt to explain this bizarre situation to us in terms which we will understand. They talk about free market forces. (This means buying cheap and selling dear. That’s ok with things like tanks and missiles and napalm but right out of order when it comes to things like drugs. You can get a Knighthood – a “K” as it’s known amongst EPs – or maybe the Queen’ll give you an award for selling fragmentation grenades but you can get fourteen years for selling cannabis.) 

 

They talk about productivity. (This means hijacking technology, throwing people onto the dole or into prison, and maximising profits.) They talk about growth. (This means that the impossibility of the situation is such that the illusion can only be sustained by constant expansion. Ever more diverse and larger numbers of goods must be produced whilst still being kept just beyond the reach of the majority of people who produce them. You know – by the time you can afford a video or a computer it’s out of date.) And they talk about monetarism. (I think that means controlling the other three by dint of limiting or increasing the number of pounds actually in circulation, but I could be wrong.) What these people have in common is that they are all raving mad.

 

Surely it should be clear to them that one nation’s balance of payments surplus is another nation’s balance of payments deficit. And that on a shrinking globe: it’s high time we had global management of resources. And that this entire strong pound nonsense means that the weak will continue to starve. And that the only way there can be a strong American/European economy is for there to be a regiment of mad scientists, funded by mad financiers, dreaming up germs, nerve gasses and particle wave death rays and ……ah, what’s the point?

I think, actually, that I understand all this pound business better than they do. I think that whether the pound is up or down, weak or strong, in or out of the basket and whether Peter and Alastair smile or frown when they tell me the Financial Times Index, you can bet your life that today, like any other day, it’s been a case of one bunch of Mr Greedybastards having a good day and another bunch of Mr Greedybastards having a not-so-good day. That’s what it means. That’ll do nicely.

Afterword:

Mr Ishmael wrote Me and the Pound in 1987.

Twenty-seven years later, he wrote:

I never understood money, mr mongoose, never had enough to share mr jgm2s anxieties, for instance, and since Peter Sissons used to declare the daily value of the pound against a basket of currencies I have been convinced that the whole business is fantastical, awaiting only an Emperor's New Clothes moment for the whole idea to evaporate.

To me it has always been pretend money, well, since paper money, anyway. Gold coin, I can understand that, but central banks, printing paper, borrowing money into existence, nah, can't fool me with that, whaddathey think I am, fucking Irish?

2 December 2014 at 17:41