Rest in Peace

Wherever we are on the political spectrum, I think we can all feel immensely for the loss of David Cameron and his family. I send my condolences and sympathy. RIP Ivan Cameron.

Travesty of the Edinburgh Trams

Building continually delayed, costs soaring, contractors going on strike, road congestion almost unbelievably bad - say hello to the Edinburgh Trams project!

From first-hand experience, I can attest to the scheme's major public inconvenience. For much of last year I worked as a barman in La Tasca in the Omnicentre in Edinburgh, and I would come from my dad's flat in Leith. Normally, you just jump on the 22 or 16 and you do the journey in 10/15 minutes. When the tramworks were in full-swing, you were looking at something closer to 40 minutes at times. That is, 40 minutes to get from the bottom of Leith Walk to the top. Sweating like a sardine in a tin for forty minutes, packed on a 22 bus, the summer sun beating down and making you feel as though you were in a greenhouse, did not leave me smelling particularly fragrant for my tapas-eating and sangria-swilling customers.

May I recommend this excellent post on the newly-discovered A Place to Stand blog (I really do need to get a blogroll in order). In it, he writes:

"Last Friday the contractors on Edinburgh's tram project said they were going on strike for extra money. In the tradition of air traffic controllers they had chosen to announce this strike immediately. Prince's St, Edinburgh's main street, had been closed to traffic to let them work.

The whole project has always been a boondoggle - the local council are putting up £100 million & the Scottish government £500 m to put a single tramline from Leith in the east to the airport in the west. Since it goes through the main streets it will do absolutely nothing to reduce congestion there, its ostensible purpose, simple removing buses but replacing them with trams, whose use & routes are less flexible. But trams are, for ideological reasons (publicly owned & working off electricity made by fossil fuels [& nuclear} while buses use fossil fuel directly) more politically correct.
The sensible options would either have just been to let the free market provide
bus services, which do all the same stuff except costing £600 million & digging up the streets, or an automated overhead monorail system which would cost more, or at least more than the necessary cost of trams, to build but, being automated, far less to run. At least half the cost of buses is the driver. Obviously sensible options were not desired."

Quite so - £600 million as it stands already, with these contractors striking to demand another £80m? What is all this?

The author of the blog, Neil Craig, goes on to link to a letter he got published in The Scotsman, reflecting on the mad amount of public money that has already gone into the trams scheme:

"There has been little discussion of the fantastic level of these costs. Melbourne built the Box Hill extension, 2.2km, opened in 2003, for £12.5 million; and the Vermont South Extension of 3km in 2005 for £13.5m. On that basis the Edinburgh tramway, at 18.5km, should be costing about £105m pounds or indeed quite a lot less because of economies of scale. British public works have a long record of being grossly overpriced. Those in charge refuse to provide any explanation of this and they should."

What is it about public works projects here that they are never completed on time, on budget - indeed, tend to be instead massively delayed and massively overpriced? I pose that not as a rhetorical question, but an open one - can someone please try explaining this to me? The real travesty is that those in charge will not - we've once again been robbed blind of our money.

Well said ...

Brian Monteith, in a well-crafted article for The Scotsman, hands out some pearls of wisdom on the economic crisis and the folly of the proposed solutions, describing politicians as trying to hose us down with kindness, but unintentionally drowning us:

"The most inappropriate people to be bankers are practising politicians, for they are in the market for votes – not the market for nurturing money. If money were water, bankers would ration it through careful control of its supply, using its price to ration it to customers.

Politicians just get the hosepipe out and try to soak as many people as possible, preferably in front of the cameras whilst uttering meaningless words like stability, long-term, boom and bust (the end of). There are lots of policy wonks with ideas for how politicians can shower us with our own money – geeks bearing gifts that we have paid for!

One American example of how politicians make bad bankers explains how we are all in this mess. Back in the Nineties, during the glorious reign of Bill Clinton, the president exerted a great deal of pressure on the government-subsidised mortgage providers Fannie Mae and Freddie Mac to provide easy loans to people who previously had been considered too high a risk. Clinton was in government and he was there to help. So, in 1999, the threshold was dropped and the sub-prime mortgage market expanded exponentially.

To cope with the greater demand, the US housebuilding industry expanded, borrowing more from the banks to finance the expansion.

Needless to say, people that bankers had previously thought too risky to lend to eventually showed why they had been categorised as sub-prime and started to default on their mortgages.

Foreclosures multiplied, the construction boom collapsed and a lot of "bankers" were left with egg on their faces. They had gone against all their own banking disciplines and the bailout of banks followed – organised by the very politicians who had caused the problem. Once again, they were there to help us."

Mr Monteith has neatly illustrated the deficiencies of President Clinton's 1995 Community Reinvestment Act and its ensuing consequences - political action mimicked across the pond here in the UK too. That's not to put the blame for our current predicament entirely on Old Liberal Bill Clinton - this crisis emerged from several different factors. But, to my mind, those who point at our current economic woes as evidence of the crisis of capitalism and the bankruptcy of free market theory are missing something rather crucial: there hasn't been a free market, and most certainly not in the housing and banking industries, which even before the crisis hit were two of the most heavily-intervened-in sectors of the economy in the US. Fannie Mae and Freddie Mac, for example, were quasi-governmental insitutions , changing mortgage-lending standards for political reasons. I didn't hear any of the blowhard Keynesians now dominating the airwaves telling us that something might be amiss in the economy - no, it was free-market libertarians like US Congressman Ron Paul and economist Peter Schiff who predicted this crisis, years ago.

Mr Monteith ably sums up by saying:

"Winston Churchill once observed that "for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle". I believe the same goes for borrowing. You cannot solve a debt-fuelled crisis by borrowing more – but that's what Obama and Brown are trying to do.

Nor can we take solace from Alex Salmond – his solution is to drown us with kindness too. His hose is undoubtedly smaller than Gordon's – but size doesn't matter – and we shall be drowning in Alex Salmond's kindness.

The politicians should be turning their hoses off, letting the addicts dry out and lessening our burden so we can lift ourselves, and each other, up from this recession – from outside that bucket."

He's right, and thus it's doubly depressing that all our mainstream politicians, from First Minister Alex Salmond up to Prime Minister Brown all the way up to President Obama are proposing nothing but more and more expensive and inventive ways to make a bad situation worse than it already is.

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