Fifth Decade

So, they’re going to Nationalise the failed Building Society come Bank, Northern Rock. Bad decision. Should have let it go bust. Why? Because of what Biology teaches us.

Evolution. Survival of the fittest. Those who take risks, or are unable to compete effectively and independently, die out. Those that do not take dangerous risks, those who are stronger survive. So it is with companies as it is with animals, plants, and other life-forms.

In the wild, if you make a mistake, you are punished for it. If stock market listed companies make a mistake they are also punished. So why are banks different?

Northern Rock started out as a Building Society. Its members decided, for a small windfall shareout of the reserves kept by for safety’s sake, to become a listed company, and received large numbers of shares for free. The board shared in the spoils with share option schemes that kept them taking risks in order to maximise profits - but therein lies the rub: there was only an incentive to take risks, there was little incentive to play it safe.

For years they took a risky approach to lending, and had run foul of the Trading Standards Office many times for playing fast and loose with their lending policies and business practices. They liked lending to iffy borrowers because of the higher nominal margins available to them. Everything was done to maximise profits - but that’s something a lot of companies can be accused of. The difference, and the decision to Nationalise Northern Rock by turning it into British Rock only reinforces this view, is that Banks will be bailed out by HM Government. I’d be surprised if the EU were not very cross at this idea though.

When non-banking companies lose enough money, they go bust or are taken over. They are not rescued by the government (except perhaps in France). This keeps executives in those companies in check, they do not take the highest risks, they look after their reserves, they do not gamble the company on the premise that the government will bail them out if everything turns sour.

This is good for those companies, good for the government, and good for the taxpayer.

So why are Banks any different? Well, their supporters (who often want to keep on making millions every year from the high and government underwritten risks they take) say that banks underpin the whole economy, that letting a single bank go will crash the system.

Well, they would say that, wouldn’t they? Anyway, the Northern Rock is not a pure bank along the lines of one of the main Clearing Banks, which are rather more important to the economy.

Northern Rock only underpins a few thousand mortgages and savings accounts. There are dozens of these small banks, and one less will make very little difference. After all, Building Societies have been merging for years without affecting the economy unduly. Many other lenders would gladly have taken over many of the NR’s mortgages, even the savings accounts, so customers would have been mostly unaffected. Except for their free shares which might become worth what they paid for them - nothing. But surely, isn’t that the risk they took when they voted to become shareholders?

Greed. It’s the undoing of so many. Beware of it in your own life: it has sharp teeth. Except if you are a bank, of course.

The trouble with being an oil executive is when you get into politics you can’t lose the habit of digging holes for yourself. Really big ones that get bigger and bigger. Look at the Bush Administration. Stuffed full of oil industry magnates and lackeys.

Naturally, they have always had a big interest in Iraq. But the “Invade for Oil Profits” theory has been well documented over the years. I’m not talking about that right now, but the current trouble that has a vital strategic importance for the whole region, particularly since the Americans are overstretched and under achieving in that quagmire.

Since the invasion the US has had just one natural ally within Iraq itself - the Kurds. And now they are pulling the rug from under the feet of the one stable group in Iraq, their only natural allies within that country. Although the Kurds are Muslim, they are not Arab, and have a different outlook on life to the troublemakers in the south and west. They have their own identity. But they don’t have their own country.

For years part of the Ottoman Empire, after World War I the Kurds were let down badly by the West:

After the collapse of the Ottoman Empire, the Allies agreed and planned to create several countries within its former boundaries. Originally Kurdistan, along with Armenia, was to be one of them, according to the never-ratified Treaty of Sèvres. However, the reconquest of these areas by Kemal Atatürk and other pressing issues caused the Allies to accept the renegotiated Treaty of Lausanne, accepting the border of the modern Republic of Turkey and leaving the Kurds without a self-ruled region. Other Kurdish areas were assigned to the new British and French mandated states of Iraq and Syria under both treaties.

So, what could have been a functioning and indepedent Kurdistan was split up so that the “lines on the map” could save face for the French and the British, but mostly to accommodate the rampant Turks. Just look at the straight lines on the maps of of Syria and Iraq - a sure sign of arbitrarily imposed boundaries if ever there was one.

The manufactured countries of Syria and Iraq, as well as modern Turkey and Iran, were all given a slice of Kurdistan, the land which had never been but nearly was and which continues to exist in the minds of its people. If it wasn’t for the Turks, they would indeed have their own fully sanctioned and legal country right now, and not be labelled as “terrorists” by Condy Rice.

Map of the Kurdish inhabited areas

Such dreams and feelings of injustices seldom go away and are always rather difficult to deal with. The Turks decided to oppress the minorities within their new, expanded borders. You have probably heard about the Turkish genocide against the Armenians in which over a million Armenians died. They weren’t the only ones badly treated as the Pontic Greeks and Kurds suffered too.

You could say that the old military governments of Turkey treated few of its citizens well, as anyone who has seen the shocking but slightly inaccurate Midnight Express, a cult movie from the 1970s, will tell you. But if you were from a minority group who did not accept Turkish hegemony and integration you were treated rather more harshly than the norm. Things have got a lot better since then, though, especially with Turkey’s attempts to join the EU which insisted on many changes to the Turkish judicial system, and many Western leaning economic reforms.

However, in the Kurdish areas of Turkey, people still want their freedom, and haven’t stopped fighting for it ever since. Against the odds.

For a start, the political system is geared against minorities. Although Turkey has a system of non-secular Parliamentary Democracy, no party with less than 10% of votes gets any representation in Parliament. Not only that, but if your party calls for independence from Turkey, that Party is banned from holding any power. So, if you are a member of a minority with fewer votes possible than this, and with views on separatism (such as the Scottish National Party in the UK) your views can always be ignored.

The main Kurdish force is the PKK, whose leader was imprisoned some years ago for a life term. But still the Kurds resisted moves to force them to give up their culture, language and customs. The most violent protestors attack the Turkish Army and Police in their “homeland” as they see it, and since their lands have been cut up they can cross the “UN Approved” borders to escape pursuit from their attackers. They are listed as terrorists by the US, and the EU because of the methods they use.

In a system in which political protest is quashed, sometimes through violent means, how can groups of individuals then express their political desires for autonomy? It’s rather difficult - particularly since Turkey is so geo-politically important to NATO.

Unfortunately, you will always get those who take up arms against those they see as their oppressors, misguided though this may be. I don’t think violence ever solves any of these issues, it may make people feel temporarily as though they have more control, but it’s all illusion. Violence - from both sides - just entrenches positions, hardens people’s resolve, and usually makes things worse. It is certainly one of the best recruiting sergeants for extremists.

When the world got together in 1990 to repel Saddam Hussein when he invaded Kuwait, part of the peace deal was that there would be a “no fly zone” over the South and over the North, and the Kurds naturally took advantage of the lack of aerial harassment to create a “state within a state” in the Kurdish areas of Northern Iraq. Democracy arrived, and flourished. Peace reigned in this area, and even today it is still one of the most peaceable parts of Iraq. This suggests all the Kurds want is to live peacefully alone in their own state within their own culture.

Naturally, they have been big backers of the US ever since the second Gulf War broke out. After the initial post invasion plans (what plans?) went awry, the Kurds continued to strongly support the US. By the way, according to the BBC the main source of info on Iraq that was used by the US Defence department was - err, the Lonely Planet travel guidebook.

But now, with the US talking of leaving the area, the Turks are muscling in on the Kurds again and want to be allowed to also invade Northern Iraq to pursue groups they see as hostile to their aims of achieving a Turkish monocultural state.

This is a tricky one for the US because Turkey, as it is now formed, is a vital strategic partner within NATO. For a long time a vital base for US Middle East air power such as that at Incirlik, the US uses Turkey to launch missions all over the Middle East, and to act as a limit to Soviet Russian southward expansion.

Soviet focussed Condy Rice, always someone to me who knows a lot but usually it seems not about the right thing, seems to see Turkey as more important than the Kurds and their democracy. At least, the Iraqi puppet government of Shi’ite Arab Nouri Maliki is doing what the US wants and has said Iraq ‘will arrest Kurdish rebels’

This is rather ironic, since “there but for the grace of God goes he.” According to Wikipedia, when in exile in Syria from Saddam’s Iraq Maliki headed the Islamic Dawa Party’s Jihad Office, a branch responsible for directing activists and guerrillas fighting Saddam Hussein’s regime from outside Iraq. He who had once been a “terrorist”, is now a hero, while those who were once heroes are being labelled terrorists. But then, labels are so easy to use and misuse, aren’t they, Condy?

Once again, America gives up its allies to political expediency. It was a tough call, but somehow I can’t help feeling that an opportunity has been lost here for some new creative solution to be brought in. Instead, the US has fallen back on strategies designed for a Soviet expansionist world that have been out of date for decades, strategies that have their roots in 19th Century colonial policy.

But hold on a minute. Is there something even darker unfolding here? Perhaps a re-expansion of the old Turkish Empire? The BBC reports that Turkey has “massed up to 100,000 troops on its southern border for a possible offensive to eliminate Kurdish rebel bases in Iraq.” That’s rather a lot of troops to chase just a few cross border rebels, isn’t it?

With US occupation soon to end, the US is getting desperate. Mostly to not appearing to have lost (which they have through no fault other than Rumsfeld’s naivety and lack of strategic vision) but also desperate to prevent the vacuum being filled with any other regional power - such as represented by either the Syrians or the Iranians. Or worse, Islamic fundamentalists. George Bush certainly does not want his legacy to be that of invading a country that did not have Al Qaeda within it to begin with, but which certainly had it when he left. Too late, George.

So, allow the Turks to make cross border raids on “terrorists” in the Kurdish areas; later, allow them to set up “temporary” bases within Kurdish Iraq; replace the US’s 100,000 plus US troops in Iraq with the 100,000 plus Turkish troops and you kill a number of birds with one stone. No vacuum is created, so no unpalatable force is given access.

The Turks can be kept “on-side” allowing the US to keep its airbases operating. The iraqi Shias of Maliki and Co will have their main opposition within the country weakened through Turkish pressure so will gain more power overall. And the US can be seen to be withdrawing from Iraq without creating one unholy mess.

Except there will still be one. If that is the strategy, it’s no more than a band aid solution. And its political consequences will be far longer reaching than George Bush and his Administration is willing, or perhaps able, to think.

The way battles are fought these days, at least from a propaganda point of view, reminds me of that old saying “Give a dog a bad name and you might as well hang him”. The bad word today is “Terrorist”. The good word is “Rebel”. If you ever hear of someone using the “T” word, take it as a warning sign to do your own research: on some level you are probably being taken advantage of, even lied to.

After all, an argument always has two sides. Sometimes, they’re both right.

There was an interesting debate in Parliament about computing last week. Does the UK Government favour Microsoft?

Fanboys come in two flavours: the committed and devoted user with no financial stake to protect, just the defence of their decision to use one solution or another as an expression of their ego or intellectual snobbery; and the hard-working industry professional whose very financial success and future rests on the adoption of the platform he not only supports wherever he can, but also actively peddles to the less technically able industry and government purchasers he is paid well to advise just because that system will over the long term guarantee him the most work.

When it comes to awarding government contracts in IT, one of the perversities is that because of the size of the projects, the government favours IT consultancies that are large in terms of money earned, and employees available. They ask the consultancies to identify the solutions, when the consultancies have a vested interest in presenting a case that favours the solution that benefits them most. To stay big, and therefore remain on the gravy train, they need lots of man hours to be billed out.

The government say they are of course looking for a cost effective solution, but pre-select the most expensive ones by filtering out those consultancies who did not grow big or become rich because the solutions they provided were cheaper, lasted longer without needing attention, and were more reliable over the long term so needed fewer man hours to be invested.

How can firms that get to be big enough to qualify to tender because they tend to bill lots of man hours be asked to identify the most cost-effective solutions? That’s an organisational oxymoron.

The raison d’etre of both firm and technicians within it is to generate man hours. They should never be asked to identify the solution, because they will always favour the expensive one and find a way to make a convincing presentation that supports their choice. A mechanic who only knows how to repair a Morris Marina will not tell his boss to buy a VW: after all, just because you can find lots of garages with lots of mechanics with experience mending Morris Marinas does not mean the Morris Marinas were trouble free. How would the mechanics get so much hands-on experience if Morris Marina’s were totally reliable cars?

What we need here is separation. Separation between solution selector, and solution provider. At the moment, critics are fighting the symptoms, not the causes. Asking for the solutions to be “more cost-effective” just means the reports the big consultancies produce address this issue as part of the many other issues they know the government consider to be important. Only by having the solution identified by someone or somebody with no possible future advantage from favouring one solution over another will this perversity be addressed.

This is what they did not so long ago with the big accountancy firms. Their auditing and consulting arms were joined at the hip, and this gave each an unfair advantage to the detriment of investors. So the firms were told to separate their two halves, which they did. Now we need the big IT consultancies to do the same: they are too much in bed with Microsoft, and so it is no surprise that their solutions suffer from code bloat, setback, cost-overrun and lack of reliability. They do, however, produce lots of man hours.

Surprise, surprise. Who’d have thought that would happen?

But why do the critics suggest the UK government is a Microsoft fanboy? Dr Pugh MP (LibDem) said “The alternative (to Open Source and small company solutions), which applies across many Departments, is the tendency to have memorandums of understanding with big companies, often foreign and usually American. There is a close association between that side of the industry and the Government—an association that is personal, consultative and advisory. The House will be aware that the former Prime Minister launched the Labour business manifesto at Microsoft. Hon. Members will also be aware that, on the International Business Advisory Council formed by the current Prime Minister, there sits the owner and founder of Microsoft.”

You can certainly hear Microsoft’s own sales training manual coming out of the mouths of babes over and over again, such as in this defence of their position by Treasury Minister, Angela Eagle MP: “It is often suggested that open source solutions offer better value because they are cheaper to buy. In fact, the total cost of ownership is considered in procurement, and it is not always the case that the open source solutions are the cheapest.”

Well, it does depend a lot on who does the study. And if they consider hardware and software together or separately. Let’s face it, Windows programs and applications are not exactly intuitive, are they? There are considerable training costs associated with these too, although admittedly a lot of this familiarisation goes on at school. Yes, the good old Education budget subsidises the training cost of future Microsoft related solutions. I bet they don’t add in this cost to the analysis of doing business with Microsoft products, services, or applications - although they do seem to unfairly add in such costs as extras in the TCO calculations for training on the alternative Open Source or Mac solutions.

Angela Eagle goes on “Although they are free of licence charges, because they can involve high levels of support and training costs, they sometimes do not provide the best value for money. External studies have not shown a consistent cost advantage to open source solutions over proprietary solutions. It is often bandied about when such issues are debated that proprietary solutions are necessarily more expensive than open source solutions, but we have yet to prove that. Some of the figures of potential Government savings from the wholesale adoption of open source that are being bandied about are not taking into account the extra support costs over the lifetime of the project.”

Now, where have I heard that line before? In reality, Total Cost of Ownership studies have clearly shown that buying computers that use the Windows platform is the most expensive long-term option, especially when compared to the purchase of Apple Mac computers. Linux based solutions in some situations can be even better, although for commercial use the lack of a single responsible party to talk to does undermine the uptake of the various distributions somewhat.

But then, another perversity pops up. Dr Pugh again: “inside the Palace of Westminster I can no longer use an Apple Mac computer to surf the internet, which the Parliamentary Information and Communications Technology department has said is because of security, although it has never actually explained how.”

Perhaps they really mean that Apple Macs are so secure that the security services cannot snoop on them as easily as they can on the Windows computers that now have to be used. That wasn’t the decision of the government though, nor of Parliament itself, but a small committee called the “Information” Committee. They never did provide the information, just the secret lockout.

Were they nobbled? It wouldn’t be the first time Microsoft have successfully altered the composition of a body judging them - they even got the Judge changed to one more to their liking in their monopoly trial in the US when it was rumoured the Judge who found them guilty of abusing their monopoly favoured splitting Microsoft up into separate Operating System and Applications entities. The new Judge was more lenient. Quelle surprise.

Where the Government and Microsoft are concerned, there are lots of secrets - and lots for the rest of us to be worried about. For instance, the seemingly preferential treatment Microsoft are getting over IT in the NHS. Dr Pugh again: “I would like to believe the Government when they tell me that they have an efficient deal with Microsoft in relation to Connecting to Health, but I am less than happy that the details of the deal are subject to a confidentiality clause.”

Is it confidential because Microsoft do not want to be prosecuted for illegal restraint of Trade, for again abusing their monopoly power, because of pork belly politics, or because the contract was bought so cheaply the EU competition commission would see it as an abuse of monopoly, trade “dumping”, or illegal state subsidy?

We are right to be suspicious. Dr Pugh reminds us that “during the court case against Microsoft, Judge Jackson in the US Department of Justice said—I would not have put it in such a way, as he said things that are quite damning—that Microsoft’s executives had

“proved time and time again to be inaccurate, misleading, evasive, and transparently false…Microsoft is a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect. It is also a company whose senior management is not averse to offering specious testimony to support spurious defenses to claims of its wrongdoing.” “

What chance has Open Source with the British government if they don’t even practice Open Government, particularly with such partners? And how will anyone be able to see if there is any skullduggery involved? The press make a big thing about contracts to Saudi Arabia over arms deals with hidden payoffs from private companies who just happen to be British, but nobody kicks up a stink when UK taxpayer’s money is spent by our own Government without us being able to see exactly how.

There should be no confidentiality clauses on large deals. The bigger the deal, the easier it is to “launder” some money for some pork belly scheme or another, and the more concerned we should be about where our money is going.

I am quite prepared to believe that many politicians really do want a level playing field, but what about the civil service? All those Sir Humphrey Applebys… they don’t like change, they do like monoliths. They tell the politicians what to say. And they like little advisory jobs after retirement.

I bet they love Microsoft. Maybe the fanboys are the real power behind the throne?

“Yes, Prime Minister.”

The ink’s only just dry on the appointment of Nicholas Sarkozy as French Premier, but already he’s showing he isn’t as right wing as expected. Either that, or he’s in the pocket of Big Business. That wouldn’t be the first time for European right wing politicians.

You may have heard that the EU Treaty is being renegotiated this week. Instead of introducing a Constitution which was rejected by French and Dutch referenda when it was put to the people of those countries, it seems the powers that be have decided if they call it a treaty, and drop some name tags here and there they can still get all the changes they wanted without needing citizens to vote for it. Nice to see democracy is flourishing.

Well, Mr Sarkozy has insisted the 50 year old committment to “free and undistorted competition” should be replaced by a “social market economy aiming at full employment“. Mr Sarkozy is only thinking of France here of course, and the habit French governments can’t get out of of subsidising uncompetitive French industries with taxpayers money. But the effects will be far deeper and far wider than Mr Sarkozy’s lack of vision can encompass.

If adopted this will, in one fell swoop, move all of Europe from a Capitalist based system to a Socialist based system. Where private companies exist, they will gravitate towards monopoly status and behaviour. This will favour large American corporations such as Microsoft, whom only the EU courts have really brought to task for running as uncontrolled monopolies.

Meanwhile, the UK Independence Party and the UK Conservative Party continue blathering on about “we must keep UK Sovereignty sacred” when it was given away to the US half a century ago in the Bretton-Woods agreement. If the UK did leave Europe, and Europe adopted more of this ridiculous socialist dogma, Britain plc would have huge problems competing with massive, subsidised European businesses on the one hand, and massive protected American Corporations on the other.

All most of the Tories can say, in their best public school accents, is “I say! We must keep the Qweens Head on our cuwwency!” All our enfeebled and divisive gutter press can say is “Remember the War!” - they’re talking about the 1415 Battle of Agincourt here, of course, they’re so stuck in the past.

Wake up, people! The only way to protect British interests and values is as a part of Europe, and by rejecting the imposition of backdoor socialism by French protectionists.

Update:
The French did an about-turn (as usual) and have withdrawn the changes. It seems the Poles have also given in and done a deal at the last minute. As I write, no details have emerged other than an agreement has been reached. We’ll just have to wait to see what that is, and how it affects us all.