GB News – misunderstandings

GB News, the new UK news network, launched this week.

There has been a lot of comment on social media, most of it based on witheringly negative assessments of the studio, the production values and other aspects of the channel. There is also already a campaign to persuade corporations to pull advertising.

The old era of media outlets being owned by corporations and hands-off old-money owners is over. The new generation of newspaper owners are not in it for higher ideals. They are a mixture of hedge funds, which expect a quick return on investment, or they will revert to slash and burn management, and oligarchs operating via front companies.

Oligarchs expect their media properties to be their personal mouthpieces. Sheldon Adelson, the Las Vegas-based casino mogul, bought his local paper, the Las Vegas Review-Journal, for $140 million in 2015 via News + Media Capital Group LLC, a front company. The newspaper promptly became his personal mouthpiece. Jeff Bezos bought the Washington Post for $250m in 2013, which for one of the richest men in the world, was chump change. There is a pattern here.

In the current world in which we live, with the ease of creating internet-based TV streaming channels, a newly-minted oligarch with $100m a year to burn can easily afford to fund an entire operation the current size of GB News. As I am fond of saying, disinformation networks are a lot cheaper to run than an aircraft carrier with a squadron of F-35s. The real world war is the Information War, and the West is currently losing. Some of the oligarchs and plutocrats operating in the disinformation space are almost certainly acting as fronts for governments.

The funding for GB News should be a big Tell as to its intended positioning. The majority of the funding is from corporations not domiciled in the UK, and a lot of the funding comes from the “front” corporations of oligarchs and plutocrats. This is not a benign news channel, trying to thread the needle down the middle, or engaging in fearless investigate reporting. It was intended as a propaganda channel for pluto-populism. Its presenter roster is dominated by a combination of established UK tabloid blusterers, and newer internet-based provocateurs, long on mouth and short on information.

As for the crappy production values…the cynic in me says that GBNews doesn’t mind having YouTube production values, since it is appealing to people who mostly get their news from YouTube.

GB News is not competing with the BBC, Channel 4, Sky or any of the other established UK news channels. It is a propaganda outlet largely funded by oligarchs, designed to generate dopamine clickbait for nativists and fans of plutocrat-controlled fascism. Comparing it with those channels is tempting and easy, but misses the entire picture in terms of its underlying objectives and market positioning.

The campaign to pull advertising may well succeed. However, like Fox News in the USA, the funding model of GB News is not dependent on advertising. If all they have are gold and crypto-currency snake oil salesmen as advertisers, they won’t care. The purpose of the network is not to be a commercially successful news channel with blue-chip corporate advertisers. This is already obvious from the decision by the network to launch a smear attack on Ikea, one of the corporations that pulled its advertising. Ikea is a European corporation headquartered in an EU country. Attacking a European corporation ticks all the right boxes when your intended audience is nativists, and nationalists.


The EU-UK clash – political culture

The current dispute between the EU and the UK over the practical application of the Northern Ireland Protocol section of the EU Withdrawal Agreement has the potential to ignite or re-ignite sectarian violence in Northern Ireland, and also to cause a major trade and logistics dispute between the UK and the EU.

From a practical perspective, sectarian violence is a lose: lose for everybody, and if there is a trade dispute between the EU and the UK, there will be significant negative impacts in the UK, which is not self-sufficient in most basic supplies for a highly populated post-industrial society. A trade war, if it occurs, will not end well for the UK. it will impact the EU also, but given the disparity in GDP size, and the reality that many trade routes into and out of the UK are via the EU, the effects will be disproportionately felt in the UK.

The history of the relationship between the EU and the UK is one of initial reluctance by the EU (or the EEC as it was then) to let the UK even join in the first place. President De Gaulle famously vetoed the first UK attempt to join in the late 1960s, and in turn, there was significant resistance in the UK when it finally agreed to join in the early 1970s. The resistance to EU membership never went away, it simply went underground in the two major political parties, waiting for an opportunity to re-emerge, which happened in 2015. Both parties were crippled in their approaches to campaigning for the UK to stay in the EU as a result.

The UK’s relationship inside the EU were always contentious. Margaret Thatcher certainly pissed off the EU leaders multiple times during her largely successful attempt to negotiate a better financial deal in the 1980s. However, the Single Market in its current form was a concept that she supported and lobbied for, since at the time that the UK joined the EU, it did not exist in the form in which it exists today. So the UK, while it was an EU member, had very significant strategic influence on the evolution of the EU.

However, the EU has always tended to see the UK as a reluctant member, and strategic UK actions since the 1980s, such as the refusal to join the Euro, and the attempt by David Cameron to head off a negative result in the 2016 referendum by once again re-negotiating the terms of UK membership, have reinforced that feeling. The UK’s sense of imperial exceptionalism has not helped its relationships while in the EU, and the current post-Brexit mess is merely a continuation of a fractious relationship.

BTW, I regard the Euro as a qualified failure; while it certainly added to trading convenience, it deprives a country in the Euro of a valuable economic lever for crisis management, namely the ability to devalue its currency. That caused major problems when Greece lurched into insolvency and could not devalue its debts by devaluing its currency; it no longer had an independent currency to devalue. The UK was right to not join the Euro.

The bigger question is why the relationship has always been fractious.

In my opinion, a major cause of the problem is that the political cultures in the UK and Europe are, in most cases, fundamentally different. Most European countries have electoral systems based on forms of proportional representation. They also have much more fluid political systems, with more than 2 major political parties, and with rapid evolution (and disappearance) of political movements. As a result, government by coalitions is the norm, rather than the exception. The EU reflects that, in that it is an unwieldy coalition of 27 countries, which for major decisions, requires unanimity.

The UK has no significant history of coalition governments. Apart from wartime, when party politics was essentially suspended, the only UK coalition of any length was the recent Conservative-Liberal Democrat coalition, with the LibDems very much as the junior partner.

The two major political parties in the UK have always been publicly hostile to proportional representation, claiming that a “first past the post” system is needed for what they term “strong government”. Cynically, they would say that, since a government with a majority in the House of Commons in the UK can essentially do what it likes. They do not have to take any notice of any other interest group or political party. It is not realistic to expect either of the two major parties to support the change of a system that has given them a comfortable duopoly for centuries.

People who are hostile to PR like to justify that hostility by mocking Belgium, which has had perpetually unstable coalition governments for decades. It once went nearly a year without any government at all. However, Belgium is not a credible example of the problems of PR. It is a manufactured country, formed by merging Wallonia, Flanders and part of North West Germany to act as a buffer state between France and Prussia. The reason for the instability is that the coalitions reflect linguistic community dynamics, and there is lingering distrust between the French and Flemish speaking communities. In an ideal world, Belgium would be unwound, but nation-states tend to be regarded as inviolate. (If the world was pragmatic, Kurdistan would be re-created also. But I digress).

The UK electorate had the chance to change from “first past the post” to a form of PR in 2011, but unfortunately chose to vote No. Since both major political parties were against PR, I was not surprised by the result. However, it has locked the current system in place for the foreseeable future.

The lack of proportional representation and coalition politics in the UK had persistent negative consequences when the UK tried to work within the EU. The decision-making processes in the EU are entirely coalition-based, and significant ones require unanimity. This does not sit well with the governing mindset in the UK of “we’re in charge”. As a result, the UK regarded the EU decision making processes as hopelessly cumbersome and too deferential to smaller countries, while the EU regarded the UK approach as insensitive and dictatorial. It’s two different mindsets of how to govern.

As you might expect from a supra-national grouping founded on consensus, the EU’s political leaders are almost all from countries with a strong tradition of PR, so they are experts at satisfying multiple divergent interest groups and building unanimity for proposals and laws. The UK’s politicians have little to no background in that style of politics, and more seriously, they never really showed any interest in learning how to operate that way. As a result, the relationship was marked by the bureaucrats working well together behind the scenes, with periodic public spats as the UK complained about something or other, and the EU leaders counted to a large number and said under their breath “here we go again”.

The resulting friction was always a part of the EU-UK relationship, and it still continues to this day, with the UK thumping the table after Brexit and demanding concessions from the EU. This is not a style of interaction that would have worked well while the UK was in the EU, and it is even less likely to work now that the UK has left.

The difference in political cultures has implications for any future relationship, up to and including the UK rejoining the EU, which will probably not happen in my lifetime. I consider it unlikely that the UK will even be considered for closer relationships unless there is a profound change in the current UK political culture. Whilst PR is not a requirement for EU membership, the current “winner takes all” mindset of UK politics is not a good match for the EU culture. Until the UK’s political culture becomes a lot more collaborative, I see no real prospect of any significant long-term improvement in EU-UK relations.

Right now, with a deeply authoritarian UK government in place, the two parties are about as far apart as you could imagine. Hence my skepticism that the current arguments over the Northern Ireland protocol will be resolved without further escalations.


Property Market notes – local

The property market in our subdivision is…bonkers.

There is very little property for sale anywhere in the USA right now. I have been looking at Hawaii and California at intervals, and our across-the-street neighbor is a realtor.

She confirmed my suspicions a few weeks ago when we briefly discussed the state of the market. Normally, in a price boom, there is a lot of inventory as lots of people are trying to move up or cash out, but there are also a lot of buyers, so prices are being bid up.

Right now, prices are booming, but there is no inventory to speak of. There are very few properties coming onto the market, but there are willing buyers. So any time even a half-way decent property comes onto the market, there is an unseemly stampede and, quite often, a bidding war. This results in many properties, even sub-standard ones, going for way more than the initial asking price. This has been happening in Hawaii, where even tired condos from the 1960s and 1970s have been selling significantly over the asking price. (Quite why a 367 square foot tower block box should attract such interest is not clear to me, unless speculators are buying, which is very possible).

Here in our subdivision, a very nice 4 bedroom 3000 square foot 1978 house went up for sale 8 days ago, and is now Under Offer. Not sure if it is under offer for more than the asking price, but we saw lots of people visiting it last weekend immediately after it hit the market. The house is well looked after, with an excellent frontage, but no pool, and the interior is dated. (All medium color wall wood, typical of many houses here built in the mid-to-late 1970s).

2 doors down, a property with not much kerb appeal, also appears to have sold, after being on the market and vacant for 3 or more months. We saw evidence of people moving in this weekend.

We have mentally upped the value of our house based on watching local price trends in this area. It may not help if we stay in the USA, because prices are rising everywhere, but if we move to Costa Rica, it might give us the ability to buy a better house there.

UPDATE – The latest feature of the market is apparently that sellers are demanding that prospective buyers waive their right to an inspection in order to even be considered as buyers.

From a safety perspective, this would be unacceptable to us. When we lived in a rented house in 2009, we found out that the property company that owned it had filed Chapter 7 bankruptcy, which meant that the house was up for sale. We actually attended a court hearing in Fort Worth to validate this. When the trustees confirmed that the house was for sale, we ordered up an inspection. When we both returned from work, the inspector was finishing his report on his laptop in the kitchen. He said “you will have a 30 page report in a few minutes, but I can sum up my findings in one word. Run”. The report detailed a long list of issues, which would have cost upwards of $70k to fix before we could even be sure of getting a mortgage. We passed, and found our current home a few months later.

Asking buyers to waive an inspection is understandable from people who want a quick sale. It enforces information asymmetry, with the buyer being less informed than the seller. This is favorable to the seller. Some people will take the gamble. We won’t.


Sunday round-up – 13th June 2021

I left out the “people behaving as assholes” commentaries this weekend. There are far too many to choose from. The failure to take mental health seriously over decades, and the negative impacts of sequestration as part of Covid-19, have left a lot of marginally adjusted and poorly-socialized people with significant temperament and anger management issues. Until societies start taking mental health a lot more seriously, while still making people accountable for their own actions, this problem will continue to build.

  1. The G7 Summit

The annual public strutting of the G7 leaders has completed in Cornwall. As is usual at these kinds of events, disagreements behind closed doors are papered over with bright-fluffy-bunny press releases and fine-sounding statements of…well, some kind of intent to eventually think about getting around to possibly doing something at an unspecified future date about an urgent issue. Like Global Warming. Nothing significant, you understand.

However, the interaction dynamics between the participants can be seen via images and videos. Which is more interesting for observers when much of what is actually being said between the leaders is not visible, and is heavily filtered for public consumption.

The good news for the UK was that Boris Johnson scored a meeting prior to the start of the summit with President Biden. As normal, both men attempted to play down private disagreements, and portray a position of agreement on key issues. However there is a big difference between a statement like “we agree on the need to solve the Northern Ireland problem” (which is the equivalent of saying “we both agreed that water is wet”) and actually agreeing on how it should be solved. Everything that has emerged from the G7 shows that Biden told Johnson that he needs to solve the problem without pissing off the EU or the United States. When one government sends another government a formal diplomatic warning, that indicates a clear disagreement on something fundamental.

Right now, the UK government’s entire public strategy appears to revolve around bellicose statements challenging the need to even obey the new deals signed with the EU. Johnson and other government leaders, including the juvenile and scientifically illiterate leader of the DUP, Edwin Poots, seem to be trapped in a rhetoric hole of their own making. This bellicose table-thumping threatening made for some uncomfortable meetings, and torpedoed the original idea of the summit being a launch-pad for a New Global Britain (whatever that cute-sounding marketing phrase might mean).

2. The Addiction model of misinformation

Nick Carmody explains why the entire “Trump won” and QAnon cult follower groupings are probably an addictive behavior based on a combination of fear induction, and dopamine highs caused by further feeding of misinformation to confirm existing biases.

Because it is fundamentally an addiction, treating interactions as an opportunity for discussion and debate is almost certainly a waste of everybody’s time. The smartest people in the room may be the ones that walked away from interaction with friends and family members when they realized this.

3. Covid-19 

I am concerned that there will be a further wave of Covid-19 infection, which will proportionately impact the Southern states, due to the low overall levels of Covid-19 vaccination in many of those states. There is a clear correlation right now between political ideology and willingness to be vaccinated. States that have a majority of Democrat-voting progressive voters have significantly higher vaccination rates than states dominated by Republicans. 

The new variant of Covid, B.1.617,  is being referred to as the India variant.  I don’t think that name is racist, it simply reflects where the first contagion was identified, unlike the persistent GOP and anti-vaccine activist messaging of Covi19 as the “China virus”. When you read the comments of people using that name, it is almost always accompanied by allegations that Covid was manufactured and released by China. As far as I can tell, nobody is alleging that India or anybody connected to India released B.1.617.

B.1.617 is clearly more transmissible than prior variants, so if there are insufficient vaccinated people in a community, and/or there are insufficient precautions being taken by people to minimize the chance of infection, that new variant may soon dominate new cases and contagion, and a new wave may happen and force the return of rules that nobody really wants, like travel restrictions and indoor gatherings and entertainment venue restrictions.

4. Goodbye to Texas (soon) – a 2 year plan

After the mendacious and contemptuously undemocratic attempt by the GOP in Texas to ram through a blatantly unconstitutional and fascistic voting management bill, I have determined that we need to leave Texas sooner rather than later.

I am setting a 2 year target for us to be living somewhere else. The “somewhere else” is not yet determined. It could be California, where Mary’s family is from, or Costa Rica, or Hawaii.

Europe is out of the picture, because the UK leaving the EU left us with no ability to live in Europe in any EU country in retirement without paying penal healthcare costs. I am certainly not going to return to the UK, after numerous recent demonstrations that England is now dominated by nativism, xenophobia and a wish to return to the Days Of Empire. The UK failed Civics 101 starting 11 years ago when they failed to vote for proportional representation. They failed it 3 more times, once when they voted Leave, and twice in General Elections. I cannot trust, in aggregate, the electorate in England. In aggregate, they are making bad decisions and enabling politicians who have no respect for the democratic process.

My family in the UK will have to get used to us, in all probability, living further away than before. But since, as far as I can tell, they probably voted for Brexit, they actually have to own the outcome, and this is part of the outcome. We wanted to move to the Azores, but that is not going to happen.



Working from Home – The New Normal

To paraphrase a famous UK singer, I want to tell you a story.

While I was working for Sabre and then EDS, the corporation adopted an approach to remote working by employees where, if you lived 40 or more miles from your defined work location, and you could obtain leader approval, you were allowed to work from home for 4 days a week, only having to be in the office for meetings one day a week.

This was not a full Work From Home employment agreement. However, a small number of employees did have Work From Home agreements, and in that scenario, the corporation also provided and paid for home computing infrastructure, including internet connectivity, monitors and printers. In practice, a number of employees who lived less than 40 miles from the office location also began to mostly work from home, on a “nod and wink” basis with their leaders. After a while, at least 5 people in my group were working from home, but only 2 people in the group really qualified under the 40 mile rule.

There was a period, in the 2006-2007 time period, where, for reasons that were none too clear, the new EDS leadership decided to enforce the 40 mile rule strictly. As a result, all but 2 of the group members who had been working from home were told they had to be working from their office locations 5 days a week once more. This was not a popular edict. At least 1 person in the group, one of the business analysts, left the company for another job.

After I ceased to support a local client (American Airlines) in 2007, I moved to the America Testing organization, and went on the road for a while. I was re-classified as a Remote worker, meaning that when I was not on the road, I worked from home. Most of the time I was on the road, so working from home was a pleasant, albeit temporary, respite. (contrary to what many people believed, my life as a consultant did not comprise an endless series of stays in luxury hotels, surrounded by Captains Of Industry and voluptuous pouting women. It was a whole lot less glamorous than that).

In practical terms, I have been a Work From Home person since 2008, except when consulting assignments required me to be on the road at client locations.

By the early 2010s, a significant percentage of EDS employees were working from home full-time. Part of the reason was that EDS had closed a number of city offices because there were too few people in the city to justify the retention of a physical office. They simply gave their employees in those cities money to purchase home computing infrastructure, and those employees moved to working from home.

During the transition from EDS to HPE, we suddenly were told that we had to be working from an EDS location. As a result, I started going to the Plano HQ for 2-3 days a week when I was not on the road (which was not often). The reason for this, it was explained to me, was that the selling price of EDS when sold to HP depended to some extent on real estate occupancy, so the order had some down to pamper presentation and maximize the sale price of EDS.

After the transition to HPE, there was another relaxation of the work at home rules.

Then one day, there was a sudden change in the HPE era, with Meg Whitman now the CEO. Suddenly, an edict went out that people needed to be working from an HPE office location. Consultants such as me were exempted, but many employees were told that they had 2 options:  work from an HPE office, or be laid off.

For employees who had moved to home working because there was no longer an HPE office in their city, the choice was stark; move house or leave the company. Unsurprisingly, many employees chose to leave rather than uproot themselves and their families. Or they refused to move, and were WFR’d. The choice tended to depend on which action was the most financially compelling.

Employees living in cities with an HPE office reverted to working at that office, although some of them rapidly learned that in order to be in good standing with leadership, all they had to do was “clock in” by entering the building 4 times a week. So I soon heard of legacy EDS employees who would go to the former EDS Plano HQ, clock into the building, say hello to a few people, and then go home and work at home for the remainder of the day.

Then the rumor spread that the building measurement processes were counting not only whether you were in the building, but for how long. So, for a while, I would go to Plano 2-3 days a week and work there every day, when I was not on the road. I was on the road about 50% of the time. This was not a good use of time, since it is a 1.2 hour drive from my home to the Plano office. I used the time to catch up on conversations with colleagues to take the pulse of the Testing delivery organization. But it was up to 2.5 hours that could have been spent on better use of my time on the planet.

When the legacy HPE business was merged with CSC and we became DXC, the rules on remote working were slowly relaxed again. What I realized was that every time there was a takeover or merger, leadership would insist on employees being in an office, to keep real estate occupancy rates high and help to justify that the buildings or building leases were assets, not liabilities. I was officially assigned to a new DXC office in Dallas, but I have never been there.

More recently, of course, Covid changed everything for a lot of people.  Right now, I work from home, and I expect to work from home for the rest of calendar 2021. My wife is in the same situation, having begun to work from home in April of 2020, once it became clear that Covid was taking root in Texas. Her employer has already postponed a return to office work twice. Currently they have no timetable.

There has been a lot of discussion recently in the media about how employers will try to treat employees in the future if and when the Covid-19 pandemic recedes. There is speculation that many employers will try to force employees back to office locations. This makes no economic sense for either the employer or the employee:

  • The employer has to provide office space and amenities for the employee
  • The employee has to give up time, and money to travel to and from the office location

There may be other cost considerations for parents such as child care (I can tell from what I hear on conference calls that a lot of parents of young children are using working at home as the chance to perform their own small child care).

So, if you are an employer, and you suddenly demand that your employees take a pay cut, and give up possibly 2 hours of their day to commute? Somehow I don’t think that will ever lead to a positive aggregate result.

My prediction is that the climate for employees who either want to force home-workers back to an office, or recruit people on the basis that they will mostly or entirely work from an office, is not going to be favorable. This survey tells you a lot about employee attitudes at the present time.  An employer who gives an employee a $30k raise to work from an office (when they are incurring the cost of the office space) is, bluntly, bonkers. 

This transition period will take time. Some corporations are locked into building leases that they may not be able to get out of in the short term. But the New Normal for many employees that do not have to interact with other employees face to face, or interact with the public, is not going to be the same as the Normal that existed prior to 2020.


Dear Texas – the S word

Dear Texas,

To use the old British joke, I see that some of the peasants are revolting…a proposal for the option of secession from the Union to be put into a referendum was just shelved in Austin. 

This is merely the latest in a series of periodic outbreaks of enthusiasm for secession of the Lone Star State. Back in the early 2000s, when UseNet was still a thing, I remember becoming involved in discussions and debates with several Texas secessionists on libertarian discussion groups. They were blithely confident that the Great State of Texas would thrive when not under the yoke of the Evil Feds.

One of the myths that many of the would-be secessionists kept talking about was that Texas somehow, magically, unlike the other states, has some magical right to secede. Something something Articles of Accession something something. This is not correct, so a little history analysis is in order.

When Texas agreed to join the Union in 1845, it was partly as a defensive measure, since Texas had split from Mexico in 1836, and the protection of the United States looked like an attractive option as a way of protecting the state from further provocations and incursions. There was a lot of debate over the terms of accession, the US Congress initially voted against it, and it took quite a while for enough Texans to vote in favour. The annexation by the USA was also accompanied by the creation of a new Constitution of Texas.

This was the text of the annexation treaty. There was no provision included in the annexation treaty for Texas to leave the Union at any point. And following that contretemps a while back, where a number of states tried to leave the Union, only to be subdued by military means, Texas has been a solid member of the United States ever since. So, if you want to secede, you will not only have to convince yourselves, you will need to enter new and uncharted territory and negotiate your departure from the Union. I kept telling some of you “there is no process” back in 2000 or so, you weren’t listening then. No, you can’t do it just by sending an email to Washington DC saying “We’re leaving thanxbai”.

Now…I understand that many of your good folks in Texas are also convinced that your state has the right to split into up to 5 states. I believe that Republican folks rather like this idea, since SHAZAM! Instantly the Senate acquires 8 more Senators, most of whom would, by an amazing piece of happenstance, turn out to be Republicans…The idea is, of course, totally at odds with any idea about secession. But I digress.

The reality is that it is not quite as simple as that. This article should make that clear. For starters, Congress would have to agree to that expansion. It is also far from clear that the right is explicitly codified in any legislation. Even if such a process exists, it would be something new and unique in US governance. Me being a poor gambler, I wouldn’t bet any of the family moolah on it being a viable and legal course of action.

So, making large assumptions, like (1) Texas really does want to leave, (2) The United States is OK with the idea of this, what about those pesky details?

There are a lot of them. It’s not like an uncontested divorce where both of you split shit down the middle and go your separate ways. No sir. Texas and the Federal Government are kind of welded together, so a lot of stuff has to be, how do you say this, unwound.

First, money. The United States national debt is heading towards $24 trillion at present. The Party Of Fiscal Responsibility spent 4 years, under the tutelage of Donald Trump, cutting taxes, which has increased that number by a significant number of trillions. I never want to hear any lectures again on balancing the books from the GOP. But I digress.

Texas would have to be prepared to assume a pro rata share of the national debt. The most obvious approach is to do it based on population. If we do that math <whirrs calculator>, and we add in the state’s own debt, that means that Texas leaves home with a debt of…$2.087 trillion. A f**k of a lot of debt. However, when divided by the GDP of Texas, which is rather impressive, the Debt to GDP ratio is 113%. This is actually not bad compared to many other countries.

Of course, you don’t necessarily need to use the number of citizens as a measure for how to apportion the debt. You could use land area. That would be better for Texas, because Alaska has the most land area of any state. If you use land area, the number would be $1.721 trillion. Alaska would object, of course.

You could use…ooh, how about head of cattle? But oh dear, this is not a good idea. If you do that, the share is now $2.889 trillion. Texas has the most cattle of any state at present. (At this point, I am sure that the devious secessionists would be working out how to have a massive cattle cull prior to the point at which secession metrics are measured…)

The actual debt is actually less important than the little matter of interest servicing for the debt. You will need to get a really good deal from somebody, in order to avoid the fate of some countries in the past, where interest payments kept adding to their national debt, leading to perpetual insolvency. You will need to find the best deal, so you will need to negotiate with your future lenders (which in the case of the National Debt, will be the US Federal Reserve). The United States will want a deal that is best for it as a country, so you can expect that your debt servicing will be larger in the New Independent World.

The good news is that unlike some of your neighboring states (like New Mexico and Mississippi) you are not dependent on the Federal Government for revenues and money. So you should have no trouble paying your way in the Real World. However, there is one small item that you will probably need to address. You have no State income tax, and the only countries that I am aware of that survive without a personal income tax are a small number of high-dollar tax havens with names like Monaco. So you will probably have a large pill to swallow in that area of fiscal governance. Yes, I hear phrases like “over my dead body” whenever a state income tax is mentioned, but if you (to use an old analogy) want to leave home and buy your own house and live in it you have to have enough cash flow to maintain that house. After the complete disaster this Winter, when Texas showed that it leads the world in electricity generation SNAFUs, I would respectfully suggest that some investment in public infrastructure needs to be at or top of the list of priorities for an independent Texas.

Now…military stuff. Texas has military bases all over the place. They exist in Texas because of the wide open spaces, which provide unparalleled opportunities for military units to Shoot Shit Up and Blow Shit Up without, you know, upsetting the neighbors too much. However, those bases also make major contributions to local economies. You can tell that, by the unseemly lobbying scrum that results in DC whenever, say, the US Navy tries to decide where to base a new leviathan of the sea such as a nuclear-powered aircraft carrier. Some of the elected representatives doing the lobbying would sell family members without a second thought if they could have the new USS Dwayne D Leviathan parked in their district.

You can decide to charge the US military more rent for these bases if you like. Your call. However, the US military has plenty of other states eager to accept those bases. There are other states with their own surplus of Wide Open Space, states with names including Dakota, Idaho, Nevada and such like. So you probably shouldn’t try to drive too hard a bargain. A base the size of Fort Hood would leave a major hole in the regional economy if it closed, if you get my drift.

Land borders? Your call if you want to introduce proper land borders. I wouldn’t recommend it. Have you noticed how long those borders really are? How much do you think it would cost to secure that border? I always hear a lot of you Texans whining about “open borders”, and you’re only talking about the border with Mexico. It would be amusing to see you actually having to set up and manage your own non-open border covering Mexico, New Mexico, Oklahoma, Arkansas, Louisiana…a lot of miles.

You probably want to negotiate a Free Trade deal and a Freedom of Movement deal with the United States. As for diplomatic representation…your call. However, if you really want to open Texas diplomatic posts worldwide you will need to build new embassies, our own embassies are already full of spi…er, I mean diplomats. And…Texas would not enjoy the benefits of the current US United Nations membership, like the right of veto over a lot of decisions, and the permanent membership of the Security Council.

Air road and rail travel? Texas will have to pay for continued FAA coverage and inclusion in the Federal highway system at normal commercial rates. We do not recommend that you start a toll war. A blockade of borders will hurt Texas far more than the United States. No, you may not charge for the use of Texas airspace, even if you set up your own ATC operation. Airlines will simply divert around Texas, and you will suddenly find Lone Star Air (or whatever you call your shiny new flag carrier) having certain…routing difficulties elsewhere.

The USA will also require you to adhere to its anti-pollution laws. The good neighbors to the North and East do not want to have to clean up after oil refinery blow-ups. Texas is not exactly a low-pollution state. You have been pretty damn lax for decades in environmental enforcement. You’re not going to get to continue like that, even in the New World.

I would recommend that you actually, you know, formulate a detailed business plan for what happens during and after secession. I know that sort of interferes with the normal political approach of making expansive, emotionally appealing promises mostly based on total bullshit, but you will have one chance to get this right, and if you screw up, Texas will become a miserable sinkhole. Think Brexit.

Over to you, my Lone Star friends.








St. Croix and the refinery disaster

In 2012, the US Virgin Islands suffered a major negative impact to the economy of St. Croix when the island’s oil refinery closed. The refinery was owned by Hovensa, and had first begun producing oil products in 1966. It was a joint venture between Hess Petroleum and Petroleos de Venezuela. For most of its life, the refinery processed sour crude from Venezuela. it was one of the largest refineries in the world, capable of processing up to 500,000 barrels of crude oil a day when operating at peak capacity.

The refinery’s closure was for the same reason that several other refineries in the USA have closed in the last 10 years – its equipment was worn out and obsolete, and the purity requirements for newer fuels such as low-sulphur diesel would require additional equipment to be installed. In addition, the refinery used oil to run its equipment, whereas modern refineries use natural gas or have been converted to use natural gas, which is cheaper than crude oil as an energy source. Margins in refining are very low (1-2%) so if your costs are 3% higher than a competitor, you lose money, and because of the size of the refinery, the monthly losses were in the hundreds of millions of dollars.

After closure, the site was mothballed except for the storage facility. The closure put thousands of people out of work on the island. So the US Virgin Islands government began exploring ways in which they could get the refinery to re-open. At the time that the refinery closed, it was estimated that $2bn of upgrades and rework would be required to make the refinery competitive.

In 2015, the US Virgin Islands government sued Hovensa, claiming that the closure was illegal. How they could expect to force a business entity that had made an economically obvious decision to close a loss-making plant was not exactly clear. The owners responded by filing Chapter 11 bankruptcy. After the usual legal manouvering, the government settled with Hovensa, and the refinery was sold for $800m to a venture capital consortium. 

Now named LImetree Bay, the new owners had to work hard and spend a lot of money to re-activate an old (and in many ways, obsolete) facility that had not been operational for 8 years. They spent $2.7bn on updates, repairs and upgrades, with a focus on creating low-sulfur maritime fuels, and Limetree Bay Refinery re-started operations in 2020.

Almost immediately there were problems. And the problems have been continuing, to the point that the EPA is considering cancelling the plant’s operating approval. Limetree Bay was an environmental problem in its previous life, and the new version of the facility seems to be no better.

The underlying challenge is a real one. Island archipelagoes lack good sources of employment for residents. Tourism only provides so many jobs. There are little to no employment sources for regular blue-collar men. The refinery generates a lot of cash into the local economy when operational, so the government had a powerful political and societal incentive to get it re-activated. However, the age of the refinery’s base equipment was always going to result in problems. Ideally they would have bulldozed the facility and started over, but that would have been cost-prohibitive. 

In the meantime, the US Virgin Islands is stuck with a leaky bucket economy job generation engine, which sooner or later will generate yet another environmental mini-disaster.



“Well I don’t know about that”

I read this and hear this excuse from time to time. It usually happens when I draw people’s attention to Bad Stuff that is going on around them, sometimes right under their nose.

The frustrating aspect of the response is that it is often the response they give when you point out to them that their opinion and/or understanding of the issues or events is, to put it mildly, deficient. Since I normally move to argument supported by facts, it probably occurs to them that I might actually (at the very least) know more than they do about the topic. (Whether I know enough or have the right knowledge is a whole different question).

The tart response that I want to use, but (to be truthful I seldom do use) is “well then it’s about time you woke up and started paying attention”.

The reason I seldom use the response is that it is, most of the time, not likely to yield a positive outcome. Nobody likes being told that they have not been paying attention. Especially if they haven’t.

So I usually count to a large number and move on. But the sentiment remains. If you want to have serious opinions that you can support and hold a discussion on, it might be a good idea to, you know, do some work in advance.


Brexit and the myth of “we knew what we were voting for”

I still keep wading through the statement “we knew what we were voting for” which is being used by all sides in the post-Brexit upheaval.

Reality Check. NOBODY who voted Leave knew what they were voting for. All the ballot paper asked was whether the UK should remain in the UK, or leave.

Anybody who claims “I knew what I was voting for” is engaging in one or more of the following:

  • Lying
  • Bullshitting
  • Imagining their own version of Brexit

The most charitable interpretation is that people voting Leave had an imagined outcome that they were certain would occur, or they thought they properly understood and agreed with one or more of the many promises made by Leave leaders, mostly to the effect of “this will be easy”.

I am prepared to bet money that almost nobody imagined the current outcome. The hardline Brexiters certainly did not, since all they did after the referendum was to rant and rave about “trading on WTO terms”, and demand that the UK tell the EU to get lost on every topic and “go it alone”. Remain supporters initially hoped that the UK decision would be ignored by Parliament, and when that did not happen, they hoped for a “soft” Brexit, which would retain key parts of the existing relationship such as freedom of movement.

Both sides were wrong, for all sorts of very good reasons. But the final outcome, shaped by 3 years of dithering, confusion and incompetence by the British governments, and distorted at every twist and turn by people many of whose understanding of the EU, global trade and reality wouldn’t fit on the back of a postage stamp, is going to irrevocably impact the economy and democracy of the UK, in a bad way, for generations.

My default response to anybody who claims in any seriousness “I knew what I was voting for” is: Bullshit. You had no real idea, except that perhaps you had something in your imagination, or something that you read or saw or heard about from supporters or leaders of Leave, and if you want me to take anything else you say seriously, you may as well admit that, so we can actually have a useful conversation. Absent that admission, you’re an unserious warbler, and this conversation is over.


UK Tabloids – deceit and dishonesty

There is an old saying from the UK, coined for the tabloid newspapers. It goes:  one should never let the facts get in the way of a good story.

The UK tabloids prove the correctness of that saying, day in day out. They do it by a combination of one or both of the following:

  1. Making Shit Up – inventing stories in whole or in part, or exaggerating events until they bear no resemblance to what actually happened
  2. Distorting events to fit them into an overarching narrative or worldview

(1) is the go-to tactic for tittle-tattle and titillation articles, especially about celebrities, the Royal Family and other public figures. Sex, drugs, money or rock’n’roll is usually in there somewhere.

(2) is the most common tactic when reporting on politics or governance.

At the present time, the tabloid newspapers are uniformly pro-Brexit. They were cheerleaders for Brexit from day 1. It fits their long-standing “we represent the Real People” positioning.

The problem is that Brexit, so far, has little in the way of good outcomes, and plenty of bad outcomes. Many of those bad outcomes are a direct result of the British government making poor decisions, and then trying to blame other parties for the outcome of those bad decisions.

Currently, the British government is having to try to dig itself out of a very large mess over the reality that the UK is now, as far as the EU is concerned, a third country. Meaning, the UK left the club and gave up the membership benefits. The UK now has to negotiate with the EU as a third country, and also has to negotiate with other countries without any support or backing from the EU.

One country the UK is having to try to negotiate with is Norway, over fishing rights. Norway is not in the EU, and because the UK is not in the EU, it now has no trading bloc on its side. This means that the negotiation is suddenly one of equals. There is no pressure on Norway to agree to any deal that it finds to be unacceptable. In other words, the UK has no real leverage in the negotiations. It has to take what it can get, not what it thinks it is entitled to. Unfortunately, as the article itself makes clear, the UK entered the talks with the idea that the previous arrangement with Norway when it was a member of the EU was unfair to the UK, therefore any new deal has to be more in the UK’s favor. That does not really work when you are asking for access to another country’s waters.

The UK and Norway just failed to agree on a whole host of issues related to fishing rights.

The Daily Express, one of the oldest UK tabloids, chose to report these events like this:

This is a classic example of lede distortion. The lede begins “Norway shuts out UK”. That is an accusation, which is not supported by the content of the next paragraph or the rest of the article. The paragraph states that the negotiations failed. Both parties failed to agree. If the UK knew going in that a failure would result in Norway no longer issuing fishing licenses, then that was predictable, and not exactly the fault of Norway.

There is no information in paragraph 1 on whether existing fishing licenses continue either. If they continue, and Norway stops issuing new ones, then it is not a “shut out” anyway, and the lede becomes deceitful, not merely deceptive.

This example is common practice in tabloid-land, where the entire business model is based on either enticing readers with juicy (read: salacious) details about something, or riling up readers by reporting something that inflames their emotions.

In this case, it was the latter approach. The lede is designed to point the blame on Norway, via the line “Norway shuts out UK” (boo! hiss! Big Bad Norway!) . The first paragraph does not align with the lede, but that is almost certainly deliberate. “negotiations fail” is a non-judgmental line. “Norway shuts out UK” is judgmental, and blames somebody other than the UK, which is the narrative that you need to continue with if you believe that Brexit was a good and just action. The Express began 2021 with other triumphalist headlines over fishing rights such as “We’re in charge now!”, a narrative that the UK was now going to be in control of all of its fishing rights.

Clearly, having a next door country say “sorry, but you have no rights to continue to fish in our fishing waters, we do not have to grant you any unless we negotiate it, and we don’t like the deal you are offering” conflicts with the “we have control” narrative.

The logical fallacy or myth, which is operative here, is that the UK controls all of whatever the Express thinks is “our waters” and “our fish”. It’s total bullshit, not just because of the reality that the UK has left the EU, but also because of the rules of UNCLOS, which the UK is automatically obliged to follow as a member of the United Nations. Under UNCLOS, the UK is legally obligated to engage in joint stewardship of fishing waters. This, by the way, is why the UK had to do a deal on fishing with the EU. Failure to do so would have opened the UK up to censure and possible sanctions underwritten by the United Nations.

The Daily Express is simply writing bullshit ledes to paper over the reality that the UK does not have “control” over its fishing waters. The sovereignty myth is, as will become increasingly obvious, colliding with modern global reality. Reality will win. In the meantime, we can expect to see more articles like this every day where the lede either does not match the article content, or where the article content is a distortion or a collection of bullshit.




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