Mock-up final NOTW front page by Adam Westbrook

With yesterday’s announcement that the News of the World is going to be printed for the last time this coming Sunday, now I’m outraged.

There’s a disgusting irony in that the closure of the paper – with the loss of 200 direct jobs – has been prompted by the sustained campaigning of the political left; the people who have a political mission to save jobs have caused a whole bunch of jobs to be lost. Not just any jobs, though – innocent jobs. Remember, the phone hacking scandal took place 5-10 years ago – none of the people who are losing their jobs this weekend were responsible for what took place back then, indeed, of the people losing their jobs this weekend only about five of them (according to the News of the World’s outgoing political editor) were even working for the paper at the time of the scandal. 200 innocent jobs are being scapegoated in order for The People of Twitter to feel like they’ve secured an historic victory, sticking it to The Man.

Yes, 200 innocent jobs – one thing I missed out of my post on Tuesday was my increasing cynicism about being told to be outraged by Twitter; more often than not (and I’ve been guilty myself), when Twitter tells me to be outraged about something on the Monday, information which comes out by the Wednesday reveals that there are other important aspects of the story which put a different slant on the outrage. So whilst this Tuesday, Twitter was effectively calling for the News of the World to be shut down, once it secured its victory we learn that different slant. Whilst the chief executive of News International, Rebekah Brooks, the editor of the News of the World at the time the criminal activity started who must surely have not only been aware of what was going on, but must have signed off on it, escapes (so far, at the time of writing) completely free.

The 200 jobs which are being lost on Sunday were not responsible for the phone hacking scandal – those 200 jobs were the people responsible for uncovering Sarah Ferguson’s flogging time with her ex husband Prince Andrew to people hoping to gain business advantages as a result of such meetings; they were the people who proved corruption within FIFA and who uncovered the corruption within Pakistani cricket.

As an educated middle class left-leaning person, I’ve never been a fan of the News of the World’s editorial style or stance, but one less newspaper for sale on Sunday is hardly of benefit to our society. Much as my hyperlocal blogging friends like to see themselves as plugging the gap left by the gradual withdrawal of the mainstream media from local journalism, a few possible high-profile examples aside, keen amateurs simply don’t have the skills or resources to undertake the kind of sustained investigative journalism needed to keep those in power accountable to those who aren’t – and to those who are calling for more statutory regulation of the media, do you really think a State-regulated press is healthy for democracy?

There’s also the question of the wider effects of the News of the World’s closure – although a mere 200 people were directly employed by the paper (some of whom may get the opportunity to apply for other jobs within News International), the paper has been reported as being the most widely read newspaper in the English language; as well as the direct employees, there are also the indirect employees – the paper suppliers, the distributors, the newsagents and other shops – who will lose a significant portion of their livelihood overnight.

So, do we feel proud of ourselves?

Venn diagram by Mr Wowser

What’s that, you say? That since I don’t normally buy the News of the World (or subscribe to any other Murdoch media products), and my rubbish isn’t taken away by the council anyway, that me proudly declaring my boycott of them is a completely empty gesture?

Well, quite. And ultimately, that is why boycotts fail, and why calling for boycotts is usually an empty gesture – because the people who call for them are far more often than they aren’t not actually customers of the Bad Company(tm) in question in the first place, and if they’re customers of another company in the group rarely do they extend that boycott to their own purchasing when to do so will cause themselves more than the slightest inconvenience. I suspect many of the people calling for a NOTW boycott – who are also extending their outrage to the whole of News Corporation and calling for Rupert Murdoch’s intended purchase of the remainder of BSkyB that he doesn’t already own to be blocked – are also Sky subscribers. For their outrage to be genuine rather than empty, they’ll also be cancelling their Sky subscriptions and suffering a bit of personal inconvenience – that’s what a boycott is about, not about telling other people not to do what you don’t already do anyway.

Similarly, those who call for a boycott of companies involved in the disputed territories of Israel/Palestine actually have it quite easy – there’s bugger all that they might want to buy in a shop which is actually produced there, so ultimately the boycott of standard retail goods boils down to looking at the label to see where one’s avocado comes from. And not buying SodaStream any more, for anybody still living in the 1970s. If one really wants to take a stand, if you live in a municipality which uses Veolia for rubbish processing you’ll opt out of the council’s rubbish collection and take personal responsibility for disposing it elsewhere (and probably not to the council tip, because that itself is probably operated by Veolia as well). I will however allow them to continue to have their sewage taken away by t’Corporation (even though a lot of the specialist valves used are manufactured in settlements in the disputed Golan heights) – emptying my own toilet myself on a twice weekly basis is one of the few aspects of my own lifestyle I wouldn’t wish on others.

As an aside to the boycotts issue, I must confess to be now suffering from Twitter Outrage Fatigue Syndrome; I’m sure back in the olden days of Usenet outrage was there (especially in the darkest corners of the talk.* hierarchy), but it seems practically a day doesn’t go by without half of Twitter telling me to be outraged about the latest outrageous thing. Frankly, I think the phone hacking scandal is a bad thing, but I don’t think it’s an outrageous thing. The arms trade, the ongoing banking crisis, and our government’s continued eagerness to spend money on wars which should be spent on the NHS, they’re worthy of outrage. I’m even inclined to be more outraged that two Birmingham MPs are campaigning to relax the ban on smoking in pubs. Dodgy practice by a handful of journalists 5-10 years ago is not remotely on that scale.

“Gordon Brown is said to be ‘very concerned’ about allegations ex minister Elliot Morley claimed £16,000 expenses on a loan he had already paid. Mr Morley has said it was a ‘mistake’ and has paid the money back – but his future as a Labour MP may be in doubt”.

For me, the fact that Jacqui Smith made a simple, and almost certainly genuine, accounting error of bundling a few pay-per-view films into her expenses claim isn’t the story.

The speculation – for it is still disputed whether the films genuinely were porno flix or just films which happened to be certificate 18 – about what kind of films a couple of them were isn’t even the story.

For me, what the story is is the fact that Smith actually thought to claim for the cost of her virgin media telly and internet package as a parliamentary expense at all.

I mean, yes, it’s reasonable for a working politician to be claiming legitimate expenses incurred in the course of doing the job which she wouldn’t otherwise have incurred – such as phone calls, mileage, and even rent (but as far as I’m concerned, absolutely not mortgage) on a second home. And I don’t even object to the notion of MPs and Ministers being paid a decent salary for what is – no matter how what one thinks of politicians – after all an intense job, with long hours, little thanks, and a great deal of responsibility for getting it wrong.

But claiming for your internet connexion? And your cable telly package? Has she also claimed for her telly license as well? And more to the point, given that it’s supposed to be her second home, at which she only spends two or three days a week, has she only claimed 3/5ths of the bill, or does she have the even bigger cheek to be claiming the whole thing?

It’s this kind of thing which well and truly brings the whole system of expenses, and the reputation of politicians into severe disrepute. Does she really think the public are stupid enough to believe that if she wasn’t an MP she wouldn’t have telly and the internet at home? Claiming as an expense something she would have anyway, which doesn’t have any extra usage charges (like eg a phone bill) is shockingly and arrogantly taking the mickey out of us all; it is the epitome of the noses-in-the-trough reputation that politicians have only themselves to blame for.

Jacqui Smith is the one who’s got caught – almost certainly because the media guns are clearly out for her. How many others are taking the mickey in the same way?

My contribution today is, unfortunately, more of a rant about the current financial crisis most affecting the affluent nations than a considered piece about those for whom the real meaning of poverty is whether or not they have access to clean drinking water.

My simple question is, where has all the money actually gone to?

Financial poverty – at any point on the scale – is basically a result of a lack of money. We are told the world financial system is on the point of collapse because, in various points in the system, ‘the money has run out’. The banking system is collapsing because the banks don’t have the money to lend to each other to enable them to balance their books at the end of every banking day (I won’t say working day, since the banks finish work at 3:30…), the housing market is collapsing because the price of housing has grown way beyond anybody’s means, the development market is collapsing – leaving city centres at risk of being pock-marked by stalled half-built structures – because businesses realise they can’t afford all this grade A1 office space being built (aside: nobody’s been building any grade B office space…), and the stock market is collapsing because… well, that’s an interesting question in itself – of all the financial markets in the system, the stock market has to be the most artificial of them all. And in the most bizarre outcome of all, every tax-paying adult citizen of Iceland technically owes the UK about £5,000 each as a result of the collapse of the Icelandic banking system collapse.

But it all boils down to the same thing – markets are collapsing because the people who buy things in them no longer have the money to give to the people who sell things in them.

But surely the money must be somewhere?

After all, the Earth’s financial system is a closed system – the money has hardly been spirited away to Mars, & it seems equally unlikely that financial institutions the world over have been re-enacting the K Foundation’s famous piece of performance art in their droves. So given the unlikeliness of both those possibilities, where is the money?

‘We are told’ the origin of the crisis lies with the number of mortgages in the USA given to people who in the normal banking system would never have been lent such huge sums of money on account of doubts about whether they would be able to afford to pay it back. But far from the altruistic piece of social engineering this sounds like, in actuality the interest rates on these mortgages are punitive – at around 12%, double that of standard mortgages. And when the borrower is unable to make the high monthly repayments on the loans, the borrowers, rather than lowering the interest rate to an affordable level, simply foreclosed, putting the borrower out on the street. In a market where prices were growing, this meant the lenders creamed even more money, because in effect they couldn’t lose – get stonking monthly payments for a while, then reposess & sell at a higher price to the next person who can’t afford it, ad infinitum. A strategy which – for the banks – worked fine until the level of reposessions caused a glut in the market meaning the resale values of these homes stopped rising, and instead started falling. And ‘we are told’, like the proverbial butterfly in thailand causing the tropical storm in bermuda, the ripples from this proceeded to bring everything else crashing down.

But what about in the UK?

Here our housing market has been manipulated in a different manner. In the olden days or the modern era, people either bought their own house (using money lent to them by a building society, which was essentially the local community bank – owned by the people who had accounts with it), or lived in accomodation rented from the council. Then all the council housing was sold off to the people living in it, but little new council housing was created to replace it – meaning a shortage of rented accomodation. So instead people who already had homes started buying second houses – pushing the price up artificially – in order to rent to the people who could no longer afford to buy a home (and could no longer rent council housing because there isn’t any any more), and having to charge much higher rents in order to keep up the repayments on not one, but two mortgages.

Now rents have become so high nobody can afford them any more, so there’s a glut of empty buy-to-let properties around which the buyers can’t afford to lower rents on (to enable people to move into them) because then they wouldn’t be able to afford the monthly repayments on their double mortgages; basically, they’ve been holding out in the hope that somebody might be able to afford the rent, rather than lowering and committing themselves to a loss-making rent. But as those borrowers failed to meet the repayments (due to unexpected interest rate rise as the banks needed to claw in more funds), they themselves found the banks foreclosing on them. The banks, in the meanwhile, had so run out of funds that they stopped trusting each other to pay back the bung of a couple of million they lent each other at the end of each banking day – meaning the entire system has ground to a halt.

In the meanwhile…

…governments across the world have been busy part-nationalising banks in an attempt to inject more capital – using our money, of course – into the system in order to get the banks to start lending to each other again and get everything moving again. The banks have taken our money, but failed to keep their side of the bargain – they’re still not lending to each other, meaning the financial system is still borked – and every hour of every day it remains borked makes it so much harder for a full and speedy recovery to take place.

So what’s happening ?

Just like the buy-to-let second-home-owners who have been holding out in the hope that somebody will come along who can afford to rent their property, the banks themselves are holding out in the hope that something better comes along, or rather that another fraction of a percent is shaved off the interbank lending interest rate, or that another bank will go to the wall in the meanwhile, meaning more goodies for those who are left.

In short, it’s just a giant global game of ‘hold-your-breath’, with the ones who breath first being declared the losers and the one who breathes last the winner.

So, coming back to the question – where’s all the money actually gone?

The crisis is entirely in the financial sector, and within that, predominantly in the banking sector.

For the most part, the shareholders don’t have the money. The banks themselves of course have some of the money, but only what’s left.

Could it be that the missing billions are actually in suitcases under the beds of the directors and chief executives, who over the years have paid themselves huge bonuses, salaries, and benefits out of the profits they have made from the reckless policies they’ve been adopting over the years, knowing exactly the risks they were taking with our money, and knowing full well that eventually the bubble was going to burst?

A handful of executives have lost their jobs over the affair – but have any of them had their multimillion pound homes reposessed and been forced to move into bed and breakfast accomodation (because, of course, there are no council homes to move them into)? Have they been, are they going to be, held accountable for the mess they’ve made in any real sense?

In the real olden days, we used to have revolutions over less.