Britain, Economic, Financial Markets, Government, Politics, Society

The real crisis of capitalism

ECONOMIC

THE past week has been a time for recalling the events of September 2008, their long shadow over the economics and politics of the past ten years and for drawing the right lessons for the future.

In particular, did the financial crisis prove that capitalism is fundamentally unstable and that a new model involving greater control and a much bigger role for the state, as favoured by Jeremy Corbyn’s Labour Party, is a better one? Or, the fact that the guilty men and women mainly got away with it, meant that public anger over the crisis was never assuaged?

We should understand that the financial crisis did not begin on the weekend of September 13-14, 2008, which saw frantic but unsuccessful efforts to save Lehman Brothers, the Wall Street investment bank. The crisis had been simmering for well over a year, a period that saw the run on Northern Rock and the start of Britain’s deepest recession in the post-war period.

The bankruptcy of Lehman, announced on September 15, turned a smouldering crisis into a ravaging forest fire that spread rapidly around the world. Banks were bailed-out by free-market governments using public funds. Alongside near-zero interest rates, central banks including the Bank of England did things they never would have contemplated in normal circumstances, most notably quantitative easing (or the printing of free money). Governments spent vast sums of money that ran into the billions boosting their economies to ease the impact of the crisis, but on the basis that they would cut back later. Austerity, on a scale and duration not seen in this country since the Geddes axe of the 1920s, was the course chosen by the coalition government in 2010.

 

MOST of what people think they know about the past decade is wrong. The danger in 2008 was of a prolonged period of deflation – falling prices and economic depression, a modern version of the 1930s. The reality is that both were avoided. After the shock of the crisis the economy grew more slowly than had been the norm, but it grew. All advanced economies were afflicted by weaker growth.

Income inequality in Britain has fallen since the crisis, not least because the burden of tax faced by the highest earners has increased. This financial year, 2018-19, the top 1% will pay almost 28% of all income tax, compared with just over 24% in 2007-08, paying £12bn a year more in tax than before the near meltdown. The top 10% accounts for 59.7% of all income tax revenues, up from 54.3%.

Austerity, as practised by the coalition led by David Cameron and now by a Tory minority government under Theresa May, was never about shrinking the size of the state for ideological reasons. The coalition’s mantra before the crisis was that after the spending splurge under Gordon Brown, the “proceeds of growth” would in future be shared between tax cuts and increased public spending.

Even faced with the task of reducing an out-of-control budget deficit, Mr Cameron ring-fenced NHS spending and imposed a target of spending 0.7% of gross national income on foreign aid. A better criticism of Tory austerity is that too much of it involved cuts to government investment and that the process has dragged on for too long, partly because it was leavened with tax cuts, mostly for working people.

 

THE financial crisis and its aftermath were painful but too many Tories seem to have been cowed by it from making a robust case for capitalism. This leaves the way open for Jeremy Corbyn and John McDonnell, Labour’s anti-capitalist chancellor. When a privatised rail company messes up, or a housebuilding boss is awarded a bonus running into tens of millions of pounds, there is rightly an outcry. The crisis itself was the product, yes, of many greedy bankers and a few in handcuffs might have satisfied public opinion, but it was also the consequence of regulators whose job it was to stop them failing. In many cases, including the recent collapse of Carillion, many of these problems arise at the interface between the public and private sector.

Of course, we all want to return to a time when living standards are rising at a decent pace. That will be achieved only when productivity growth also returns to something approaching past norms. Capitalism in Britain has, since the crisis, delivered something like seven times the number of new jobs as those cut by the public sector. Unemployment is at its lowest since the mid-1970s. It is the private sector, not failed prescriptions of anti-capitalism, that will deliver prosperity in the future.

 

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Arts, Films

Film Review: Puzzle (15)

REVIEW

Modest champion: Actress Kelly Macdonald in Puzzle

A FILM can sometimes be so quiet and uneventful, yet at the same time so full of tenderness and charm, that at the end you would stand up and applaud if such exhibitionism weren’t so utterly at odds with what you’ve just seen.

Instead you simply sit there, smile or maybe even dab with a finger at the corner of your eye. Puzzle is such a film. It stars Kelly Macdonald, the brilliant Scottish actress whose ability to play a sweet, uncomplaining example of what the Americans call homemakers was recognised years ago by the Coen brothers.

Her performance as Carla Jean, the meek loving, anxious wife of Josh Brolin’s ill-fated Llewelyn Moss in the Coens’ 2007 masterpiece No Country For Old Men was one of that great film’s many pleasures.

But in Puzzle, Macdonald’s exquisite performance as an unassuming, unassertive, devoutly Catholic homemaker is the principle pleasure; all the picture’s other virtues radiate from it. She plays Agnes, whom is both cherished by her blue-collar New England family and taken completely for granted.

At the start, someone is celebrating a birthday. Agnes carries a cake ceremoniously into the room, but in fact the birthday is hers. She has made the cake, bought the candles, lit them, and now she blows them out, a deeply reluctant object of attention.

Her principle purpose in life, other than to attend Bible classes, is to care for her husband Louie (David Denman), who runs a car-repair workshop, and their two teenage sons, Ziggy (Bubba Weiler) and Gabe (Austin Abrams). She sees it that way, and so do they.

At first, her domestic drudgery and its drab backdrop, even the clothes she wears, suggest a period piece, a story of small-town America perhaps set in the 1950s.

We only learn this is the present because one of Agnes’s gifts is a modern smartphone. She does not welcome it – “like carrying a little alien robot in your purse”, she says – but is delighted to receive a challenging 1,000-piece jigsaw, which she completes in no time, then breaks it up and does it again. It is a map of the world, an irony not lost on us, even if it is on her; Agnes is the daughter of Hungarian immigrants, but could hardly be less worldly.

The short journey to New York counts as a daring adventure for Agnes. But she undertakes it, because only there, in a shop called Puzzle Mania, can she find more jigsaws like the one she has just completed.

She also finds an advert, “Champion Desperately Seeking Puzzle Partner”, and digging even deeper into reserves of boldness she didn’t know she had, answers it.

 

THIS leads her to a wealthy, lonely Robert, a man as urbane as she is provincial, played with quirky, beguiling charisma by Irrfan Khan. The unlikely duo start practising for a doubles competition in the National Jigsaw Puzzle Championships.

If they win, they will go on to the world championships in Belgium. They appear to have a chance, because Agnes has a genius for competitive puzzling that leaves even Robert agog.

But what this also means is that she must somehow explain to her husband why she’s no longer reliably at home every afternoon, preparing his dinner and darning his socks.

Certainly, a lesser drama would make him a demanding brute. But Louie is a decent cove who adores his wife, albeit preferably on his own terms. She is his puzzle, and maybe that’s the significance of the film’s title, because actually jigsaws are an irrelevance, though a delightfully wholesome one.

Agnes could have demonstrated a rare talent for juggling or mental arithmetic and the one-line synopsis would still be the same: a middle-aged woman seeing beyond the narrow horizons’ life seemed to have mapped out for her.

Moreover, as she grows in confidence, she begins to take charge of the relationships with the men in her life – Louie, her boys, even Robert. She learns how to be assertive with more than just jigsaw pieces.

Of course, this kind of personal growth is not exactly original cinematic territory – in fact, Puzzle is directly inspired by a 2009 Argentinian movie. But nothing about it feels derivative or predictable.

Marc Turtletaub, a first-time director, has made a terrific job of shaping the screenplay (by Oren Moverman and Polly Mann) into a sensitive and very moving film. Hats off to the whole production team for a very lovely film.

Verdict: Charming and captivating

★★★★★

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Biotechnology, Government, Health, Medical, Science, Society

Genomic medicine is being blocked by the NHS

NHS: GENOMIC MEDICINE

THIS MONTH the NHS will become the first health service in the world to offer whole genome sequencing to patients where clinically appropriate. Heralded by NHS leaders as “a new era of genomic health”, the goal is to use these data and new technologies to decode and treat previously intractable diseases, to move away from symptomatic treatments to cures and prevention.

The Prime Minister has said she wants the UK to lead the world in this new area of science – to continue a tradition of innovation in this country that will “extend horizons and transform lives”.

Theresa May’s ambition to lead the world in genomics and precision medicines is one that we should all want to support. Scientists and doctors know that pioneering precision medicines and their advances change lives, but they will also be aware of the challenges that must be overcome to realise its potential. This is not necessarily because the science is lacking, but because a fundamental shift in thinking is still needed by governments, regulators and policymakers in how they assess the value of this innovation.

Cystic fibrosis (CF) is an excellent example of this challenge. In 1989, when the cystic fibrosis gene was first identified, scientists did not know how mutations in the gene caused the condition. There was nothing to treat the underlying cause of the disease and people could only seek treatment for their symptoms.

After nearly 20 years of research and development by hundreds of scientists, and the design, synthesis and testing of more than 400,000 unique molecules, they have now done what was once thought impossible – discovered and brought to nearly half of all CF patients the first medicines to treat the underlying cause of this devastating disease. Today, multiple medicines approved by the EU and U.S. now exist, and there are more coming down the line. The ultimate goal is to cure CF once and for all.

For this remarkable cycle of innovation to be completed, Governments must now play their part, by providing patients with access to these medicines. Three years after approval of these medicines, this has still not happened because scientific innovation is outpacing the UK medicines evaluation system.

The evaluation criteria and processes used by the NHS and the National Institute for Health and Care Excellence (NICE) are currently preventing them from being made available to patients. Despite universal acceptance of the benefits that these medicines will bring, people in the UK have been waiting for access for more than 1,000 days, while thousands of people with CF in other countries in Europe and the US have been benefiting from them for years.

CF patients don’t really have the time to wait. Half of those with this cruel disease will die before they are 31. Science has delivered the breakthroughs, but the system is blocking access. The UK has the second largest number of CF patients in the world.

In 2016, the UK’s own chief medical officer recommended a fundamental shift in how new transformative medicines are developed and appraised for use in healthcare systems. The appraisal system in the UK needs to reflect that the genes and pathways underlying genetic diseases seldom respond to traditional pharmaceutical approaches, and so precision medicine requires risk-taking innovation.

The Life Sciences Industrial Strategy, a report made to the Government just last year, echoes many of these sentiments. It outlines the need for industry to take on bold, far-sighted ambitions in the life sciences with the intention of creating commercial success, underpinned by novel technology and higher-risk science. The strategy singles out a handful of successful biotech companies with highly innovative products. Yet, unlike in many other European countries, the NHS and NICE have not yet followed these recommendations and evolved their evaluation criteria for these types of transformative precision medicines.

The Government must surely need to act, not just for more than 10,000 people currently living with CF in the UK, but also for people suffering from many other kinds of genetic diseases.

Genomic medicine stands on the cusp of becoming an everyday reality. Those institutions at the cutting edge of gene therapy and gene editing need a system that is already thinking about the innovations of tomorrow. Such systems need to incentivise innovators to get medicines into the hands of patients as soon as possible.

Organisations involved in scientific advances will never give up on their ambition to cure serious diseases that today might still seem impossible to tackle. While they continue to deliver on the science, the UK Government must show its commitment to biomedical innovation if the genomic revolution is to be fully realised.

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