Economy of Jersey 1: The Construction Business

Apartments are constructed  for sale as investments not homes

WHY AN AVERAGE FAMILY HOME FOR AN AVERAGE FAMILY ON AVERAGE WAGE IS NOT A POSSIBILITY IN JERSEY

In order to ensure a satisfactory standard of living it is essential that an ‘average’ family can afford to purchase an ‘average family’ house.

Current lending criteria for banks are as follows:

Maximum Lending: 5x Annual Salary for main earner 

plus 1x Additional Annual Salary

Average salary[i] £32,448.00 x6= £195,000. Assuming a deposit of 10% an ‘average family’ home in Jerseyshould cost £215,000. An ‘average family’ home costs £435,000 in Jersey.

Whilst you may consider the above a failure of government itis in fact a result of government policies let's move on to examine the mechanisms employed by governmentto artificially inflate house prices:

Income Support

Payments in respect of accommodation for the indolent createa base line for the rental values of properties. The income support payable ona one bedroom property to house one person is currently £661.00 per month[ii] This means that a private individual buying a propertyvalued at £150,000 with a 4% interest rate and 10% deposit will have the mortgage covered if the property is let toa person in receipt of income support. It may be no coincidence that the majority of propertiesconstructed in Jersey in recent times fall into this model. This isconstruction for the purpose of investment, not for the proliferation ofproperties for families.

0% Capital Gains Tax

The lack of Capital Gains Tax in Jersey means that investorsunder the model outlined above will in due course be able to sell the propertiesand make a ‘capital gain’ tax free. The capital investment therefore servessolely to underpin the price of property in Jersey by providing high valuationsto properties which are considered by many to be barely ‘fit for purpose’.

The two causes above fix the bottom of the property marketin Jersey.

1.1(k)

The effect of category 1.1(k) is to provide a market and anunderpinning of prices for the high value properties. By effectively ensuring a£1,000,000 price ticket for the largest properties the top of the market itset.

1.1(h)

By reducing the qualification period for category 1.1(h) ofthe housing regulations the government can artificially stimulate additionaldemand for the mid range properties, by increasing the qualification period itcan artificially stifle demand.

Conveyancing

By granting a monopoly to the legal profession in theconduct of conveyance, unusually it is the only matter before the Court forwhich a person is not allowed to represent themselves (in contradiction of theEuropean Convention on Human Rights, Right to Justice) this places anadditional expense in the execution of property transactions. In the UK conveyancecosts range between £150 and £600 in Jersey they are substantially greater.This is both as an additional cost to purchase but perhaps more importantly asa barrier to ‘downsizing’ by limiting the capital release on moving to a moreappropriately sized property. This artificially creates additional demand forfamily homes by ensuring that family homes are the residence of just one or twoelderly persons.

Over-employment

By creating additional jobs of questionable necessity in the public sector thegovernment of Jersey places further demand on housing in Jersey. Jobs which arefilled remove workers from the real economy which leads to increased immigration and greater demand for the finiteresource of housing in Jersey.

Through the above I trust it is self evident that not onlyis the government not doing anything to allow an average family access toaverage family homes but it is actively working to ensure that average familyhomes will perennially remain beyond the reach of average Jersey families. The high cost of accommodation is further damaging to the wider economy as it forces up the cost of labour.

The Future of House Prices in Jersey

It should be clear despite a recent government adjustment to the way in which statistics are produced that the price of housing is falling. With continuing difficulties in achieving lending from insolvent banks, with no prospect for any increase in salaries in real terms, with increasing unemployment, the future for house prices looks like it is going to continue to decline. If house prices are falling at a time of major inflation, then the real loss is higher than it appears on paper. Throughout the 1970's property prices sky-rocketed along with the rate of inflation. These days house prices and inflation are moving in different directions.

Buying a house currently is the surest way to lose your money.

---

[i] http://www.gov.je/Government/Pages/StatesReports.aspx?ReportID=448

[ii] http://www.gov.je/BENEFITS/INCOMESUPPORT/Pages/Rates.aspx

The EU in crisis: Hope versus Economic Reality

How can a Greek DEFAULT  be a success?

Right now, we're seeing much the same global reaction we saw after many of the EU's previous 13 crisis summits: officials are congratulating themselves for doing next to nothing. The media is proclaiming the meetings "successful." So are all stock markets and currencies except for the dollar.

So where's the beef behind Europe's latest news? THERE IS NONE!

Over the next few days, the reality of the EU's hopeless situation will set in with investors. The euro will continue its collapse.

They've had one heck of a party on Wall Street in the past few weeks. The Dow Jones Industrial Average shot up from 10,404 on October 4 through 11,891 yesterday — a gain of 1,487 points in just 22 calendar days.

The reasons I hear most often cited?

HOPE for the mega-bailout in Europe.
HOPE for a mega-refinance plan that will help every beleaguered homeowner in the U.S.
HOPE for a mega-compromise from the deficit "Super Committee."

HOPE that fund managers — who are hopelessly falling behind their benchmarks — will just throw money at any piece of you-know-what stock to try to make up their performance gaps so they don't get fired come January 1.

That's a big heaping of hope, as far as I'm concerned. And unfortunately for the bulls, hope is now colliding with reality — and not in a good way! That tells me we're due for more losses ... possibly very soon!

Let's start with the bailout talk from Europe. The latest market hopes, based on the European Union summit we had this week, are that European banks are going to take 50 percent haircuts on their Greek debt ... that the 440-billion euro European Financial Stability Fund will be leveraged up to 1 trillion in a couple of different ways ... and that banks will be backstopped with around 100 billion euros in additional capital.

That all sounds good on the surface. But when you look at the action in the European BOND market, you see that real-money investors just aren't buying the happy talk! They apparently don't believe European politicians can afford to do what they say they can do!

Do you want a brutal dose of reality? Do you want to know why European officials have met 20 times this year alone — and STILL failed to come up with a bailout that actually works? Italian 10-year yields have surged up toward 6 percent again, closing in on the highs they set several weeks back. Spanish and Portuguese yields are also climbing. And the difference between yields on French and German debt just exploded to an all-time high. This is all happening AFTER the European Central Bank started buying PIIGS bonds in a futile attempt to prop up their prices and AFTER the outlines of the latest bailout schemes were leaked to the market.

Then here is the reality:

The peripheral European countries are virtually broke. The only way they can survive over the long term is if their debt burdens are slashed dramatically. At the same time, countries like Germany and France can't afford to spend hundreds of billions of euros bailing out their neighbors without destroying their own balance sheets!

Plus, the circular nature of this bailout fund is downright ludicrous! You literally have countries like Italy and Spain borrowing money and putting those funds into the bailout fund ... so it can turn around and spend that money buying up those countries' bonds.

Does that make sense to you? Does that sound like a plan that can actually work over the long term? Bond investors sure don't think so, because the yield on the EFSF's OWN outstanding bonds are climbing, a sign that the fund's AAA status is slowly coming into question.

My take is simple: Please don't rely on hope when it comes to investing. Look at the cold, hard facts and reality on the ground. They suggest we haven't seen the worst for stocks, despite the recent rally, and that caution remains your best investment bet!

Gold standard: Renminbi contracts available in Hong Kong

On Monday, the first gold contracts denominated in the Chinese Renminbi (also known informally as “yuan”) came to the Hong Kong market.  Analysts have been quick to note the implications of a yuan-denominated contract, realizing that the new contract could drive nearly three times as much demand as the dollar-denominated contract.

Looking at the yuan product from the macro-view, a move into gold is about more than just gold—it’s about reserve currency status.

Whilst direct trading of the Chinese currency is prohibited, gold now offers investors the opportunity for exposure to the world's fastest growing economy.

An end to the dollar's monopoly

The US Dollar has a monopoly as the world’s reserve currency.  The size and scope of the US economy and financial markets, combined with the relative stability of the political climate, made the US dollar a preferred currency for international trade.

However, the reason most cite for dollar dominance isn’t the United States’ role in international commerce, but its monopoly on a single product—oil.  In an agreement with Saudi Arabia, the United States effectively tied the global oil market to the US dollar.  No other currencies could be used to purchase “black gold,” the driver of modern industry.

Signs of Defiance

As China grows, it naturally wants to extend its reach as an economic powerhouse.  Recently, in a move that rattled those who see the dollar as the only reserve currency, China agreed to trade oil and energy products with Russia in their own currencies.  This should have been seen as a warning sign, a move that would lead to new policies to make the Renminbi a global currency for commerce.

Relative to other commodities, gold is relatively unimportant to commerce.  Most of us can keep our cars running and the factories on without gold. 

Renminbi Goes Global

Gold is a very important commodity in the realm of modern finance, however.  In allowing the markets to buy gold denominated in the Chinese currency, investors can essentially exchange yuan directly for other currencies, using gold as a proxy.

That is to say investors now have a binary trade to buy and sell Renminbi.  Buying the Renminbi requires holding a short gold position in yuan and a long gold position denominated in another currency.   Once the gold is netted out by equal short and long positions, investors have only foreign currency exposure.

Never before has it been so easy for investors to buy and sell Chinese Renminbi directly or indirectly. Investors have long sought to play the rising Renminbi, but Chinese capital controls kept the currency as a primarily local institution.  Now it’s available to most everyone, and with two simple transactions, enough Renminbi can be purchased, provided there’s enough gold available to back each trade.

And so this is where the Chinese realize the importance of gold.  Allowing the yuan-denominated contract to trade will only increase investor appetite for other yuan-denominated commodities.  While oil contracts may be a few months or years away, the reality is that the Chinese are positioned to make the Renminbi a world reserve currency.  It’s only a matter of a few new commodity contracts to get the world’s attention.

Financial news - the collapse of Dexia

Dexia sank like a lead balloon once banks stopped lending to them

A giant bank has just gone under. It’s the biggest bank failure since the debt crisis of 2008-2009. It’s so big, in fact, that its assets are actually LARGER than the total GDP of the country where it’s domiciled.

The bank that failed is Dexia, and the country is Belgium. But if you don’t live in Belgium ... and you think that fact makes this failure less relevant to your banks or to your investments, consider these shocking facts:

Shocking fact #1. Dexia was the world’s largest lender to municipal governments in the U.S. and overseas. So as the bank’s various pieces are chopped up and sold off to other institutions, it’s naturally going to be a lot tougher for municipalities to get financing.

Result: More belt tightening and job cuts at local governments everywhere.

Shocking fact #2. Dexia was one of many large banks that actually PASSED Europe’s official “stress tests” just three months ago.

And yet it’s the first to go down!? What does that tell us about the OTHER, even larger banks that supposedly passed the tests?

We're talking about giant banks loaded with bad loans like ...

• Italy’s UniCredit, which is 1.8 times larger than Dexia in terms of assets ...

• France’s Société Générale, which is more than double the size of Dexia ...

• France’s Credit Agricole, which is almost three times larger than Dexia ...

• And France’s BNP Paribas, nearly FOUR times larger than Dexia.

The big disconnect: The official stress tests let these banks lie through their teeth about their huge loans to Greece, Ireland, Portugal, Italy and Spain.

Those loans are worth as little as 40 cents on the dollar on the market. And yet, in the recent stress tests, the banks were allowed to value them at 100 cents on the dollar!

Result: They also lied about their capital and their solvency!

This absurd — and deliberate — oversight by the banking regulators is widely known; and they’ve already been raked over the coals for it.

What’s not widely known is ...

Shocking fact #3. It wasn’t recognition of the bad PIIIGS loans that sunk Dexia. Even now, as Dexia is being split up and sold off, it’s STILL carrying those loans at full value on its books!

So what did sink Dexia?

It was a bank run — the sudden and mass withdrawal of its funding.

Moreover, the run on Dexia’s funds was not by consumers lining up on the street to pull out their deposits. Rather, it was by so-called “wholesale funding” sources — other big banks and institutional investors who can pull out hundreds of millions of euros and dollars with a simple click of the mouse.

What makes this truly shocking is that nearly ALL large banks in Europe — including many that supposedly passed the stress tests with flying colors — also depend very heavily on these same funding sources:  

On average, they get nearly HALF of their money from these here-today-gone-tomorrow funding sources. That’s far MORE than they get from ordinary deposits.

Even Moody’s admits: “Until this problem is corrected, ‘fixing’ European banking is merely applying band-aids.”

And guess what! The promises made last night by France and Germany — to “recapitalize the banks” — do NOT fix this problem!

If anything, if France and Germany throw more good money after bad into saving these banks, it will merely sink their own finances, invite more ratings downgrades, cause bigger losses in sovereign bonds, and dig a deeper hole in the banks’ capital.

Shocking fact #4. Some of the largest U.S. banks, including Bank of America and JP Morgan Chase, are equally vulnerable, according to analysis.

They’re loaded with toxic assets of their own. And to make matters worse, they have placed big bets with European banks.

Just bear in mind that the crisis is hitting right now. So time for protective action is running out.

Politics and the Media 2 - Jersey Evening Post

Does the role of the JEP in Jersey prevent free & fair elections?

I have previously examined the legal basis for defining a public authority.  The Jersey Evening Post may be considered a 'functional public authority' as a result of the following laws; the Jersey Gazette Act 1960 and the Official Publications (Jersey) Law 1960. These laws enforce the public declaration of certain information in the Jersey Gazette and define the publication in which these pronouncements must be made as the Jersey Evening Post. In a previous post I looked at the concerns raised about the JEP by Senator Cohen and the effect of the media on elections in the United States of America.

The following legislation all require pronouncements to be made in the Jersey Gazette (although this is not the definitive list, there are many more):

• EUROPEAN COMMUNITIES LEGISLATION (BLUETONGUE) (JERSEY) REGULATIONS 2008
• COMMUNITY PROVISIONS (MORTALITY IN OYSTERS) (JERSEY) REGULATIONS 2010
• EMPLOYMENT RELATIONS (CODES OF PRACTICE) (JERSEY) ORDER 2007
• PUBLIC ELECTIONS (JERSEY) LAW 2002
• INSURANCE BUSINESS (JERSEY) LAW 1996

This is clearly a very diverse group of laws and will affect the majority of people's normal daily life.

Hopefully it should be clear that in terms of publication of notices and in each edition of the Jersey Evening Post which contains the Jersey Gazette the Jersey Evening Post is acting as a functional public authority.

Looking at the level of taxpayer money which is spent with the JEP this was £334,000 in 2009/10 and £277,370 in 2010/11. Clearly the economic survival of the Jersey Evening Post is dependent on the taxpayer.

As each issue of a Jersey Evening Post contains official government and legal information; it is unclear whether this has the effect of convincing the people of Jersey that everything that is stated in the Jersey Evening Post is 'official' and therefore 'true'. I of course am not suggesting that everything that the government says is true, clearly it is at best 'presented in the most favourable light'.

There is a further difficulty in that as the only newspaper and the only media agency not subject to the strictures of the broadcasting legislation which requires that all reports are balanced and without bias, it has a disproportionate effect in controlling the social consciousness of Jersey.

It would be most interesting to see whether a Court would consider the existing arrangement as likely to cause an incompatibility with Convention Rights, specifically Article 3 of Protocol 1, the right to free and fair elections.

The lack of debate at the last election was evident as no discussion was made as to the future of the economy of Jersey which clearly is the pre-eminent issue affecting all our futures, there are other points which I will address in future posts.

Politics and the media 1 - The United States of America

Freddie Cohen finished 6th in the 2011 Jersey Senator Election

Freddie Cohen at the end of the last election criticised the biased coverage of the election by the Jersey Evening Post, joining a long list of political figures in Jersey to have done so, for example Guy de Faye three years earlier.

The allegation has been made, by a source I will not disclose, that the JEP like to see one 'establishment' candidate ousted each election to perpetuate the illusion of change for the people of Jersey, whilst the power remains firmly in the hands of the same interests.

Indeed when I volunteered for the National Trust for Jersey black butter making, I took the opportunity to speak to some people who had voted for Sir Phillip because I honestly do not know anyone who did. They told me that they felt they had no choice because, 'We needed change'. I agree with them but I do not think that Sir Phillip is likely to bring about any real change. In Jersey politics we know that what is said during an election is unlikely to come to pass and Sir Phillip has shown a remarkable reluctance to accept any change either to the position of Bailiff or to Crown Officers.

I agree there is no need to personalise any criticism, debates should be won by strength of argument and on the basis of available evidence, but people have to be free to point out errors in the way the system works. 

The 'establishment' is not right simply because they are the establishment. I fear that Sir Phillip's definition of change is simply to see less people arguing against the policies of the government in public.

In a subsequent blog I will examine the role of the Jersey Evening Post and consider whether it constitutes a basis for a declaration of incompatibility with Convention rights, but first I want to look at the role of media in other countries.

There has been much debate with regard to the candidacy of 70 year old Ron Paul for the presidential nomination for the Republican Party in the United States and the constant attempts of the US media to sideline his candidacy.

Dr Ron Paul, GOP Candidate for Presidential Nomination 2012

Ron Paul is the standard bearer of the modern Libertarian movement who advocates small government, low taxes and civil liberty or as it is more accurately described freedom from government.

Ron Paul started life as an obstetrician and gynaecologist and practised what he preached; his practice would not participate in any federal health programs, which meant, that they saw all Medicare and Medicaid patients free of charge, and they will be treated just like all of our other patients, but they weren't charged and the practise did not accept federal funds.

"Some of the people would bring chickens, or they would bring vegetables from their garden if they couldn't afford to pay for their obstetrical fee," recalls Richard Hardoin, a pediatrician who used to care for the babies Paul delivered.

A long time interest in economics, particularly the Austrian School, convinced Dr Paul to set up a numismatic company buying and selling gold and silver coins in 1971 when the US cancelled the Bretton Woods agreement (which guaranteed every $35 with one troy ounce of fine gold). He recognised then that this would lead to uncontrolled spending and unlimited inflation - and put his money where his mouth was.

In 1976 he was one of only six representatives to back the candidacy of Ronald Reagan although backed off supporting Reagan once he was elected because he moved away from the position on which he was elected.

Ron Paul does not change his mind. He tells you in advance what to expect and what he says has support throughout the USA.

A close examination of the presidential nomination race identifies that there are two candidates - Mitt Romney a middle of the road guy and Ron Paul. But to read to the media the race has always been Mitt Romney and A.N.Other. First it was Michelle Bachmann who topped the Iowa straw poll just eight votes ahead of Paul but her star waned and Rick Perry became the centre of media attention. Perry himself is now fading fast and so Herman Cain has become the media darling. Cain upon closer scrutiny also is beginning to lose ground and so Newt Gingrich is beginning to be bought in as a replacement. Each wave of media hype brings a candidate to the fore only to see them wane when they are subjected to debate.

Through it all Paul remains consistent across the nation, his support is particularly strong amongst past and present US servicemen and younger voters. His support is consistent and unwavering and most importantly he consistently beats Obama in head to head opinion polls, whereas Romney does not.

You would think that the Republican party would be keen to nominate him, but the media who are funded by Corporate America through advertising revenues, know that he will not be bought and paid for by special interests and lobbyists and thus is a threat to their future revenues. The future of the US media lies in the status quo and so they seek a big government, high spending candidate to oppose the big government, high spending Obama.

ECHR 2: Are Jurats an affront to your civil liberties?

Jurats led by Jurat Le Breton, Liberation Day 2008

Extract from: Jersey courts website

Italics indicate editorial additions.

Jurats are elected to serve in the Royal Court and to decide questions of fact in court cases. They sit next to the judge and not only decide the facts in both civil and criminal trials; they also award damages and fines as well as determine sentences.

The work of the Jurats is unpaid (although they receive substansial 'expenses' and benefits such as free parking in Vine Street) and they are appointed by the Electoral College, consisting of the Bailiff, Jurats, the Connétables of the 12 parishes of Jersey, the elected States members, members of the Jersey Bar and Solicitors of the Royal Court.

It seems likely that this would cause a declaration of incompatibility under Article 3 of Protocol 1of the Convention as all elections for public bodies must be held by universal suffrage.

When there is a vacancy, a copy of a letter from the Bailiff announcing this is delivered to each member of the Electoral College. If there are as many candidates, as there are vacancies –all the nominees become Jurats. If there are more people wanting to be Jurats than there are vacancies, a ballot takes place at a specially convened meeting ofthe Electoral College held in the Royal Court. If the first ballot results in an equal ballot of votes for each candidate the Bailiff calls for another vote. If the result of the second ballot is inconclusive, only then is the Bailiff permitted to vote and declare the final result of the ballot.

Any person who contests thevalidity of the appointment of a Jurat by the Electoral College may present a Remonstrance (Representation) to the Superior Number of the Royal Court.

Every Jurat appointed by the Electoral College is required to take an oath of office before the Superior Number of the Royal Court. The oath is most likely to have been in existence since 1204.

Cases heard before Jurats in the Inferior Number of the Royal Court

The Bailiff and two Juratsconstitute the Inferior Number of the Royal Court. The Inferior Number tries all contested civil matters (other than within the Petty Debts Court). Customary law offences such as murder, manslaughter, rape, grave and criminal/indecent/common assault, fraud, and theft are tried before a jury at a Criminal Assize (Crown Court).

The Inferior Number tries the more serious contraventions (e.g. breaches of a Law passed by the States), which are beyond the jurisdiction of the Magistrate. The criminal cases most commonly tried by the Inferior Number are contraventions of the Misuse of Drugs (Jersey) Law 1978 and Customs and Excise (Jersey) Law 1999 which can attract prison sentences of up to 14 years.

The Inferior Number may impose a custodial sentence of up to four years. However the Inferior Number tries all such cases even though the sanction that might be imposed in the event that the accused is found guilty might exceed the limit of its sentencing jurisdiction.

The Superior Number of the Royal Court consists of the Bailiff and at least five Jurats 

The Superior Number primarily sits as a sentencing Court in criminal cases where a custodial sentence is likely to exceed four years. The Superior Number also possesses a residual appellate jurisdiction to hear an appeal against sentence only imposed by the Inferior Number. The Superior Number does not sit to try civil orcriminal cases at first instance.

The respective functions of theBailiff and the Jurats are set out in Article 16 of the Royal Court (Jersey) Law 1948. The Bailiff is the sole judge of law and procedure and has the power to award costs.

The Jurats decide the facts, award damages and determine the sentence or fine or the sanction in criminal cases. In all causes and matters, civil, criminal or mixed, the Bailiff has a casting vote:

(a) if two Jurats are divided asto the facts or the damages to be awarded or the sentence, fine or other sanction to be imposed; or

 

(b) if more than two Jurats are divided as regards any one or more of the matters specified above that a casting vote is necessary for the finding of a majority opinion

Jurats act as Returning Officers for all public elections i.e. where candidates stand to be elected members ofthe States of Jersey (Legislative Assembly) as Senator (12), Connétable (12) and Deputy (29), as well as for Procureur du Bien Public and Centeniers.

A declaration of incompatibility is likely in regard to any matter relating to elections as under Article 13 of the Convention as the Royal Court Rules require that any case bought under Part 9A of the Royal Court rules (Human Rights (Jersey) Law 2000) must bebought in the first instance to the Royal Court which must consist of at least two Jurats. As Jurats serve as officers for both the election and the Court case there is thus no effective remedy because the demands of natural justice cannot be served. There is no independent tribunal available. 

How much longer the position of Jurat continues to exist is largely a matter of how long before someone brings the incompatibility with the Convention to the attention of the Court, but how can the case ever be heard in Jersey when the rules require Jurats to sit?

Jurats also sit as members of the Licensing Assembly (granting liquor licences), Gambling Licensing Authority, Probation Committee, Prison Board of Visitors, the appeal panels fromdisciplinary decisions of the Attorney General in relation to Honorary Policeand from disciplinary decisions of the Chief Officer of Police in relation to officers of the States of Jersey Police.

ECHR 1: Is the JEP a public authority under the case-law of the ECHR?

The European Convention on Human Rights (ECHR), established under Winston Churchill's leadership and influenced by the lessons of World War II, was designed to shield individuals from government overreach. It allows individuals, after exhausting domestic remedies, to bring cases before the European Court of Human Rights. If successful, the Council of Europe acts to rectify the violation. Different countries respond variably to court rulings: the UK adapts laws relatively swiftly, while France lags with outstanding amendments.

The ECHR holds states accountable not only for direct violations by "pure public authorities" (e.g., government departments, police) but also for breaches by private organizations performing public functions. A private entity may be deemed a "functional" public authority if:

It operates closely with or under delegation from a state body, exercises statutory powers of a public nature, or wields coercive powers devolved by the state.

However, broader factors such as public funding, regulatory oversight, or a public interest focus typically do not independently establish public authority status, though they may contribute cumulatively. The precise definition of "public authority" remains unsettled, awaiting further clarification by the courts.

The Jersey Evening Post ("JEP") performs many public functions, indeed if not for significant subsidies from the States assembly in the form not only of direct advertising, but in shouldering the cost of journalists through the Chief Minister's department. The shift of the cost of running the JEP from the private sector to the public took place during Frank Walker's reign as Chief Minister. That he was able to sell the JEP at a profit following the changes is just one example of conduct which might be subject to scrutiny in the future.

Social Control: Inflation - an insidious tax on capital

Twenty Dollar Gold Coin (1 troy ounce fine gold)

I was looking at my $20 dollar gold coin the other day, it is amazing how little it has changed since it was minted in 1887, the greatest change being the value of it which has ranged between $1,550 and $1,900 so far this year, which since it was worth $20 till 1933, then $35 till 1971 is a sign that the good times ended a long time ago.

But the truth is that if the coin has not changed, if it is the constant, then what has changed? The answer has to be the value of the dollar. Inflation is a hidden tax and like all taxes is disproportionately levied on the 'poor'.

By 'poor' I don't really mean the poor, who on a global scale are those who earn less than $800 per year, they have nothing anyway, so they have nothing to lose. In fact everyone who lives in Jersey is rich, everyone has an income of at least $7,500 per year. That places them in the top 20% of the world's rich. The 'poor' are those who are between 2% and 20% on the 'rich list'. If you have $50 million then you are ultra-rich top 1% in the world. Coincidentally there are not that many of these people in Jersey.

Inflation since then has been running at about 10% to 15%, I am well aware that those rates are substantially higher than the government statistics and I will explain later how the government massages the statistics but for now you are just going to have to take my word for it.

Over that time period interest rates have been 0%, wage increases have been 2%, taxes have been raised as follows: GST +2%, Social Security +1.5%, accounting for the loss of income tax allowances versus increase in threshold and whilst I obviously cannot give an exact figure for every person for an 'average' person it is around £2,500 which is +7.5%, when all the other stealth taxes are taken into account that means that the 'average' person is paying around 10% more tax than they were three years ago.

Now it may not seem so bad, yet, because mortgage interest rates are so low, but let's look at the value of that house.

Again government statistics are confusing as they continuously change the way they are calculated but let's assume a drop in value of 10% over that period. A house that was £500,000 is now worth £450,000. But that is not the true decrease in value.

Not only has you decreased in value by 10% in terms of £sterling but the value of £sterling has decreased in value against other asset classes.

In 2008 the house you purchased for £500,000 would have cost you 1,000 troy ounces of gold, sell your house in 2011 for £450,000 and you will be able to buy 400 troy ounces of gold. Six tenths of your worth has been wiped out, probably without you even realising.

The buying power of your income has similarly decreased, the value of your pension fund, the value of your savings.

Government uses inflation as a means of wealth extraction to fund social programs and war. We in Jersey who use £sterling have been paying for the United Kingdom's debt through this means.

Mechanisms of Social Control 1: Welfare

The Welfare State

The welfare state, as defined in textbooks, is a form of government where the state ensures the economic and social well-being of its citizens, based on the principle of public responsibility for those unable to secure a decent standard of living independently. While this concept encompasses various economic and social arrangements, critiques suggest it fosters dependence that aligns with governmental goals of social control.

This dependence increases as higher taxation funds more generous social programs, ensnaring more citizens in a cycle of benefit reliance. This dynamic creates a tacit agreement between voters and politicians: politicians promise support and voters absolve themselves of personal responsibility, preferring leaders who pledge, "Trust me, I will look after you." Critics warn this collective complacency mirrors the behavior of a herd led unknowingly to unfavorable outcomes.

Key concepts contextualizing this discussion include:

• Social Welfare: Programs providing resources to individuals in need, ensuring societal participation.
• Social Control: Mechanisms (sanctions and norms) that ensure conformity and preserve social order.
• Coercion: Circumstances limiting choices, compelling individuals to adhere to specific requirements to access entitlements.

These definitions illustrate how welfare systems navigate the tension between providing support and exercising control over recipients.

Further reading:

Social Welfare as Coercive Social Control Norman N. Goroff, 1 October 1974, ScholarWorks at WMUDOI: 10.15453/0191-5096.1061

Archive of coverage of the 2011 election

Thirteen islanders have put themselves forward for one of four senatorial seats in the States of Jersey. The election race is now on, as senatorial candidates will be joined by constable and deputy nominations. In a crowded Town Hall on Tuesday night, 13 people were nominated by fellow islanders to run for senator. Nine had announced their intentions, but four were new additions to the group of candidates wanting an island-wide mandate.

The list includes three women: Advocate Rose Colley, Sylvia Lagadu and Linda Corby. Three sitting States members have declared: Senators Freddie Cohen and Francis Le Gresley and Deputy Ian Gorst. Jersey's former Bailiff Sir Philip Bailhache and the former Health and Social Services Minister Stuart Syvret will both put their names on the ballot. Other candidates include Lyndon Farnham, Darius Pearce, Christopher Whitworth, David Richardson and Mark Forskitt.

If any of those candidates put themselves forward to run as a constable or deputy, their senatorial nomination will be cancelled out.

There are 61,987 people registered to vote in the election on 19 October 2011. It will be the first time in Jersey's history that constables, deputies and senators have been elected on the same day.

[13 Candidates stand for Senator in election, BBC News, 7 September 2011]

As a result, the court will next week hear jewellery shop owner Darius Pearce’s claims that the Deputy’s proposer at last week’s nomination meeting breached the election law. The court ordered media organisations to hand over recordings of the meeting. Mr Pearce, who is one of 13 candidates in the Senatorial election, claimed that during the nomination meeting on Wednesday last week the Deputy declared he had a conviction, but did not say what it was.

[Candidate in move to stop Deputy standing in election, 17 September 2011]

[Judgement of the Royal Court, 20 September 2011 Representation of Darius Pearce [2011]JRC180A]

...

This week the number of Senatorial candidates dropped from 13 to 12. Okay, so not exactly, but would-be politician Darius Pearce ruled himself out as a credible candidate in my view by vowing to boycott the majority of the forthcoming hustings meetings.

I mean, come on, branding an opportunity to answer the questions of the public as ‘a waste of time’ isn’t the best move.

Sure, as he points out, candidates are only given a few minutes for a speech and then a minute-and-a-half to answer questions – but how else can it be done?

And, if you can’t present yourself succinctly and clearly in that amount of time, then there’s no hope when it comes to debates in the Assembly.

Mr Pearce said he would prefer to see no speeches and just questions and has said he will spend the time when he should be at hustings knocking on doors so he can meet voters and answer questions in full. Apart from – wait for it – the three hustings where the BBC will be filming. (Enter your own outraged comments about publicity seeking here.)

I just cannot fathom why a candidate for election would even consider such a move. It is an insult to the system, to tradition, to voters and to the other candidates. Why not just grin and bear the 13 meetings (like everyone else has to) and present yourself as someone there for the public, no matter what ,and willing to do what it takes to make a difference in your Island.

I suppose the least that can be said for Mr Pearce is that he is honest and won’t put up a front just to get elected. And it will be one less speech for us to listen to.

...

[JEP editorial on Darius Pearce, 20 September 2011]

...

On a final note, I’d like to publically commend Senatorial candidate Darius Pearce for going against his promise to boycott the hustings and turning up in Grouville.

After phone calls from parishioners in St Peter, where he didn’t attend on Wednesday, the jewellery shop owner said he had ‘been wrong’ not to go. And he even gave a speech, an off-the-cuff one that could only have been of his own making.

[JEP editorial on Darius Pearce, 27 September 2011]

After a hearing lasting almost three hours, the court rejected an application from Senatorial candidate Darius Pearce asking that Deputy Southern’s nomination be declared invalid. He had claimed that the Deputy’s proposer had breached the election law by failing to read out the candidate’s criminal convictions on nomination night. However, the case did expose two gaps in election procedures, which Deputy Bailiff William Bailhache said needed sorting out.

[Court win for Southern – but case highlights failings, 21 September 2011]

[Election Results, JEP, 20 October 2011] [Election results - JEP 20 October 2011]