Tuesday, October 30, 2007

Tyrant lectures Democrats

As the bloated entourage of the Saudi King decamps to London for a full State visit it is hard to suppress the gag reflex.

The Saudi regime corrupts all who engage with it. The disgraceful way that the UK has attempted to brush under the carpet the allegations of bribery against British Aerospace can not disguise the fact that the perfumed princelings of the House of Saud will always demand their cut.

Meanwhile the austere version of Islam- Wa'habi - that the House of Saud proclaims has created the murderous perversion of Osama Bin laden and his deranged acolytes. The oppression of women, and the barbaric punishments that a twisted and corrupt system of justice inflicts upon Arabian citizens are merely the most egregious examples of a backward and tyrannical state.

This vile regime, greeted with open palms by the British state already manages to lecture the British about terrorism. Of course the British know about terrorism because we have been victims of it. The House of Saud knows about it, because the system they have created has spawned it- of the 19 criminals of 9/11 we should note that 15 were citizens of the desert kingdom as is Bin Laden himself- and Saudi money funds Al Qaida and its imitators.

Taking a lecture from the gouty Saudi monarch really does make one reach for the sick bag.

Frankly I am astonished that only Vince Cable and the Liberal Democrats refuse to get on the Saudi merry-go-round. The boycott of this disgusting farrago is something that far more people should have become involved with.

The fact that BAe and others have engaged with this unstable and vicious state is a disgrace and something that they will surely regret- in the fullness of time, when the corrupt princelings are overthrown.

Yet again, as with Nicolae Ceaucescu, we have exposed the Queen to future ignominy.

Monday, October 29, 2007

How (not) to win friends

I see DC managed to infuriate the Lithuanians through a rather crass remark over the weekend.

On the one hand it seems a bit petty to get cross, but on the other there are 100,000 Lithuanians who Cameron clearly thinks are a bunch of layabout dole scroungers.

In fact they are mostly hard working, church going types.

Judging by this letter, they may have a sense of humour too:

"Dear Editor,

I see that David Cameron has suggested that one legged Lithuanian lesbians should not receive lottery or Arts Council grants.

I am pretty surprised that such bias can be openly expressed by a British Political leader in this day and age.

Admittedly, no one in the 100,000 strong Lithuanian community currently resident in the UK is aware of any one legged lesbians amongst us.

However, we are sure that should such a person exist and they had the relevant artistic talent then they would receive their grant based on the same criteria that a one legged lesbian Conservative would, namely through the quality of their work.

Lithuanians in the UK are often well qualified and working at the highest levels. Amongst our small business people is an exceptional group of hard working entrepreneurs- we are not the kind of people who ask for hand-outs, no matter how they may be deserved under your system. Indeed most of us during our stay do try to contribute to our host nation, through a myriad of church and community groups.

Perhaps Mr. Cameron should pay a visit to our beautiful country, where he will find one legged folk to be pretty rare, but where artists and performers are of exceptional quality even without the support of the British Arts Council.


Denis Serebriakovas"

Touche, Mr. Cameron...

Friday, October 26, 2007

The Political Class

I don't usually connect to Iain Dale, but I did find his interview with Peter Oborne extremely interesting.

The emergence of a political class is something that has left me profoundly uneasy.

Thomas Sowell's book, The Vision of the Anointed also, albeit from an explicitly right wing American point of view, evaluates the political effect of the clannishness of "liberal" politics- with the subsequent advent of American neo-conservatism, it seems appropriate to apply his strictures across the political spectrum.

I will write further on this, but watching Peter Oborne was a breath of fresh air.

Constitutional reform is an urgent issue, not a theoretical one.

Thursday, October 25, 2007

Serious Money

Senior Officials from the Fed are now saying that the losses in the US sub-prime market are already over $ 200 billion. There is the expectation that the losses will grow to the half a trillion dollar mark. The write-offs at individual Wall St firms are gigantic: Merrill Lynch announced losses of $7.9 billion yesterday. Bank of America saw a 93% fall in Investment Banking earnings, as they were forced to take over $2 billion in charges. What should really scare people is that as far as the US policymakers are concerned, the biggest losses are probably not in the United States. Nothing is clear, but European baanks may be sitting on losses that are even larger.

Meanwhile, the costs to the United States of the Iraq and Afghan wars are becoming a little clearer. The latest estimate is that by the time the hapless George Bush leaves office, in January 2009, the direct costs alone will have exceeded $ 1 trillion. The indirect costs remain opaque.

After the pasting in the credit market, American house prices have fallen dramatically. The emerging housing recession is only just beginning to have an impact on the US Consumer. Although the FOMC seems likely to call for a further rate cut, they now have to tread a fine line in order to avoid a complete collapse in confidence in the US Dollar- with a concomitant fall in global confidence. The short-run outlook for US Equities seems pretty bearish, and with a simultaneous crisis in credit and housing, the outlook is increasingly pointing to a full blown US recession.

Europe can not take much satisfaction from this, as it loses its US export markets and finds American goods globally more competitive. The strong links between the American and British financial markets are already showing up in lay-offs in the City of London. With continued losses emerging across the global financial system, London seems set to be hit hard. The consequences for the already overstretched UK housing market hardly need to be spelled out. At an historic average house price to average earnings ratio of above five, it seems clear that at least some of the US problems will come to the UK, despite the structural shortage of supply in the south east, which is the result of the nationalised planning regime.

Those that hope for China to take on the role of the United States as the locomotive for global growth do not take into account the export stance of the country, nor the extremely inefficient nature of the Chinese credit market. Chinese state banks, in particular, are thought to sitting on substantial bad loans in the local market, in addition to whatever exposure that they may have to the US sub-prime losses. Although the Chinese economy has continued to grow at a spectacular pace- now closing in on Germany as the worlds third largest economy, inflation is also growing, and the signs of overheating, as the result of a too lax monetary policy, are now increasingly plain. Meanwhile, despite the dramatic flight of the rural population to the cities, the demographics of the country will begin to tighten within the next five years, as the population actually starts to fall from its current peak of 1.3 billion people.

The emerging crisis in the United States is creating pressures across the global financial system, it is increasingly unlikely that an orderly handover of the growth baton can in fact take place. In other words we are coming to a major inflexion point in the global markets.

Over the past 15 years policy makers thought that they had ended the cycle: "an end to boom and bust" was the confident slogan of the Labour party. In fact we have just had an exceptionally long boom, fueled in part by excess liquidity in the US as the result of loose money and the resultant consumer boom (mitigated by the periodic collapse of speculative assets: Emerging Markets in 1997-1998, Tech stocks in 2001 and now housing).
We have unstable and tight markets in energy, especially oil. We have historic peaks in commodity prices, as we enter the peak of the cycle. We have an increasingly tight market for food, as nearly 30% of US corn production goes to ethanol and not to food.

However, after the long fat years, the cycle is inevitably reaching a peak and the increasing inefficiencies across the global market point to a substantial period of adjustment, while these distortions work their way out of the system.

In short we can expect an equity crash and a prolonged slow down in global economic growth.

Hold on to your hat- it is going to be an exceptionally volatile ride- the slightest event, such as the overdue Kanto earthquake in Japan could trigger major global market instability. As a board member of a mojor investment house said last week: its dangerous out there, I am seriously thinking that canned food and shotguns might be good invesments.

The political impact of the crisis is totally unpredictable, but I think we should certainly pay a special tribute to the 43rd President, George W. Bush: the man who seems certainly to have taken the title of the "worst President in American history" from the hapless President Harding.

Wednesday, October 24, 2007

Putin's self defeating ordinance

I see that Vladimir Putin has decided to impose food price controls.

Not only will it not work, it will start to distort the rest of the Russian economy- the emergence of a Soviet style black market is one real possibility, the other is increased smuggling as producers naturally seek a better market price overseas (and try to avoid the excess tariff).

This political meddling in the most basic market will cause more problems than it solves. It also warns us that the gains of globalisation are fragile.

On the other hand, with such economic illiteracy prevailing in the Kremlin, it probably reduces significantly the potential strategic threat of Russia to the West. After all, it was the economic suicide of Soviet Communism that allowed the West to prevail in the cold war, despite the many strategic advantages that the USSR was deemed to possess.

Tuesday, October 23, 2007

Top 100 Most Influential Liberals

Stephen Tall has started an interesting thread over at Lib Dem voice:

Who are the most influential Liberals in the UK?

Well, I can certainly make a case for many individuals, but I am interested to hear what other people think (Omissions or errors are my own and these are people who are British and are either open supporters of the Liberal Democrats or are thought to support the party (some may be controversial... :-) ).

HM The Queen
Nick Clegg MP/Chris Huhne MP
Vince Cable MP
Graham Watson MEP, Leader of ALDE
Lord Rennard- Chief Executive of the Liberal Democrats
Sir Menzies Campbell QC MP
Amartya Sen- Winner of the Nobel Prize for Economics
Lord Ashdown of Norton sub Hambdon- former High Rep to Bosnia and Party Leader
Simon Hughes MP
Martin Wolf- Respected Economist and journalist
Richard Dawkins- Militant Atheist
Shami Chakraborty- Head of Liberty (formerly NCCL)
Adair Turner- (former Head CBI)
Charles Kennedy MP
David Laws MP
Lord Steel of Aikwood
Lady Williams of Crosby
Lord Navnit Dholakia
Lembit Opik MP
Nicol Stephen MSP
Edward Davey MP
Paul Marshall- Founder Centre Forum, co editor, The Orange Book
Norman Baker MP
Malcolm Bruce MP- Mentor to many in the new generation & 2nd longest serving Lib Dem MP
Professor Steve Webb MP
Paul Burstow MP- Chief Whip
Lord Avebury- veteran human rights campaigner & victor of Orpington
Norman Lamb MP
Lynne Featherstone MP
Danny Alexander MP
Dr Evan Harris MP
David Heath MP
Lord Carlile- Government Legal Advisor
Lord Tom McNally
Alastair Carmichael MP
Lord Lester- Legal Campaigner
Lord Tim Razzall
Susan Kramer MP
Jo Swinson MP
Lord Wallace of Saltaire- academic and foreign affairs specialist
Lord Alliance- business tycoon
Julia Goldsworthy MP
Roger Williams MP
Lady Neuberger- Progressive Rabbi
Nick Harvey MP
Don Foster MP
Edward Lucas- The Economist journalist
Jeremy Browne MP
Lord Vallance- former CEO of BT
Lord Clement Jones- Party Treasurer
Alan Beith MP
Eamon Butler- CEO, The Adam Smith Institute
Sir Robert Smith Bt MP
Tavish Scott MSP
Mike Rumbles MSP
Ross Finnie MSP
Nick Harvey MP
Saj Karim MEP
Brian Paddick
Iain Smith MSP
Lord Paul Tyler
Mike German AM
Jonathan Calder- Columnist and blogger
Peter Black AM
Lord Tope AM
Baroness Ludford MEP
Lord Tony Greaves
Baroness Jane Bonham-Carter
Baroness Joan Walmsley
Tessa Munt- Member of the Federal Executive
Baroness Scott of Needham Market
Baroness Emma Nicolson MEP
Bill Newton Dunn MEP
Elspeth Attwooll MEP
Lord Robert Maclennan of Rogart
David Walter- Author
Lord Hugh Dykes
Lord Richard Holme of Cheltenham
Roy Thomson- Scottish stalwart and member of the Federal Executive
Baroness Jenny Tonge
Lord Dominic Addington
Sandi Toksvig- comic
Stephen Tall
Baroness Kishawer Falkner of Margravinie
Craig Harrow- Scottish Campaigner
Serena Tierney- Campaigner
Liz Lynne MEP
Baroness Ray Michie of Gallanach
Lord Robin Teverson- former MEP
Baroness Diana Maddock
Lord Rupert Redesdale
Marie Louise Rossi- Co-founder The Peel Group
Janet Street Porter- Journalist and style commentator
Rosie Boycott- Former editor, The Independent
Lib Dem bloggers
John Hemming MP
Jeremy Thorpe- Former Leader
Claire Rayner- Columnist & agony aunt
Gordon Lishman- director of Age Concern.
Chris Davies MEP
Barry Norman- film critic
Andy Kershaw- World music guru
John Cleese- comic and writer
Phillippe Legrain- author and former Britain in Europe economist
Nicolas Parsons- Presenter of Just a Minute

Monday, October 22, 2007

Decisions, Decisions

I am quite upbeat about the choice that faces the Liberal Democrats this leadership election. I am also pleasantly impressed with the choices on offer for the European Parliament candidates list and more provincially,the Mayor and Assembly for London.

Talented, successful, interesting people.

As for the leadership:

Chris Huhne is a successful businessman with a brain. As an economics journalist he was an insightful commentator for The Independent. The way that he set up what has become Fitch IBCA- the rating agency- reveals a clear business brain. He is internationally aware- in addition to having been a MEP, his wife is Greek. He is also thoughtful about the issue of Land tax, which I believe is an area that merits substantial investigation by our policy wonks. Chris has been highly impressive in promoting the green agenda inside the Party and outside.

His downsides? Well, relatively small. Arguably his name Chris Who-he? would probably be the joke of the cartoonists and his slightly grey appearance. The only really substantive issues seem to be that he can be abrasive and appear arrogant, but I do not think that these are necessarily disadvantages in a politician, but Chris is certainly not a "lovable" figure. Some have said that Eastleigh is a tricky seat to defend, but to be honest I think that this is a certain amount of wishful talk from Conservatives. They argue that while Labour would find Huhne more to their taste, Conservatives would not be attracted to Huhne- obvious nonsense but which could become conventional wisdom.

Nick Clegg is a high flying civil servant who came to the Liberal Democrats on a point of principle. He has both a high IQ and a high EQ- and this wins him substantial personal loyalty. He comes from a cosmopolitan and international background- Russian and Dutch family and a a Spanish wife mean Nick famously speaks five languages. As Home affairs spokesman he put forward a genuinely Liberal agenda for immigration in a way that will deliver the best outcome for our country. Though the Express and Mail chose only to focus on the amnesty for some illegals, in fact it was a masterly exposition of principled policy that I particularly applaud.

His downsides? Well, probably and paradoxically, the fact that he is reasonably attractive and relatively young. The cartoonists will probably try to label him as "Cameron lite". The fact that so many figures in the rather sheltered elite of the party have rallied to try to crown him king also makes me slightly uneasy. His constituency is safer, and some have said that he wins in the North but appeals to the South. However, though I will happily take support from any of the other parties, in my opinion, we need to make a stronger effort to increase the gains we make from Labour, while of course continuing our progress against the Tories. Can Clegg deliver?

So, I am genuinely undecided, but impressed with both candidates- indeed delighted.

Nevertheless, I will wait to see the substance from both camps before I commit to either.

"..but how you played the game"

As a Scotland supporter, I know the pain of defeat better than most.

The defeat of English footballers in Russia was not pleasant (Even for me- Russia is one of the few countries where I would happily cheer on England).

The likely defeat of the Red Rose in Rugby inevitably followed- and of course, naturally the players were disappointed to fall at the last rung of the ladder they had climbed.

The reaction of some England supporters was not pleasant- and that of the press even worse. At the end of the day, the virtues of sport are not always in the winning.

Likewise the failure of Lewis Hamilton to win the Grand Prix World drivers championship in his rookie year has been greeted with screeds of maudlin drivel from the press.

So instead of a quiet pride in the achievements of the underdog English Rugby team, and the Rookie driver, there is a palpable sense of anger and frustration in England this morning- this is not what sport should be about at all: it is ugly and wrong.

Must all the Corinthian virtues of Rugby Union be sacrificed on the alter of greed, commercialism and the idea that winning in sport is everything and losing is nothing. What happened to the sense of respect and fair play that motivated the founders of the sport?

It is not a healthy society where couch potato supporters feel defeat more keenly than the committed, disciplined players, who really understand the virtues of their sport.

PS ...and don't get me started on the petulant way that several French players refused to play in the bronze medal match: As the Pumas delivered another convincing victory I did at least raise a cheer for their Corinthian spirit...

A Ray of Hope

As the results continue to come in from the Polish elections, two things are already clear:

Firstly that turnout has risen sharply, to 55%- which is the highest since 1989;

Secondly that the country has decisively rejected the ultra-nationalist Samo obrona- Self Defence and the ultra-Conservative Lega Polskich Rodzin- the League of Polish Families. Even more crucially, despite the benefit that the ruling PiS- Law and Justice- have gained from the demise of their erstwhile allies, it is the Liberal opposition, Platforma Obwytelska that has stormed to victory.

The Liberals were supported by the young generation of Poles, who found the backward looking pugnaciousness of Prime Minister Jaroslaw Kaczynski extremely difficult to take.

The fact that the outgoing Prime Minister is the twin of the surviving President, Lech Kaczynski, will undoubtedly make life difficult for the incoming Prime Minister, Donald Tusk. However the scale of the victory of Civic Platform is so large that Mr. Tusk can claim a real moral mandate.

Although the proto-Putinism of the Kaczynskis has now been completely rejected by the Polish electorate, particularly the younger generation. The atmosphere in the country was likened to 1989 by one well placed friend of mine:

"It is", he said, "a ray of hope".

Thursday, October 18, 2007

Be careful what you wish for

Many Conservatives were saying to me over the past few months that with a different leader they could see the Liberal Democrats returning to contention in British politics. Indeed many of said that they could easily support the Lib Dems, "if only you had a X as leader instead".

Several have mentioned Nick Clegg or Chris Huhne as being potentially a far greater threat to Cameron than Ming Campbell. Of course they did not think that Ming would leave the leadership so soon- any more than I did.

The media has led a pretty unpleasant campaign to denigrate Ming Campbell as "too old" or "too weak". At Brighton, although the party was quite happy with Ming as its leader, the fact is that in every single one of 74 interviews Ming was asked about his age by the press and broadcast media. In the end, in the face of this extraordinarily heavy fire, the poll ratings of the Liberal Democrats began to be hurt. In the end, as a true and loyal Liberal Democrat, Ming decided to stand down, when it became obvious that the problem of the media was not going to go away.

Now the media is suggesting that this was some kind of brutal party assassination. It was not, it was simply a reflection that the attacks that the media were themselves making on the leader were not going to stop, no matter what, and Ming was unwilling to face what is likely to be another 2 years of this. Having overcome a serious cancer, Ming Campbell did not need these personal and hurtful attacks to continue. So the vile gloating from some quarters-in the press and in other parties-that the Lib Dems are the new "nasty" party is very wide of the mark indeed it is pretty hypocritical.

Now it seems likely that the race for the new leader will be between Chris Huhne and Nick Clegg. Although Nick clearly has the advantage, the fact is that either would be good leaders and would terrify the other parties. Chris is a brilliantly successful businessman and economist, with strong ties to finance. Nick has a track record as a high flying civil servant. Both are cosmopolitan multi-lingual and highly intelligent.

The enemies of the party have now switched tack. Clegg, they say is just "Cameron lite", while Chris Huhne is "the assassin of Ming Campbell".

Nice try guys!

The reality is that with Clegg, you get a real principled Liberal (as opposed to an unprincipled "Liberal Conservative") who happens to be a good communicator as well. With Huhne you get a highly intelligent and forensic debater who understands economics and finance in a way that no one on the other parties' front benches can even aspire to.

Even amongst the Lib Dem front bench which bristles with well rounded, well educated figures, from Dr. Vince Cable, David Laws, and Edward Davey to Professor Webb, and Dr. Evan Harris, these two are exceptional.

Those that looked on the Lib Dems with a certain amount of schadenfreude will now face a serious challenge- whoever take the reins at Cowley Street is going to be a good communicator, with a track record of success and a substantial personal hinterland.

Our opponents may now be crying crocodile tears over the demise of Ming- they will be weeping real tears when the re-energised Liberal Democrats start to bring the battle for freedom firmly back onto the political agenda, and the authoritarian statists of blue and red are forced to explain themselves.

Wednesday, October 17, 2007

Alternative Futures II : The United States

The United States remains the key economic and political player on the Planet. Nevertheless, we can see a series of changes that, if continued, could have very profound effects. In some senses the United States seems almost caught in a perfect storm: the economic, political and military preponderance that the end of the cold war seemed to have allowed to the US was challenged within a very short period.

The dramatic economic growth of China, coupled with a drive for ever greater military and technological strength has already eroded the American military advantage. However the relationship between the largest country and the largest economy has been linked by the relentless purchase of American securities by Chinese institutions. However, repeated bubbles have failed to increase the economic efficiency of the America, and the consequence has been that cheaper money merely fuelled a consumer credit boom. One of the most dramatic changes in the global economy over the past 30 years is the switch from the United States being the world's creditor to becoming the world's largest debtor.

The consumer bubble was masked by the erroneous idea that housing was a true asset - since the price of property detached from any potential economic yield, the busting of the US housing market, as a result of the sub-prime crisis has created extremely challenging conditions for the US consumer, with a sharp fall in the price of loan collateral- houses- leading to a massive growth in loan defaults. Now, the bursting of the housing bubble has created a series of large outflows from US securities, with over $52 billion being sold by Asian investors in August 2007 alone. The gradual drift in the price of the Dollar is leading to something more sinister: the repeated rise of the price of oil in US Dollar terms- now hitting a new record of $87 a bbl. This is sinister in that in non US$ terms, the price is stable. Commodities are decoupling from the US$ as a reserve currency.

So there is now a very real threat that the US could enter a deep recession, with the Fed either unable to stabilise the Dollar against global commodities prices or forced to raise rates to the point where domestic economic activity is shut down.

Partly this reflects a breakdown in confidence in the US political system. It is hard to argue that the USA has an open political system when the President is the son of a previous President, while the leading contender to replace him is the wife of a different previous President. Meanwhile the reputation of the Congress is extremely low. the combination of pork barrel politics and a gerrymandered electorate seems to have created a political system that neither engages nor attracts the citizen. Although Paul Kennedy, in the Rise and Fall of the Great Powers, speaks of "Imperial overstretch"- briefly overspending on military power, as a prime cause of political decline- the relative economic decline of the US is obvious. In a sense we can draw parallels between the US and the Roman Republic, from where much of the language of American politics is drawn from ("The Senate"). The dominance of a narrow power elite proves to be too inflexible to cope with the problems that face the Republic.

The challenge that the US faced from Al-Qaida has provoked a series of major miscalculations by the power elite. The flawed decision to invade Iraq, while still engaged in Afghanistan, has cost the United States massively: politically, militarily, financially and also, perhaps especially, morally. The disgrace of Guantanamo Bay and Abu Graib is an indictment even to those who regard the United States as a benign, non hegemonic power.

So my fear is that the state that was in the vanguard of liberal and democratic values in the twentieth century now faces severe challenges, and even- to a degree- an existential threat. The relative position of the US has weakened and the challengers- primarily China, but to a much lesser degree Russia, truly are hegemonic, anti-liberal, and indeed tyrannical states.

Yet as I shall point out in later blogs, the threat to global stability is not merely from a weaker United States. The US has much structural flexibility and were it to embrace genuine economic and especially political reform, there would still be much to hope for.

The imponderable, is whether Americans are aware of their predicament, and if they are able to address it.

Alternative Futures I Introduction

As any student of the ideas of Nassim Nicolas Taleb would know, the idea that we can accurately predict the future is laughable. Randomness is built in to the structure of the Universe, and certainly into the structure of society. This is not to say that we have no data about how some effects may come from specific causes. However, any prediction must be tenuous and solely made in broadest outline- the more detailed a forecast, the more inaccurate it tends to be. In addition, most systems, even on a planetary scale, are open- so that, for example an ill-timed asteroid could render all forecasts at any but the most macro scale completely irrelevant.

Nevertheless, futurology can be at least interesting- if not truly informative- provided that you accept that, in Peter Snow's words; "it's just a bit of fun". The truth is, most assuredly, not "out there".

So, accepting all of the limitations that I describe, and at some risk of being drummed out of the Taleb fan club, let us think not so much about how the future might turn out, but what the implications might be, based on current events and trends. Although I shall be expressing myself in my usual opinionated way, in this new series of "crystal ball blogs" the reader should not take anything as being a particular definite statement, but something rather more tentative- a set of fears or hopes depending on the circumstances.

These necessary disclaimers having been made, I can now express a series of ideas that are giving me some cause for disquiet. There seem to be a series of global macro patterns that have the potential to change the reality and the perceptions of global power.

Tuesday, October 16, 2007

Setting out a Liberal Future

I wrote in June about the challenges that faced Ming Campbell in renewing the Liberal Democrats. Those challenges will not be less under a new leader. In fact, although the media circus has painted the leadership in the blackest terms, Ming Campbell has many substantial achievements under his belt. He has renewed much of the organisational side, and most importantly he created a more open and collegiate leadership style. Whichever leader now emerges ought to continue those positive developments.

Sir Ming is a transparently decent and honest figure- and his competitive streak is for the pursuit of Liberalism and the success of the Liberal Democrats. I hope and believe that he will continue to put his immense talents and experience to the service of the party.

Ming Campbell deserves all the credit, for putting the party and its principles first.

Now, however, we must work out how the political battle must be rejoined.

From the beginning of his leadership David Cameron has tried to "put his tanks on our lawn" by insisting, not particularly credibly, that he is a new kind of Conservative- indeed a "Liberal" Conservative. In fact, as I have written here many times, he is intellectually incoherent, and this can only lead to an inconsistent "liberalism", at best- and at worst, sophistry and dishonesty.

The challenge for the new leadership must be to maintain the rigour of the liberal agenda, while at the same time communicating in clear and simple terms the essence to the electorate. It is a question of conveying the message of Liberalism.

Until we know who is standing for the leadership, I will keep my thoughts to myself- I am open minded about the strengths of any of the potential leadership candidates. However, the challenge of intellectual honesty, based on firm principles is one that no leader of the Liberal Democrats can afford to duck.

At a time of spin and "triangulation" the Liberal Democrats now have a chance to put forward our nuanced and thoughtful policy agenda.

Let battle commence- and with relish let us return to the fray, with a new leader, and a renewed and restored party. There is all to play for.

Monday, October 15, 2007

So much to blog...so little time

As a new week begins, I see many things that I ought to be writing a bit about- I have begun to draft a list of the top 100 most influential Liberal Democrats- but now realise why Iain Dale gets paid (some) money to do these lists: though will try to get that particular story out before too long.

Meanwhile there have been a series of potential international crises that paint a very worrying picture for future global economic security. Although Ambrose Evans Pritchard's "We're all doomed" pieces can make him seem like the boy who cried wolf, there is no doubt that financial tensions, reflected in the UK with the run on Northern Rock, can have a critical effect on confidence.

At times I have wondered if we are in fact in 1928- with a systemic economic crisis upon us. The risks are not negligible and with both Chinese and Russian anti-Liberalism roaring compared to America, where the shock of failure in Iraq and the political constipation that the choice of Hilary Clinton seems to imply for the American political system, do not bode well for the future.

Meanwhile I have rediscovered Gordon Lightfoot- what a great singer... and how cool is it that Canada made him a Senator?

All these subjects I hope to cover when normal blogging is resumed shortly.

Wednesday, October 03, 2007

400 Not Out

In the nearly two years since this blog first became a regular feature I have, slightly to my surprise, put up 400 different entries. They cover a lot of ground, although I notice certain themes coming back quite consistently: the future of politics, the need for both economic and social Liberalism, the threats in the international system.

Sometimes the entries are written on the run and doubtless many could benefit from tighter editing.

I think I am finding a consistent voice for myself: sceptical, thoughtful -I hope- and increasingly committed to an integrated view of political freedom.

I will be travelling to Belgrade over the next couple of days, and then going back to Aberdeen, where I look forward to seeing friends and family. As a result blogging may be a little sparse for a while.

I have just read through David Cameron's speech- and I notice that another theme is becoming considerable scepticism about the Conservative Party and especially its leader. I was slightly nettled by one comment he made in what I felt was a rather pedestrian speech. Cameron sought to claim that the Conservatives had always been on the side of the dissidents and opponents of Communism in Central Europe during the cold war. Well, there certainly were many honourable Conservatives who were unflinching in their support- like Stefan Terlezki- but by no means all Tories recognised the moral battle of the Cold War.

In 1983, my school persuaded my to apply to Peterhouse, Cambridge- unknown to me a hotbed of support for the radical right: Michael Portillo in his most unreconstructed form was very much the archetype of the college. As I was interviewed by the admissions tutor- a slightly effete don with a mild drawl and Portillo's own tutor- it became clear that I was a supporter of the eastern European dissidents and also a member of the Liberal Party. The parting witticism: "With your support for Baltic independence and the Liberals, we think you might be too addicted to lost causes" reflected the arrogance of the Conservative Party at its worst.

As Cameron- a man with a similar drawl- claimed the credit for things of which he was not a part of and indeed knew very little about, I felt my gorge rise. I hope that there is indeed an election: I am confident enough in the strength of my own party and more than a little eager to see the departure of yet another Conservative leader.

Tuesday, October 02, 2007

Internationalism and the Individual

Bishop Hill is a blogger who I kind of like, even when I disagree with him, because although sometimes his analysis is slightly eccentric, it is usually trenchant.

However one rant recently did catch my eye recently on Internationalism.

Following up on a blogger debate between Tristan Mills and the Nameless One at Devils Kitchen , the Bishop argues that because Liberal Democrats say they are Internationalist, they are in favour of World Government.

"Hard as it is to believe, internationalism embodies a belief that we need more government. That if we can just come up with some political structure to agree the correct course of action, out problems will be over. No matter that some of us might disagree with the chosen course - in a world of superstates it's hard or sometimes impossible to vote with your feet. We will be forced to go along with what our political masters decree.

It's not that internationalism is hard to reconcile with individualism. Internationalism is individualism's antithesis."

Now there is a major error of logic here. It suggests that "all Internationalists are in favour of World Government"- which is not in fact true. A subset of Internationalists may well be in favour of this pretty hypothetical possibility, just as several million people still believe that Esperanto is the next global language. However that is certainly not what Liberal Democrats mean when we talk about Internationalism.

October 2nd is the anniversary of the adoption of the Geneva Protocol , an agreement made by most of states of the world not to use chemical weapons. Given that my Great-grandfather was gassed at Ypres and died before the Protocol was signed, I do feel a certain involvement here. This was not an act of legislation by a global government, it was treaty between sovereign states.

It has generally been followed, with Saddam Hussein's use of gas in the war with Iran a major exception and of course the key factor in the idea that "WMDs" would indeed be found in Iraq. Iraq had signed the protocol in 1931, but they broke their word when they used gas against Iran, which had also signed the protocol in 1929.

To be Internationalist is not to advocate world government; it is to accept that treaty obligations are binding, even on sovereign states. This is why Liberal Democrats opposed the war in Iraq, because we had not completed the procedures that would have allowed the United Nations to sanction the invasion under the provisions of the United Nations charter . A further United Nations resolution was still required, and was not obtained, or even requested. This was a clear breach of our obligations to comply with the United Nations charter that we had freely signed in 1946. As has been shown all too clearly since, the war was ill-conceived from the start, and the failure to gain UN approval demonstrated how miscast the project was ab initio.

The failure of Iraq to comply with its obligations under the Geneva Protocol was a substantial part of why a war was launched against them, the failure of the United States-led coalition to gain UN sanction for invasion was a mistake with continuing ramifications.

The point is that the UK should only sign treaties that it intends to keep, but that the UK regards treaty commitments as fully binding- notwithstanding any short term advantage in bending the rules. A state that can not be trusted to keep its word internationally can not be trusted to keep its contract with its own citizens either. So Bishop Hill is wrong- and it demonstrates the dangers of relying too much on Wikipedia.

Internationalism, by setting limits to the freedom of action of the state, is very much part of the individualist agenda of modern Liberalism.

Monday, October 01, 2007

A warning from Russian History

Vladimir Putin suggests that he will stay in power as Prime Minister of the Russian Federation.

Perhaps it is true. Indeed he has escaped the legacy of the Soviets and is looking back further to another era of Russian History.

However, I am reminded that one description of the Czarist system was:

"Autocracy, mitigated by Assassination".

An interesting form of Russian roulette from the out-going President.

Gold Bugs

Although Ambrose Evans-Pritchard is an avowed Europhobe, and will tag on to almost anything he writes a message of doom for the Euro, I found his article in today's Telegraph very interesting.

I am not an economist that argues that the only real store of value is in precious metal, indeed I don't believe it and have often found those who advocate a return to the gold standard to be rather swivel eyed and fanatical.

The root of the disagreement depends on a view on inflation. "Hard fiat money" advocates believe that inflation is always and everywhere a destroyer of wealth. Yet, a certain low level of inflation is a lubricant for economic growth. zero inflation or deflation is almost always a sign of profound economic problems.

Nevertheless the idea that Evans-Pritchard puts forward- that the Dollar collapse could trigger what he calls "competitive devaluations" is a real threat. Essentially his view is the US Fed is seems to be trying to head off recession by exporting the problem overseas, and especially to the Euro zone.

My view is that Ben Bernanke can not pull off the difficult tightrope walk that will avoid a US recession, and by trying to reflate, he will simply inflate, thus leading to a further Dollar fall. I share Evans-Pritchard's view that the risk is ultimately more from uncontrolled inflation, if the the Fed actually adopts the policies that he suggests they will.

Better for the US to take the short run pain of even a deep recession than to destroy the Dollar as the reserve currency. Yet the market for gold suggests that no one believes that this will happen. The rocketing of the price of golds is a measure of the global fear in financial markets- a fear that may persist for some time. However I do not believe that this represents a victory for the hard fiat money advocates and were we to follow their prescriptions then any recession would risk becoming a global depression, with incalculable consequences.