Thursday, December 23, 2010

Journalistic ethics? Not at the Telegraph

After my comments yesterday about the determined attack on the Liberal Democrats coming from the right just as much as from the left, the scale of the moral rot at the Daily Telegraph becomes a little more shocking every day.

After the theft of confidential information which exploded the MPs expenses scandal- which was illegal, but where prosecution was not undertaken, because the story was deemed to be in the public interest- the Telegraph got two of its associates to pose as constituents in order to gain private comments from Vince Cable about the coalition.

It now appears that the newspaper then tried to suppress the most incendiary comments- about Rupert Murdoch- because the views that Dr. Cable was expressing were in the commercial interests of the Barclay brothers- the secretive tax exile proprietors of... the Daily Telegraph.

OK, so Robert Peston then leaked the real story, but it seems pretty clear that the Telegraph should be facing some very real questions about their own journalistic ethics. The Independent explains the whole story here.

If journalists are going to use underhand methods to gain a story, they are already sailing close to the wind. The Telegraph has- it seems now- quite clearly crossed a line. The Press Council should now be taking a look at this- the Telegraph has thrown quite enough mud gained in highly questionable ways over the last year- it is time that they were called to account.

Wednesday, December 22, 2010

Calling the Lib Dems to order.

The Daily Telegraph, as a right wing Conservative newspaper, has shown no loyalty to the coalition. Their columnists, from Simon Heffer, to the increasingly foam flecked Ambrose Evans Pritchard preach a gospel of right wing cant that is definitely at odds with the more forgiving ethos of Coalition politics.

The fact is that as much as in the Labour Party, there are many Conservatives who are bitterly opposed to the idea of political partnership- so it is no surprise that the Telegraph launched a sting against Vince Cable. He fell into the trap- foolishly- and has paid the severe political price of public humiliation. However the question is cui bono?

As the opinion polls show a slight but widening lead for the YES vote in the AV referendum next year, I fear that there will be ever further dirty tricks played against the liberal Democrats in order to derail the process and even destroy the coalition itself. Unless the Lib Dems can get PR for a newly elected Lords and at least AV for the Commons, then the coalition will not be worth it and the huge political bravery that Nick Clegg has demonstrated will come to naught.

The Parliamentary party will need to demonstrate greater political maturity than Vince Cable did last week.

We should be in no doubt that our party is in the firing line, not just from the dinosaurs of the Marxist Left but also from the hard faced men of the Tory right. This is a very rough political game indeed, and it is critical at the highest level that discipline is maintained. The greatest prizes are still within our grasp. If we get there, we can make good the Liberal vision for our country. If we fail, our party will be eclipsed, as so many -on the right as well as the left- wish it to be. After the bruising baptism of fire endured by Liberal Democrats over the past three months, this Christmas is an opportunity to recuperate and steady ourselves for a battle in 2011 that will be even tougher than it was in 2010.

Tuesday, December 21, 2010

The price of infrastructure- both physical and social

It is something of a disappointment to note that the proposed HS-2 rail link will now not be linked to Heathrow. Any such link is now set to be delayed until the 2030s. So London will have a substantially weaker transport system than Paris for several decades into the future. A weaker infrastructure reduces competitiveness, and as we are seeing this week cutting corners - for example on snow cleaning equipment- eventually ends up costing far more money than it saves.

Yet that has been the British way now for several decades.

"Make do and mend" might have been a good slogan for the Second World War, it is not good enough in a world where China is building, in a single year, more highway than Britain has done in 30 years. Yet the root of the apparently necessary cost cutting on physical infrastructure remains the astonishing damage that Labour inflicted on the British social infrastructure. The imposition of absurd health and safety legislation combined with the diktat of an over mighty state has dramatically reduced the capacity of Society to handle crisis. Once upon a time voluntary associations like the WRVS could be relied upon to store blankets and tea urns- that staple of British togetherness- to use on occasions where, for example, large numbers of motorists got trapped in the snow.

It was precisely these organisations- WRVS, St Johns Ambulance, and so on- that provided respite in emergencies that were most damaged by Labour's arrogant view that the "State knows best". Now the flexibility is gone - and despite David Cameron's ambitions to resurrect these groups through "The Big Society", I am sceptical that these groups can be restored once they are lost.

The social infrastructure has been eroded by wider trends- the need for couples to have both incomes in order to afford a home, the increasing pressure of an affluent society where the most expensive thing is time. The increasing abuse that such volunteers face in places like hospitals where a Saturday night turns emergency rooms into a drunken parody of a field station on the Somme. All of this is driving people even further away from volunteering. The problem is that in a typically British way the country has botched its reforms. The cost of turning volunteers into professionals is beyond us, but the volunteers have now gone. The result is a poorer and nastier society.

Meanwhile even the most basic and necessary improvements to our physical infrastructure are delayed by a Stalinist planning procedure that nevertheless gives every barrack room lawyer their say. Big projects are delayed by endless wrangling that does not alter the final decision much- but does delay it by years or even decades. The abdication of the authority of politicians to the bureaucratic planning process is a prime example of political cowardice and a major failure of leadership.

So amid an increasingly failing social infrastructure- where the discourse is shrill and often ignorant as people take their cue from the no-nothing press- the frustration of working with decayed and under-invested physical infrastructure only adds to the sense of baffled anger that seems the prime characteristic of the UK today.

I fear the hopes of the Prime Minister of repairing the Social infrastructure through rebuilding the "Big Society" are doomed. It is very easy to turn an aquarium into fish soup, it is very difficult to reverse the process. The price of all this is that our physical infrastructure may end up going the same way.

Monday, December 20, 2010

The Unions give in to temptation

It may be that the riots of last week are encouraging the British Trade Unions into making a major miscalculation. Len McCluskey, the leader of the largest Union, Unite, writes in the Guardian today suggesting that the Unions should be getting ready to "do battle" with the Coalition government. He praises the "magnificent Students"- in short he falls into just about every elephant trap that the Coalition would wish him to.

Since 1979, Unions have been a declining and often unpopular force in Britain. Anyone who can remember the 1970s, remembers the endless industrial strife, largely led, we have since discovered, by Communist sympathisers who were even KGB agents, and occasionally directly funded by the Kremlin too. The fall of the wall may have put paid to outside meddling in British industry, but did not get rid of the muscular egos of the far left.

That McCluskey is spouting rubbish is obvious even to his own side- the Guardian editorial is a nice line in pained contempt. I will not therefore make too much of what this maverick has to say. However I would point out the insular and hostile political tribalism of the Unite leader is actually fairly common on the Labour benches too. Indeed the hostility to the Liberal Democrats shown by Labour has been frankly appalling. The hatred and vituperation poured on Nick Clegg's head has been extremely unedifying. Ed Miliband too has been quick to judge and condemn- in a way that is going to make it ever more difficult for the Liberal Democrats to ever work with Labour for a very long period into the future.

As I feared, Labour, by failing to embrace the new politics of cooperation, is retreating to a laager of class war and the old and failed nostrums of the 1960s and 1970s. It is a massive mistake to believe that the actions of a few hooligans presages a major radicalisation of politics- as McCluskey clearly hopes that it does. The vast majority hold the ringleaders of the riots in pretty strong contempt- and identifying with them will mark the Labour leadership out as losers. If Mr. Miliband, elected as leader by Union votes, can not put clear water between himself and these Union hotheads, then his political strategy will lead to disaster. Miliband junior is running out of time - if he can not define himself more clearly and more quickly, then he will be defined as the puppet of the these dinosaurs.


Remember Belarus Today


It was inevitable that the dictator would overstep the mark. He might- maybe- have even won the election without cheating, but that is not the Lukashenka way. Instead, just to make sure, he stuffed ballot boxes, and faked the election result.

Yesterday, in the the frozen December temperature of the longest night, tens of thousands came to the centre of M'iensk to protest. They received the customary response: heavily armed riot police.

Probably Lukashenka will get away with it, after all when Korea looks on the brink of real conflict, what is yet another stolen election in "the last dictatorship in Europe"? Yet the regime. with its Soviet flag and its KGB looks increasingly like a relic from another era.

One day the white-red-white flag will fly again, but what will Belarus have to suffer until it happens?

Only God, or possibly Oleksander Lukashenka himself, can forecast that with any accuracy.

Sunday, December 19, 2010

...in other news

What, on God's green Earth, has got into the British press?

Essentially the news is that Winter is cold and that... oh dear people will have to change their travel plans. Admittedly that is mostly to do with the inadequate preparation by BAA and some slightly questionable decisions by BA.

Does it really deserve this Olympic level whinge?

Britain is becoming a spectacularly miserable place. The whinge factor in the press is about the same as your typical 6 year old- and it adds nothing and achieves nothing. The same nonsense as the Daily Mail's "No to Berlin Time", or "save the Queen's Head on Stamps".

It is not that big a deal. It really isn't.

And snow, even the metres of the stuff here in Tallinn, is actually... quite beautiful.

It is stupid when the system can not cope with winter, which despite the RECORD LOW temperatures, does actually come every year. However the melodrama in the media is frankly rather pathetic.

Grow up, you silly sods, and get a life: go sledging or drink mulled wine or, just accept that these things happen and never mind. Don't turn winter into yet another excuse for yet another miserable witch hunt.

It is not the winter that is horrible, it is the relentlessly negative and nasty, ignorant, arrogant, no nothings who absurdly call themselves reporters these days that are pointless, negative and faintly ludicrous. Since most of you got your jobs through family pulling of strings after you left your fee paying schools, then the least you can do is smile about it .. at least once in while.

Wednesday, December 15, 2010

As Iain Dale steps down, what next for blogging?

Iain Dale has been the Queen Mum of blogging: despite being occasionally acid, even his political foes like him personally and his blog has been innovative and interesting. Although it has been clear that he was losing interest in the blog- far fewer articles in recent weeks- it is still a slight shock to see the end of one of the most popular British political blogs.

Yet in many ways blogs are becoming quite old hat, and the days of a one man political blog, like this one, may be coming to an end. Writing this blog takes time, and it can be a struggle find inspiration and to avoid being repetitious. Yet all the time blog readers are demanding more content, not just more articles but now increasingly video and audio podcast content. I have not had time to learn the skills that would move this blog from being a series of articles into that more developed blogging scene.

I have been content to treat this blog as a bit like a newspaper column, but it seems that the demand is now that blogs become more like a newspaper- and considering the effort and time that this requires, I think that this can not be done on the free economic model that it has run on up until now. The advent of the paywall is providing a new model for the mass news media to use the technology, and to compete in a way they have not done until now. I suspect that after the qualified success of The Times paywall, most of the print media will move to that model over the course of the next year- more and better content, but you pay for it. Meanwhile the number of blogs peaked early last year and has been declining since, and the number of readers may now also be declining- although the readership of this one continues to grow.

So what next for this blog? well, I shall keep it up for a bit, though I expect by the end of 2011, I will either have stopped writing altogether or will have merged this blog with another or will simply write a column on a much bigger blog, like Lib Dem Voice- provided that I have a certain freedom to cover a broad range of topics, in the same way that a newspaper columnist does.

In the interim, I shall continue to bang the drum for the things that I believe in: Hayekian Liberalism, in fact most kinds of Liberalism, the need to oppose tyrannical states, especially the Mafia State in Moscow, the political problems of the UK and occasional general whimsical musings.

I will try to remain reasonably civilised, and will try to avoid the invective that many blogs have used.

Since readership has been growing, and I hope to reach a few readership milestones in the next couple of months it seems fair to continue for a while- after that, we will see.

Monday, December 13, 2010

The Harm of Harriet Harman

Harriet Harman is a fairly typical British Labour politician. She comes from a wealthy, even aristocratic, background and was sent to St. Pauls Girls School- a private school- before studying politics at York University and joining a pressure group. She married a Labour activist- Jack Dromey- who she met on the picket line at Grunwick, but has maintained her feminist credentials in small things, such as retaining her maiden name, but betraying her Socialist credentials in large things: by sending her children to grant maintained and grammar schools, while publicly opposing the access to these institutions by others. So far, so unsurprisingly hypocritical.

As a minister she was reliably wrong on most issues: she supported keeping MPs expenses secret, she supported the Iraq war, she believes that undemocratic quotas are the best way to promote women and sexual minorities- as though they should be treated in the same way. All of this nonsense has been promoted with a straight face as a "fairness agenda". She has had her brushes with the law- speeding, and has been associated with questionable financial dealings concerning her bid for the Labour Deputy Leadership. Her husband's stewardship of Labour Party finances as Party Treasurer has also been attacked.

So far, so mediocre and slightly sleazy.

So what is it about this rather foolish, rather arrogant and rather mediocre politician that annoys so very many people in the UK?

Over the past few weeks we have seen here being abusive and disrespectful of other political figures: calling Danny Alexander a "Ginger Rodent" is not exactly the kind of right-on PC that she demands from other people. We have also seen her demonstrating the sense of entitlement and arrogance that should ultimately eliminate Labour as a political force.

By praising foreign people on benefits who send a proportion of their income back to their home countries to support their families as "heroes", she demonstrates a total ignorance of the justified anger of the British people towards a bloated welfare state that can not support this abuse. Benefits are paid by the taxpayer to provide minimum support for the needy in this country. The British tax payer already supports those in need overseas through the international development aid budget. If we are supporting the "third world" through our benefit system too, then sooner or later the system will collapse. Now, don't get me wrong here, I am perfectly happy for people in the UK to support their families overseas- with money they have earned themselves. However it is profoundly unreasonable to expect the British tax payer to be asked to do the same thing. Labour, however, would not allow foreigners who came to the UK irregularly, to work: they insisted that they should take benefits and not join the workforce.

Only a politician who has no understanding about how money is earned and wealth is created could say something so foolish. As usual, in her invincible ignorance and determined arrogance Harriet Harman shows that her view of the state is that it is a giant Santa Claus that can give every good child, and quite a few of the bad ones, a lot of sweeties whether they deserve them or not, or even whether they need them or not.

It is precisely this view of the state that has eroded British competitiveness and undermined fairness. She is not against discrimination at all- in fact she insists on it, provided it suits her social and political agenda. Her shallow vision of feminism was condemned by Erin Pizzey as a "staggering attack on men and their role in modern life".

Relevant Information: this self-regarding, poisonous, mediocrity is the Deputy Leader of the Labour Party.

Friday, December 10, 2010

Collateral damage from the "Student" riots

The scenes on London last night were a parody of a carnival. The Lords of Misrule who hijacked the student protest and turned it into a riot have totally destroyed the student cause. Attacking the Cenotaph- a particularly low thing to do- setting Parliament Square, and the Trafalgar Square Christmas tree, ablaze, and then attacking the heir to the Throne and his wife in their car.

Oops.

We all know that there are a few hundred anarchists and leftists in the UK who would turn the country into a Pol Pot style murder state if they could, and sure enough these nutters were out in force on the streets of London last night.

However the collateral damage to the student cause is probably terminal. Whatever the rights and wrongs of the tuition fees issue, the students had their cause hijacked by thugs. The poor taste of attacking the statue of Churchill and desecrating the Cenotaph alienates the overwhelming majority in the UK who regard these symbols not as some "Imperialist Relic" but as a living reminder of the price of freedom. The violence on the streets was criminal and those who committed these crimes will now have to face the music.

Yet there is further collateral damage.

If the Liberal Democrats were divided on the issue of student fees, the Labour Party is divided on the issue of the riots themselves. After his message of approval for the last riot, Ed Miliband is now in a very difficult position. Essentially he has failed to condemn the violence of the first demo. Indeed several Labour MPs have now not only failed to condemn the second- more serious- riot, they have sent messages of support.

The trouble is that Miliband is tempted to try to squeeze more political juice from this particular lemon. He thinks reminding the Liberal Democrats and the British people about Lib Dem division on the fees issue plays to his advantage. Yet he can not play politics on this: Labour must condemn outright and completely the violence of last night. Any failure to do so lines them up with the criminals responsible for last nights outrages.

We will soon see if he falls into the trap. If he does, he will condemn his leadership to a lingering death.

Wednesday, December 08, 2010

China, arm twisting and the Nobel prize

As the result of diplomatic pressure, we are told, the Ambassadors of perhaps 50 countries will not attend the award ceremony to give the Nobel peace prize to Liu Xiaobao.

The Chinese are claiming something of a success.

It is all rather disappointing, it means that China lines up with some of the very nastiest regimes on the planet.

China has refused to let any close relative collect the prize, so for the first time since 1935, when the Nazis prevented Carl von Ossietzky from receiving the prize, the ceremony will not, in fact see the prize actually awarded.

That is, in itself a pretty terrible state of affairs. What is even more bitter is the fact that the ideas that Liu Xiabao has been imprisoned for: democracy and pluralism, are actively discussed at the highest level in China- as we know from the recently published memoirs of the late Zhao Ziyang.

The Chinese government is lying to its own people when it says that there is little international support for Mr. Liu. It is lying to itself when it claims that it doesn't matter.

Unless China moves in a more democratic and open direction, it risks all the economic progress that has been made in the last thirty years. It is time that China modernised its politics to match its dynamic economy. Mr Liu recognises this, as do many people inside the Chinese Communist Party itself.

Yet, by making a martyr of a Democrat, the outgoing generation of Chinese leaders is leaving a poisonous legacy to its successors and risks undermining the very legitimacy of the People's Republic.

Tuesday, December 07, 2010

Why Life needs to be fair

Life isn't fair is probably one of the earliest lessons we learn in life. Things don't always work out the way we want or indeed deserve. Yet one of the touchstones for Democracy is that the brightest should at least get a chance to compete with the merely privileged. If there can not be equality of outcome, then at least there should be equality of opportunity.

What happens though, when it becomes increasingly obvious that no matter what your skills, there is and will never be even the pretence of fairness? In the UK now there is a crisis of education, but it is not the crisis that a bunch of articulate, self interested University students would have you believe. The crisis rests in the fact that unless you go to a fee paying, private school- which the English, perversely, call public schools- then your chances of social and economic success are a fraction of the small minority that has attended such schools. In some areas of the media and in the law the proportion of ex-public school educated employees is approaching 90%. Indeed in journalism, it is remarkable the degree to which they are concentrated not merely in certain schools, but even in certain families. This is a very narrow "elite" indeed.

The fact is that the chances of entering certain professions depends on choices that were made not by you, but by your parents. Of course if your parents did not have the money to educate you at the right school, the chances are so low of entering a senior position in law that it is essentially pointless: your chances are less than a tenth of those who were privileged.

What is worse is that the trend is getting worse.

Whereas in the sixties and seventies the Grammar schools were turning out a new generation of leaders, the rise of the comprehensive returned the public school system to the levers of power. Indeed, the political elite is firmly in the hands of the public schools. The days of the "grammar school boy" have clearly gone. now we are accustomed to think of Grammar schools as elitist, but in the 1960s there was considerable bitterness about the way that the public schools lorded it over the state educated even then.

This trend is dangerous.

If it becomes clear to the brightest that they can not hope to achieve their ambitions, then they will come to oppose the society that denies them the opportunity to do so. Social cohesion depends on fairness.

I do not propose to tear down the public school edifice, but it seems to me that access to such schools must be opened up to the very brightest, while at the same time the rest of primary and secondary education needs acquire the access and power that the existing public schools already have. De facto we have selection by wealth- or rather house price- for the best state schools. The time has come to allow wider selection by educational potential. A greater diversity in secondary education can help local schools offer the opportunities that are still- shamefully- the unique purview of the rich.

It is only fair.

Monday, December 06, 2010

Liberal Democrats need to hold their nerve

The general Election of 2010 gave no party what it wanted, All the parties lost, and that was clearly the message that the electorate deliberately sent to the political class. For the Liberal Democrats, the loss was doubly painful, since the party seemed to be at the point of making a breakthrough that could have changed British politics. In the end, the Liberal Democrats made no progress, despite the widely held view that the party and its leader, Nick Clegg, had fought the best campaign. Indeed several losses- and very near misses- were extremely painful. In that sense, the offer of a coalition that came from David Cameron was made to a party that was somewhat demoralised and very disappointed.

Now the media, from Paxman down, can barely utter the word "Coalition" without a sneer. The naked hostility of the left that has been turned on the Liberal Democrats has been a shock. However, we are told, "welcome to politics as normal in the big league". Except it is not politics as normal: the intimidation and violence shown to the Liberal Democrats by the thugs of the extreme left is not politics as normal. It is a national disgrace. No party should be forced to cancel its meetings because of the threats of the left. No party should have to increase security on its M.P.s homes, because they are being attacked by leftist criminals. Verbal abuse on the street is one thing, but dog shit through letter boxes and vandalism is quite another.

So clearly our Parliamentary Party feels physically threatened. It is also true that most of them have great doubts about supporting the Coalition policy on tuition fees. Nevertheless, the fact is that the battle amongst the students will have to wait for the new generation of students who will be at college at the next election. The Leftists and the hypocritical leadership of the NUS are a lost cause for the Liberal Democrats: it now makes no sense to equivocate with them: the party must now rally round and support the policy.

However this is not without a quid-pro-quo from the Conservatives.

The time has now come for the constitutional policies of the Coalition, including PR for the House of Lords and Local Authorities to be embraced fully by the Conservatives. Whatever equivocation many Conservatives feel about the prospect of electoral reform in the Commons, they have definitely signed up for it for the Lords. More to the point, those Tories, like John Major who support the idea of continuing the coalition, must now realise that the acid test will be the referendum on Commons reform next year. If a large number of Tories come out to support the "Yes" vote, then the coalition will become a lost less uncomfortable for the Liberal Democrats.

At the moment the Leftist narrative of "Tory Bastards and unprincipled and weak Lib Dems" is becoming conventional wisdom, even as the very concept of policy in the Labour Party evaporates in a mist of Milband opportunism. It is time for the Lib Dems to accept that the student battle is lost, but that there are and will be more important battles to fight- especially on the constitution. Abstaining on the student fees vote does look weak, and we shouldn't do it.

The party must hold its nerve: the biggest prize of all, real reform of our state, remains within our grasp and we should not be jolted by the thugs and criminals who are our most bitter enemies.

The Coalition is the only game in town: we have to make it work for the benefit of as many Liberal Democrat ideas as we can. We can not get all we wanted, but then we lost the election. We can however make more progress over the next year than over the last 70 years.

It is time to swallow hard, stay united, and keep our eye on the real prize. Despite the thugs, we should remember: we have a responsibility to the country, to our ideas and to our party, and that the thug must not prevail in British Politics.

Friday, December 03, 2010

What's in a [Swiss] name?



The two men at the top are Mr. Vladimir Putin, leader of the Kleptocratic Russian Federation and Mr. Sepp Blatta a one time Swiss Bureaucrat who has destroyed the reputation of FIFA.

The second picture is Blatta Orientalis, the Eastern Cockroach.

I wonder if you can tell them all apart.

Batman and Robin??

I can understand why Vladimir Putin is said to be "upset" that he and Dimitir Medmedev have been referred to as Batman and Robin.

After all the Batman and Robin are the Good Guys!

So, step forward please... The Riddler and The Joker.






World Cup William or why WikiLeaks Weakens Bad Blatter

The day after WikLeaks confirms the fact that Russia is so corrupt that it is impossible to separate the State from Organized Crime, the FIFA executive awards the criminal state the right to hold the World Cup in 2018. At the same time it gives the right to hold the 2022 Cup to Qatar- a state which has temperatures of over 50 degrees Celsius in the Summer months, when the tournament is played.

Frankly It seems to me that of all the great countries that could have held the tournament: Spain/Portugal or England in 2018, the US or Australia in 2022, the elderly bureaucrats of FIFA have chosen the worst options.

Why did they do this?

Frankly- they followed the money. Whether or not the individual voters were personally corrupt- and we know that at least some of them were- the process certainly is corrupt.

FIFA shamelessly followed the money.

Frankly, having taken the money, they should now take the consequences.

Choosing Qatar is daft, choosing Russia is sinister. A lot of questions will now be asked, and frankly they should be.

Humiliation for England - even after throwing Prince William into the fray- may have been expected after the poor press that FIFA received in the UK, but that does not mean that FIFA can now expect things to settle down, indeed the scale of the English humiliation might unleash something of shit storm for Sepp Blatter. After all he has had corruption rumours swirling around him for years. After two exceptionally stupid decisions (well three, if you count bringing forward the 2022 decision), he should not be surprised if he comes under a whole lot more scrutiny.

He may yet find he has a case to answer.

Thursday, December 02, 2010

In Politics it is better to be lucky than clever

The problem for Ed Miliband, after the car crash interview he did on the BBC Today programme last week, is that he is beginning to get a reputation of being an unlucky politician.

The cock-up of a tweet from his spokeswoman: " ''Hypocrisy of Cameron pimping himself out in Zurich..." is precisely the kind of silly unforced error that lucky politicians do not succumb to.

Of course, if in a few minutes, England were to win then Cameron looks like a very lucky politician indeed, while Miliband looks, well, like a loser.

UPDATE: well. I suppose, predictably, England did not get the World Cup, but even that may be lucky, if the FIFA corruption scandal gains any further traction. After all awarding the world cup host nation status to a genuine Kleptocracy does kind of give the game away.

Tuesday, November 30, 2010

The $*%& hits the fan

Today has been extremely bloody in the markets.

In short the collapse in confidence is pushing the Euro towards meltdown. Either a de facto central Treasury is established in the Eurozone or there will be a series of Sovereign defaults, starting with Ireland, but including Greece, Portugal, Spain, and probably Belgium and Italy as well.

If the German constitutional court vetoes German participation in the Treasury, then the Euro will implode and the currency will fail with drastic but at this point unknowable consequences.

The spreading of contagion into the corporate credit market is now pulling emergency measures ever closer.

Estonia is scheduled to join the Euro on January 1st. After today I would say that there is only not much more than about a 60/40 chance that the currency will survive that long, and no more than evens that it survives the first quarter of 2011.

It is that serious.

The Democratic Abdication

The forecasts that were published for the British economy by the newly constituted Office of Budget Responsibility (OBR) yesterday were troubling for two reasons. The first is that the numbers show that the UK is a very long way from having a fiscal structure that can be sustained for the long term. The second, though, is more to do with the existence of the OBR itself.

The OBR was created because the Conservatives in opposition had lost trust in the official Treasury forecasts which seemed to pander to the political agenda of the then Labour government. What this represents is actually quite serious: what had been previously considered politically neutral is now considered politically compromised. As with the interest rate decisions, which have been transferred to the Bank of England, because the MLR decisions of the Treasury were deemed "too political", so budget forecasts have now fallen to an unelected Quango.

In part this transfer could be argued to be technocratic- as the complexity of modern finance has increased, so the ability of laymen to understand it has fallen. Thus, the need for technical experts to take these critical decisions. Yet it also reflects a failure of accountability. The fact is that the electorate have not understood what was going on either, and have not therefore punished those politicians who were deemed to have made decisions in their own short term political interest, as opposed to the longer term national interest.

Yet the electorate HAS smelled a rat: public trust in the political institutions of the UK has been falling steadily for years. Political parties- all of them- are now a pale shadow of their former size. Political engagement has diminished as politics falls to a narrow club of professional activists. After the petty venality revealed by the expenses scandal, public trust in Parliament is at an all time low. Even the announcement of the Royal Wedding has been greeted- outside the public school clique that dominates the media- with not much more than a shrug of indifference from the country at large.

There is a mood of total disenchantment with the entire apparatus of state in the United Kingdom.

The dead tree and cathode ray media may be largely to blame, with their shallow sensational and often sensationally inaccurate reporting. However the new media has not filled the gap either. People may be disenchanted by politics, but in a way they are in the same ignorant boat as the politicians themselves when confronted with the technical difficulties of economic and policy decision making. Few, outside the politically engaged even understand the way that the legal and constitutional framework shapes the policy debate. Frankly, after hearing Ed Miliband's first interview with Today on Radio 4, I am not even sure that the Leader of H.M.'s Official Opposition does either. Posturing Populists are not the best guardians of the delicate apparatus of the Constitution- they are too tempted to bend or break the rules for short term advantage.

So, it seems that Politicians can not be trusted- many would say that this was no surprise. The problems is that the failure of trust and the increasing lack of respect for politics is undermining our entire framework of political freedom. Without the bonds of social trust, then political accountability begins to disappear. When that happens, then the very root of our Democracy is undermined.

The most advanced countries on the Human Development Index, like Denmark, have a greater levels of social trust. Even Estonia, despite the appalling history of Soviet and Nazi occupation, has a greater trust in their government than the UK does. The Estonians regard the government as a limited service provider, and are therefore happy enough to use an ID card system, which they trust, in order for them to gain access to state provided services. The failure of trust in the competence as well as the good intentions of the British government condemns the country to using outdated and expensive information systems, which only undermine government efficiency- from taxes to health care- still further.

At the end of the day, the British political class, isolated from fundamental realities is continuing to lose the trust of the British people- and until confidence in the system can be restored- preferably by a dramatic increase in direct accountability enforced by constitutional reform- then the outlook for the UK continues to be increasingly poor.

The OBR is a symptom of a huge failure of British political accountability- and without greater understanding of the breakdown of the British social contract, the entire political edifice- including the increasingly clueless fourth estate, is headed for the rocks.

Monday, November 29, 2010

Wikileaks

Not much surprising in the leaks of the US diplomatic cables: the fact that Obama doesn't much care for Europe has been obvious since he came into office, and it is also not much news that the Gulf Arabs hate the clerical regime in Iran.

Of course for Brits there is the news that Prince Andrew engaged in "inappropriate behaviour".

However anyone who has met him will know that he can be abrupt beyond the point of rudeness. He has most of his father's faults with none of his redeeming virtues. Mind you you don't need Wikileaks to tell you this, even the most fawning snob columns have asked questions in the past.

So is the Wikileaks expose nothing more than an embarrassment?

On current trends, it may not be. Unless you live in the Middle East, of course.

Why Ed Miliband should lose

The British Lefty commentariat became increasingly less keen on Labour while they were in office. The repeated failure of left wing policies in government (Brown) combined with outrageous hypocrisy (Blair) to reveal to many Labour supporters that their party was at best sanctimonious- at worst dishonest. So the left-sympathising, chattering classes began to look elsewhere. Some went Green, some went Liberal Democrat, most declined to vote.

Now the chattering classes feel a certain relief- they see the Coalition being forced into tough decisions, while Labour has the freedom to try to make itself popular. Indeed there is secret delight that they are back in the 1980s- with the Hated Tories leading cuts, while the Red Flag can be raised at student demos and protests grow with every cut that is announced.

Yet, despite the small lead that Ed Miliband has opened up in the opinion polls, the interview the Labour leader gave to BBC Radio's Today programme on Friday contained the seeds of Labour's future defeat.

Socialism is a dead ideology. Everywhere it has been tried, in whatever form, it has failed. It is wedded to a social model of massed society that no longer exists. This is why New Labour was so tentative about proclaiming itself a Socialist programme. The fact is that the more nebulous word "progressive" was both more inclusive and more accurate. The repudiation of state ownership that was implied by abolishing clause 4, opened up a more pragmatic, consensus building approach which was very successful electorally

Ed Miliband doesn't see it that way. His language is confused- he seeks to speak for "the poor", but when he understands that this is not enough to get elected, he waffles about who the poor actually are: apparently it is all, or at least 90%, of us.

This political confusion is simply naked opportunism: talking about joining students "in peaceful protest" against tuition fees is also pure hypocrisy, when you consider that he was a minister in the government that introduced them.

The solid policy proclamation that he has made is that "I am a Socialist". So he is guided by the demands of state ownership of the means of production? Well it appears that this is true only some of the time, the rest he is guided by the will of the people.

Err... this is not a programme for government, it is intellectual bankruptcy.

As for the left wingers who are queuing up to give the Liberal Democrats a good kicking- David Mitchell is only the latest- we will defend our record on its merits when the time comes. However, if all Labour has to offer in the anti-AV campaign are the tired old retreads like John Prescott and Margaret Beckett, then just maybe we might win the referendum after all. THAT would put the final nail into the political zombie of Socialism.

Under fair votes it is hard to see the uneasy informal coalition of the Labour party being any more stable than the well structured official coalition of Conservatives and Liberal Democrats. Mr. Miliband may rue the day he wore his Socialist heart on his sleeve without understanding the abject failure of Socialist ideology.

Friday, November 26, 2010

Waiting for the Euro default: Write down, Rescue and Restructuring

In the final analysis, why should citizens take the full burden of rescuing banks, while the bond holders take no punishment at all?

That, in essence is why I now expect to see the next step in the Euro crisis being a debt default- or as it will probably be termed, "debt restructuring". The rescue of the Irish banks was really only supposed to be about the depositors- who are generally businesses and individuals in Ireland, not the bond holders who are generally governments and financial institutions from overseas. The sovereign guarantee to the banks that was so thoughtlessly extended by the Irish government has turned into a black hole, and the price is beyond Irish means to pay it. The market understands this, and is increasingly sceptical of the ability even of the ECB and the IMF acting in tandem to secure the position. Since this assistance largely comes in the form of new loans, then essentially Ireland is solving the problem of too much indebtedness... by increasing its indebtedness still further.

No, it is quite clear that bond holders could, indeed probably should, be taking a haircut on their exposure. The market certainly thinks so, which is why they are pushing yields on the most problematic economies up so sharply. These yields are justified when one considers the ever increasing chance of a debt restructuring which will indeed force at least some bondholders to take a haircut, and others will see their paper rescheduled to a longer maturity. That is what the market believes is now most probable.

A default is not the same as the collapse of the Eurozone, which is fraught with danger for any economy that took that step. Indeed the default would be instead of the Eurozone collapse. A country that enters a restructuring process will keep the currency, but inevitably will be forced to borrow at higher rates over the longer term, as bondholders become far more discriminating between Eurozone credits, including Sovereign ones. In the short run this creates further pressure on economies as they incorporate higher borrowing costs into their system, but over time it will encourage the radical restructuring that is still necessary, especially in Portugal, Greece and Spain.

In fact the process of restructuring,would crystallise what is already happening with the ad hoc rescue measures that are being attempted at the moment. The supposedly temporary measures are already been developed into permanent fund, which looks to me very much like the permanent Euro Treasury in embryo that was missing from the Euro equation from the outset. Of course the fact is that the German government will not wish to become the blank cheque for the profligate economies to draw upon, which is why I believe that- more or less whatever happens- there will be significant restructuring/default special measures imposed on creditors.

One way or another the process of painful government retrenchment in the PIIGS is going to have to happen. Better that this takes place within the context of the orderly framework of the Eurozone than in a blizzard of newly re-created national currencies, most of which will have so little confidence behind them that they will be worthless.

Yes, yields will spike in the short term, but since that is already happening now, it is hardly a worse option. In the medium term, the restructuring process brings state finances under control and growth can resume. We can, I think, learn a lesson from the Baltic here. Latvia maintained their peg to the Euro, avoiding a devaluation of the Lats, by a slash and burn budget way beyond what any of the PIIGS are contemplating now. At the same time they have also restructured their position in the rescued Parex Bank group which has involved drastic write-offs. These are write-offs that mostly damaged the Latvian state, which held the equity, but several more "unusual" creditors took the pain as well.

The result is that Latvia has returned to a more normal risk environment, with the local RIGIBOR now trading inside EURIBOR. The crisis in the Baltic is now essentially over. The flexibility of the Baltic model has been proven, and the low levels of debt- in Estonia, negative government debt- provide comfort for the future, as pension funds and investments begin to swell.

The slash and burn tactics of the Baltic are not likely to be politically acceptable in the PIIGS, but a combination of write down, rescue and restructuring may yet help create more competitive economies for the future.

Of course it means that PIIGS borrowing will be more expensive than the more disciplined Balts, but then, that would be the rational free market in action.

It is certainly worth a try.

Wednesday, November 24, 2010

The Bond Market speaks

James Carville, President Clinton's political strategist once famously said "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody."

The European Union is now not only intimidated, it is actively terrified.

The Irish bail-out is breaking down.

The fact is that the blanket guarantee which the Fianna Fail government offered the banking system has bankrupted the country. Even despite a slash-and-burn budget, there is just not enough money to avoid a Sovereign default. The costs of the bail-out are now approaching €100 billion, which is now nearly three quarters of the total Irish GDP. The Irish deficit next year will be over 30%.

Meanwhile Portugal is facing a general strike.

CDS spreads for Ireland, Portugal, Spain and now Belgium are hitting new record highs.

A Sovereign default is now odds-on in the next three months, and the likelihood is that if one state defaults, then three or four or even more countries could go under.

The Great Depression of the 1930s did not start in Europe with the Wall St. Crash, it began with the bankruptcy of Creditanstalt in 1931. I fear that the European Sovereign defaults could be the Creditanstalt moment.

The policy makers are staring down the barrel of a gun. The bond market no longer believes in the ability of the EU states to act in concert to avoid a Euro member state defaulting: there simply is not the fire power to guarantee anything more than the smaller economies, so Greece, Yes; Ireland, Maybe; Portugal, possibly; Spain, very unlikely; Belgium, almost certainly not.

As I repeatedly say on this blog, the crisis is not a currency crisis, it is a structural crisis and only radical structural reform can solve it. The failure, over decades, to tackle the structural sclerosis in most European economies is now forcing a moment of truth.

The UK may have gained a breathing space because it has been able to devalue Sterling, but in fact it faces precisely the same problems. If the crisis takes a further turn for the worse, then the UK may be forced into even more drastic cuts than are currently contemplated by the Coalition. Years of unfunded welfare and pensions, mis-allocation of capital, government waste and extravagance, and the whole litany of missed opportunity and failure to reform, is now coming back to haunt us.

It is going to be a rocky ride over the coming weeks.

Kremlinology

Amidst the unfolding disaster of North Korea, and the market confusion as the ECB contemplates how to cope with sovereign guarantees of Banking black holes, it is easy to overlook the developing crisis in Russia.

Two stories caught my eye over the last twenty four hours. One is in the FT, showing that Russian capital flight is now touching $3 billion a week.

The other story is in the London Evening Standard and is an update on the terrifying story of how the Russian State stole Hermitage Capital from its rightful owners, and then brutally murdered the lawyer who tried to stop it.

What is particularly significant is the owner of the Evening standard is Alexander Lebedev.

As the next Presidential handover in 2012 draws near it is clear that much is happening in Russia.

The country is becoming ever more unstable. Russia remains on the brink, and may be about to take a big step forward.

Tuesday, November 23, 2010

Property, the Banking system and the end game for the Euro

The fundamental problem of Europe is not the Euro.

The fundamental problem is the economic structure of most of the European economies. The standard model of these economies has been to pay for today's bills with cheques drawn against the future. Instead of saving up for things today and acquiring them later, we have chosen to acquire them today and pay for them in the future. To a degree, it has worked: the levels of average prosperity in the present day would stagger most of our forefathers. Yet, there has always been a critical piece of small print: growth needed to continue, and not just economic growth, but population growth too, so that the costs were painless enough for the next generation to carry.

Yet about 40 years ago, the oil shocks created inflation that was not the result of economic collapse or war, but for several years was a normal part of business. In the face of this, real assets, especially property, held their value in real terms, but looked like they were appreciating sharply in nominal terms. Property became more and more popular, and banks began to prefer not only lending to property purchasers, but also lending against property to finance other asset purchases. All the time the central banks, trying to "even out" the cycle, provided excess liquidity in the downturn, while failing to tighten sufficiently in the upturn. Since this helped to erode money as a store of value, property began to look like a one-way bet.

At more or less the same time, we lost sight of another basic issue. People began to retire earlier and earlier, believing that the inflated asset-largely property- values that supported this decision were normal. Even as life expectancy increased into the eighties, people began to stop working in their mid fifties. The time a pension had to cover went from a few years to several decades. The cheques we were drawing against the future grew ever larger.

It was not just in the private sector that saving became a dirty word: States too began to hand out increasingly extravagant welfare packages: for millions of people, it was not economic to work. Skills rotted, and both Western Europe and the USA acquired a burden of the unemployable unemployed who nonetheless made a substantial call on the public purse.

Then over the course of the last decade bankers began to securitise their loans, that is to package them for sale to third parties. In doing so they also packaged the asset that the loans applied to. These asset-backed securities (ABS) were supposed to be safe because of the value of the collateral bound up within their structures. It is the mistake that bankers always make: that taking collateral against a loan gives them "security".

It was a long time coming, but the property bubble finally burst. The result was not merely the failure those of banks most directly involved in property, but also those banks exposed to the ABS market- which in practice meant pretty much all of them.

The impact in Europe was twofold. Those countries most exposed to property: the UK, Ireland and Spain saw large parts of their banking system evaporate. Domestic rescue plans were initiated and guarantees were issued. Meanwhile those countries with large state debts based on an unaffordable welfare state found that their access to the capital markets closed. Populations to pay for the welfare are generally falling- and resistance to immigration is making the problem even worse.

At first it was the poorly structured economies that fared worse: Greece was forced to address its long term deficit. However, the absolute breakdown of the Irish property market increased Irish government liabilities to several times the Irish GDP. The deficit yawned to over 30% of GDP.

At this point the anti Euro crew will argue that had the Irish been able to devalue their currency, then the crisis would have been resolved, because the bubble would have burst far sooner if the demand for Punt, as opposed to Euro, assets had reflected the smaller size of the Irish economy alone versus the Eurozone as a whole. Furthermore, the Irish could have mitigated the crisis, as the UK has done, by devaluing their currency.

Mitigated, perhaps, but as the experience of the UK, which can devalue its currency, shows it is certainly not solved.

As I have argued repeatedly on this blog, devaluation is only ever a temporary solution, and if it is used- as it has been in the UK- simply to avoid painful structural adjustment then it ends up permanently reducing the economic potential of the entire economy as people simply build in higher inflationary expectations. Arguably the reason for the instability in the Eurozone's periphery is a function of the fact Germany- the core Euro economy- has been undergoing a long and difficult restructuring, and has emerged extremely competitive, indeed too competitive for the other unrestructured economies to cope with.

Now the breakdown of the property based savings and welfare system is creating a second meltdown: not only a meltdown of the banking system, but also of the states that have issued guarantees to that banking system.

It is a meltdown that will lead to sovereign defaults, and not just in Europe. The policy of competitive devaluation can not work where China- the worlds largest surplus economy and the worlds manufacturing base- maintains its own artificially low currency level. Without the unlikely prospect of a dramatic Chinese revaluation, even the breakup of the Eurozone and drastic devaluation by the most insolvent economies will not solve anything. The Germans will remain efficient, the Chinese will remain efficient and investors will be more fearful than ever about the prospects of the ex-Euro countries.

The only solution is to do what the Baltic states have done: make a drastic cut in costs by an "internal devaluation", in the case of the Baltic by around 25%. That means wages fall by 30% and house prices by 50%, and the overall level of costs by about 15%. The Balts did in last year. The Greeks propose to do half as much over five years, the Irish by 15%- not 25%- over 3 years.

Not enough, and the result is that these Euro-delinquents will require a rescue that is beyond the ability of the rest of the Eurozone to finance. A debt default is therefore now very likely. Only this is where we can criticise the ECB and the European Council: we still do not understand how such a default will be handled.

But after the inevitable default happens, we are in a whole new ball game, and no one knows what happens then. One thing is for sure, very few of my generation and none of the following one will be retiring from work at 55.

The age of austerity that looms before us is set to be measured in decades rather than years.

Monday, November 22, 2010

The Mail, Dan Hannan and never having to say you're sorry

Blogging has been even thinner than usual: despite much to write about, I have found so little time. Fittingly, perhaps, I choose to break my silence by focussing on time, or rather time zones.

Since daylight saving was first adopted in the UK in 1917 (interestingly, one year after Germany had already done so), there have been various attempts to get the best use out of daylight. During the Second World War there was even "Double Summer time", while in the late 1960s I can remember that clocks stayed on GMT+1 all year for several years. In short there is nothing ordained about the time zone in the UK. In recent years however, the UK has settled on GMT in the winter and "British Summer Time (BST)", i.e. GMT+1 in the summer.

There are pros and cons about reverting to GMT for the winter- it does allow more daylight in the morning hours, but of course this is at the cost of an earlier dusk. For school sports, such an arrangement is not ideal, and in any event in the far north and west sunrise is still very late anyway. So, as I say, pros and cons and it is a fair argument to have.

Fair, that is, unless you read the Daily Mail. The reaction to the idea of changing the time zone (and by coincidence having the same time zone as some other parts of Europe) has been borderline hysterical. "Join our campaign against BERLIN TIME" etc.

What a load of horseshit.

Apart from the fact that there are multiple time zones inside the EU- I, for example, am living in a time zone 2 hours ahead of GMT and 1 hour ahead of Berlin- this kind of knee jerk anti-Europeanism is fatuous in the extreme. The debates about whether we should move time zones is about the quality of of life in Britain and nowhere else: for goodness sakes the MP who is proposing the move is a Conservative !

So should we chalk it down to the usual dim wittedness of the right wing press?

Well another Right wing journalist (not, please note, a banker or an economist) is Dan Hannan. He of course has been gloating over the travails in the Eurozone for some time. Though only a total ignoramus would propose- as he did- that Ireland should adopt the Pound Sterling in place of the Euro. The economy of Ireland, and especially its history, make such a proposal not only wrong but even offensive to many people in Ireland. Such "Little Englander" triumphalism belongs in a sixth form debate, not in serious politics: but then Hannan would say that since he is an MEP, he is not a serious politician anyway, so perhaps we have something we can all agree on.

Virtually the only currency weaker than Sterling recently has been the Greenback. The Euro has risen in value against both those former reserve currencies.

The fact is that the Euro is not dead, and the crisis is forcing the Eurozone members to face a necessary and serious reality check- and it is only the advent of the coalition in the UK that has forced Britain to take the same decisions. Nevertheless, let us not let the facts get in the way of a good story.

Hannan asks those who support the Euro to "apologise".

Will he apologise, I wonder, if Sterling continues to devalue against an intact Euro over the next year?

I doubt it- the world view of the right wing press admits no error- secure in absurd bigotry they will continue to bathe in paranoid fantasy for many years to come. The trouble is that they make life so unpleasant for the rest of us.

As for the Euro: the crisis is certainly not over with the Irish bail out. However it may prove to be the beginning of the end.

Saturday, November 13, 2010

Henryk Mikolaj Gorecki

Krakow.

A May morning, before the dawn of a Golden day of clear sunshine.

It is the early 1990s. I have walked from the Krakow Glowny station to the Main Square in the dark. The Square- Rynek- is empty and I am alone. It will be many hours before I can go and find a place to stay.

I sit on a stone bench, resting my rucksack by my side. The Rynek then was uncluttered, so the full sweep of the magnificent cloth hall was unhidden. To my left the Kosciol Mariacki loomed, smoky, with a single gleam of bright light behind a shutter of a room high up on one of the towers.

The sky was growing lighter by the minute. across the City the bells of churches, monasteries and Wawel Cathedral began to ring for 5 o'clock. A chorus glorying in the new day. High up in the tower, the shutter opens, and a man holding a silver trumpet can be seen.

It is him and me in the whole square.

Then he begins to play. The Hejnal Mariacki - the warning to close the gates against the Tatars, the Mongols, the Austrians, the Germans, the Russians. Always it ends in mid note. four times: for each of the points of the compass he plays, then the shutter is closed.

I have been entranced. The sun floods the square.

Finally, I think, I am here.

I have come to beloved Poland, whose language I have tried to master and whose history I have tried to understand and whose future I hope to help, and I have come for the first time.

A few days later.

A train back to Krakow from a small industrial town whose German name is a byword for evil.. I have found the first part, despite the room of shorn hair, the room of shoes, the room of suitcases, the Death bloc, the trial gas chamber, strangely familiar.

Then I went to the place of the birch trees: Brzezinka, Birkenau.

The gate.

The forest of brick chimneys marking where wooden huts have rotted away. These were the places for the lucky ones who survived the choice of slavery or death. Mostly it was death, often death by slavery.

The concrete monument, ugly. In the seven languages of the United Nations it says in front of the altar of the gas chambers and the crematoria and the pit and the pond: "Never Again".

And I am crying because I know in Omarska and Prijedor it is happening again right then.

And it happened again in Cambodia, in China, and Korea, and the Gulag, and will happen again in Rwanda and Sudan and Congo.

And at Auschwitz no birds sing- it was true. I too am silent on another summers day.

And in the train I listen to the Symofonia piesni zalosnych. As I travel from horror to humanity I am listening to the souls of the tortured, and they are alive and they sing of the joy of life and the sorrow of the end of life.

I am comforted.


Niech Bog blogoslawi Henryka Mikolaja Goreckiego.

Thursday, November 11, 2010

Looking in the Media Mirror

I am on a very quick trip to the UK, and wandering around Central London yesterday, I espied the gathering demonstration "against the cuts" by some students.

As demonstrations go it was not a particularly big one. There have been far bigger demonstrations which have not been reported at all in the national media. This relatively small demo has attracted media attention pretty much because a bunch of fringe nutters- Socialists, Anarchists etc.- decided that it would be fun to have a bit of a barney at the Milbank tower. Unfortunately the Police were not prepared, and there were not enough of them, so the nutters managed to hurt people and cause damage. The fact that the TV pictures were so good has meant that these criminal acts of petty violence are being reported as some kind of apocalypse.

Some of the Media have gone so far as to hint that the Coalition in some way "provoked the students". Leaving aside the fact that it was not students who led the riot, the fact is that the Anarchist and Socialist fringe have never been reconciled with the current social order: not capitalism, and not democracy either. They will always seek excuses to play their infantile and doomed games of violence because they are deluded that a revolution in Britain is not only necessary but popular.

I am willing to bet that the number of people who believe in Anarchism or Revolutionary Socialism as a practical political programme in the UK is a vanishingly small number. So why then has the media given any of the events of yesterday any political significance at all? I think the answer is that even the moderate left - which has a very strong swell of support amongst the chattering classes- does not believe in the sincerity of the politicians of the Coalition. Reporting of the past few months has been coloured by the idea that the Liberal Democrats are traitors to the progressive cause, and that the Conservatives are simply spittle flecked bastards. This media narrative as been so prevalent, most noticeably at the party conference season, that no one in the media- or at least the BBC- seems to understand that it is not true. The Coalition, is turning into an efficient and effective administration, particularly in contrast to the shambles of the last Labour government. That is not to say that they are not making mistakes, but the media narrative of incipient Liberal Democrat rebellion and/or collapse is simply a travesty of the truth. The party membership since the election has been growing - at times very rapidly. We are winning by-elections, and if the opinion polls are a bit weaker, then to be honest it was only to be expected. Party morale is high and while there are disagreements amongst the Parliamentary party, these are very far from being the coalition threatening challenges that, for example, Polly Toynbee thinks that they should be.

After the fiasco of the Brown government and the shallow cynicism of Tony Blair, I might have thought that the Labour Party would be a little less shameless about their opportunism- especially since they agree in private, and often in public too, that they would be following policies in government that would differ from those of the Coalition only in degree. However we must remember that some in Labour carry a visceral hatred as part of their Socialist legacy: political opponents are not merely wrong, they are morally corrupt, or even, a word used far too often: "evil". The idea that Clegg and Cameron are decent men trying to do their duty in very difficult circumstances is held up for the deepest contempt- too often, Labour are not the "loyal opposition" and this gives tacit encouragement to the radical left that violence is justified.

But such violence as we saw yesterday is never justified- it is simply criminal.

Therefore I hope that the media, caught up in the dramatic narrative that their own pictures provide should not give a bunch of Socialist and Anarchist narcissistic thugs any validity. Blowing up a Socialist "good day out, smashing the state" into a challenge to that state is grossly irresponsible. Whatever the personal sympathies of the journalists, they have a duty not just to reflect the immediate pictures but to place those pictures into a context, and the rolling news of the past 24 hours has failed to do this. These thugs do not represent any groundswell and it is outrageous to state that they do.

Of course, seeing red flags of the Socialists and the red and black flags of the Anarchists raises my hackles dramatically. For me, the only difference between the Soviet Socialists and the Nationalist Socialists is that Stalin killed more people, more brutally and for longer than Hitler. There is a complete moral equivalence between the two monsters of the Twentieth Century, and those who march in the name of this ideology should know that they attract loathing and contempt in equal measure. However the "Old Left" of fellow travellers, from which Ed Miliband springs, retain an affection for the revolutionary left, which is blind and morally cowardly.

It is time for Labour to stop excusing the revolutionary left- it is time for Labour to engage in grown up debate, accepting that their political opponents are worthy of respect. Alas I really don't think that they will. It is a pity, because without such an intellectual renewal I can see the British people- who do not support political violence- drawing their own conclusions. There are decent people in Labour but too often they have been marginalised in favour of the political grandstanding and cynical opportunism that a party shorn of a coherent ideology seems to encourage in its leaders. Blair was a dead end for Labour, but his poisonous legacy- and that of Peter Mandelson- remains. unchallenged.

Monday, November 08, 2010

Woolas: Liar and New Labour Minister... and?

Phil Woolas loathes Liberal Democrats, and the feeling is completely mutual. He has always been extremely hostile and combative towards us. It is not therefore a surprise that he overstepped the line and became the first MP in over a century to be chucked out of the House of Commons for the disgraceful way he conducted his campaign.

Except that Mr. Speaker Bercow has decided that his ejection from the House must await the outcome of his appeal. I won't speculate on why the Speaker has made such a strange decision- it seems to second guess the appeal- it shows a slight contempt for the lower court, but then Mr Speaker Bercow is not too big on legal niceties.

In any event the decision of the lower court is pretty damning- it will be exceptionally difficult for the Court of Appeal, or even the House of Lords/Supreme Court- if it comes to it- to set aside the judgement.

But then the issue is removed for the legal and returns to the political: a by-election may need to be held. Given the change in Circumstances, many commentators- such as John Rentoul- dismiss the chances of the Liberal Democrats out of hand. They may well underestimate the determination of the Lib Dems to fight this to the last vote- it is not certain that Labour can or should recover from this disgrace, should the by-election actually take place.

On the other hand, Labour have something of a track record of dishonesty and hypocrisy, so why should Woolas be punished when Harman, Blair and the rest were not? I think the answer is "pour encourager les autres", to show that there are limits and that the personal hatred of Woolas led him beyond the acceptable limits by quite some way.

If the Appeal is dismissed, then the by election is profoundly interesting. It will be an acid test after the Liberal Democrat choice of entering the coalition and the equally controversial choice of Labour for Edward Miliband.

We will see the the result, but despite the polls, I see the Liberal Democrats are attracting a lot of new members, and the loathing of Woolas by the Liberal Democrats is equally visceral- if restrained by law in a way that Labour were not.

I am not afraid of the current position, and despite the contempt of Labour, I am increasingly sure that the country at large recognises the fact that Labour in office was more divided and drastically less competent that the Coalition- and that even the Conservatives now publicly recognise that the presence of the Liberal Democrats in office has improved the administration of government. We need to take our case to the country, and in particular to take the case for electoral reform to the country. The crux of this government will depend of the strength of the Lib Dems: now we must demonstrate this. The Oldham by election will be very difficult for the Lib Dems, but it will also be crucial: the future success of the party is riding on it.

I fear it may be that simple.

Wednesday, November 03, 2010

Science as a candle in the dark


OK so the State of Delaware may not have elected a Witch ("I'm not a Witch, I'm not a Witch..." WHATEVER).

However the United States has elected an awful lot of people whose opinions do not vary a whole lot from such simple superstition. Evidence gathered from peer reviewed papers is not the way that the US Congress conducts its business. Over 95% of the members of Congress- both new and old- have no Scientific background whatsoever.

There are more people in American politics who say that they believe in the "literal truth" of the Bible than those who acknowledge the demonstrable truth of the theory of evolution by natural selection.

If you can not base your political ideas on the Scientific method of sceptical empiricism then you might as well believe in witchcraft and spells to put things right. It is through such methods that we have been able to start to catch the merest glimpse of the spectacular wonders of the Universe, and our place within it. It is not superstition that is providing answers to our most deeply felt questions, but the steady progress of research based on looking for provable truth.

Once, an Astronaut, Jack Schmitt of the Apollo 17 Mission to the Moon, graced the benches of the US Senate. Now it is an array of trial lawyers and social workers. These politicians have a facility with words even while they lack a facility with ideas. Now, whether Democrat or Republican, American politicians are suppose to respond to the feeling of inchoate rage that is said to be the feeling of the American people.

I don't think they can.

I think the whole basis of American politics is now more Superstition than Science, and that is pretty bad for everyone. Ignorance is not bliss, it is fear and misunderstanding. The inchoate, primal fear of the mob may end up burning witches, but it is unlikely to find too many solutions to their problems.

Now America's leaders, from the President and the new leaders of Congress down, have a responsibility to inform their people about the realities that they face, and the price of dealing with the crises.

It is going to be a very difficult task.

Tuesday, November 02, 2010

The Mistakes of Margaret Thatcher

As Lady Thatcher emerges from hospital, she must have been somewhat buoyed by a poll that suggests that she remains the most influential woman in the World. However her influence rests with a period of office that came to an end nearly twenty years ago.

With the benefit of the hindsight given by those twenty years I think its is possible to begin to make a judgement on the eleven years that she served as Prime Minister. Certainly for all the adulation that the Conservatives offer her now, she was not generally popular either in the country at large or in her own party for large periods of her time in office. The confrontational way she addressed the challenges that the post war decline of the UK created for the country was never going to make her a healing figure- despite her quotation of St. Francis when she entered office.

There are two, sharply polarised, positions of conventional wisdom concerning the Thatcher government. The first is the adulation of the Conservatives- and not just in the UK- Margaret Thatcher defeated the Communist funded Unions at home and the Communist governments of the Warsaw Pact and ushered in a new more energetic spirit of entrepreneurship into a UK that had grown tired of the tepid failure of post war "Butskillism". The second is the view of the Left, which has been forcefully -and offensively- expressed in the past couple of weeks: that Thatcher was evil, that she knowingly destroyed entire communities and inflicted unnecessary damage on the productive capacity of the UK.

I have met Lady Thatcher in recent years, and if her health is now very poor, it is still possible to get a spark of the combative personality that she once was. However when she asked "is he one of us?", she was, remember asking it of members of her own party. The habits of compromise were deeply ingrained into the Conservative Party and partly as a result, the Thatcherite revolution remained incomplete at the time of her defenestration in 1991. I think Margaret Thatcher did not understand that, against all her most conservative instincts, the only way to secure her move to free markets in the economy was to open up the political system too. It was her failure to understand the need for a free market in politics that condemned Britain to the bathos of the Major years and the dead end of Blair. It was a failure that destroyed the Conservative Party in Scotland- once one of the strongest Tory heartlands- and created a constitutional crisis that remains unresolved to this day.

As for the critique of the left- that her policies inflicted unnecessary damage on the British industrial base- I think that there is indeed much evidence that this is the case. Despite the global migration of industry to China, Germany has not seen the kinds of declines that the UK has, and is a far stronger economy as a result. While the 1986 "Big Bang" unleashed a tide of creative destruction in finance, the long term consequences remain unproven, but the destruction of manufacturing has permanently impoverished large areas of the Kingdom. Defenders of the Thatcher legacy argue that she had little choice given the dependency of much of this industry on the state and the Communist penetration of the Unions in enterprises such as British Shipbuilding, British Leyland and of course British Coal. Certainly, now we have been able to read the KGB archive, there is little doubt that many Union leaders, directly or indirectly, were dancing to Moscow's tune.

If the economic legacy of Thatcherism is highly controversial, her foreign policy is far less so. Her determination to forge a stronger resistance to the USSR in the wake of the invasion of Afghanistan and the crushing of the Polish Solidarity movement, at times made her seem at least the equal partner of her political soul mate, Ronald Reagan, who was elected eighteen months after she had come to power. The deployment of short range nuclear missiles to match the Soviet deployment of the SS-20 in the early 1980s was hugely controversial at the time, but in retrospect it was the only way to reinforce NATO in the face of a concerted attempt to subvert it by the Soviet leadership. Yet, as soon as Mikhail Gorbachev emerged from the senile pack of the CPSU leadership, she recognised his value. In the end it was not her resistance that undermined the USSR, it was the fact that she was willing to "do business" with the Soviets that accelerated the pace of change in the moribund Soviet state.

Arguably, had the Thatcher government understood the need for a wider revolution - a constitutional one- then the UK would have been able to transform itself far more radically. In the end she could not transcend her own conservatism in order to complete the liberal revolution that she aspired to. She had a wider vision internationally than she had domestically. Figures such as Arthur Scargill or Jack Jones- self declared militant Socialists- prevented any engagement with the government that could have addressed the problems of British industry pragmatically. Then- as now- the loathing of Margaret Thatcher by the Left did not allow them to engage with or even understand her: the polarisation of politics that resulted (and remains) is at least the result of the vituperation of the defeated Left as the inflexibility of Margaret Thatcher herself.

Even today the language of the Labour Party refuses to accept that Conservatives or Liberal Democrats are motivated by good motives. Labour then, as now, ascribes the basest motives to their political opponents, failing to recognise that they are at least as idealistic as themselves. It is this wilful blindness that allowed people on the left to behave so disgracefully: talking of parties to celebrate the death of Margaret Thatcher when she entered hospital. This visceral hatred from the left is now being turned on the Liberal Democrats, who are routinely pilloried as "traitors", as though Socialism had any greater moral force than the Liberal ideal of freedom. The hatred of the left is a fearful thing, but it has allowed Liberal Democrats to finally understand the fact that it rests on the fear of the Left that Socialism has failed.

Indeed Socialism has failed, and it was not just the years of Margaret Thatcher that demonstrated this failure. The Blair-Brown years have ultimately been as economically catastrophic as the 1970s, and if the legacy of John Smith forced Labour to at least begin to address constitutional reform, the advent of the coalition should now allow that work to be completed. Freer votes, an elected House of Lords, local government reform, a transfer of powers from Whitehall to Scotland, Wales, Northern Ireland and English local government, and a wholesale slimming of the state may only gain the partial approval of Lady Thatcher, but they are at least as necessary as the radical economic changes that she brought about.

I think it interesting how little today's politicians claim the mantle of Margaret Thatcher, and the reason is that her legacy is not an unalloyed success. If in foreign policy her instincts were almost always right, this was far less true domestically. Although the mistakes of her political enemies allowed her the victory of the Miner's Strike in 1984, in fact British manufacturing was not renewed: it was replaced by the more intangible benefits from the success of the City. That such success was questionable was evident even as early as the crash of 1987, which forced a bargain price onto the BP privatisation, and it is even more questionable today.

So although I wish Margaret Thatcher well on her recovery, I would also say that as a historical figure she made many mistakes and that her lasting impact may be that she may inspire greater change than she herself was able to achieve in office. She does indeed remain influential.

She does not leave an unblemished legacy, but at least she recognised the scale of the problems and made attempts to address them. If we compare her demonstrable sincerity with the charlatanism and personal greed of Tony Blair, she certainly looks better by personal comparison. In the end, if the coalition can continue to deliver a structured programme of economic and political reform, then perhaps the mistakes of the 1980s may not be repeated.

That would not be a dishonourable legacy.