Sunday, August 29, 2010

Labour hypocrisy part 94.

Labour hypocrisy continues to become their standard policy stance.

At the 2010 general election they supported immediate legislation to change the electoral system to AV. A few weeks later they now oppose it- on the grounds that the Lib Dems and the coalition are for it.

At the 2010 general election they supported the creation of a 111 number to replace the failed NHS direct project. Now they oppose it- on the grounds that the Lib Dems and the coalition are for it.

So- since Labour sold their principles for the snake oil promises of Blair and Brown, I suppose we can not expect them to be principled.

On the other hand, they could at least be consistent.

Every day that passes I see a Labour Party so politically bankrupt that that they will not accept any responsibility for anything they say or do.

This probably explains why they inherited a prosperous economy and bequeathed a bankrupt economy.

No matter which of the bloodless politicians that Labour chooses as their temporary leader, it is hard to believe that they have anything to offer the British people at all. Labour's Socialist ideology went broke decades ago- and each time Labour has entered government, the country has come close to following it.

Personally I think there is a case for Mr. Blair to face investigation for his conduct as Prime Minister- especially since we are now told that his greedy cashing in on the status that we allowed him has subsequently made him a multi millionaire. A property portfolio of £15 million Pounds suggests that he could well afford to hand over the estimated £4 million royalties he may expect from his book to the Royal British Legion.

Despite the vicissitudes of government, I think that it may yet be the Labour Party that faces a public backlash against their hypocritical, short sighted and short term leadership. They certainly deserve profound contempt for their failure both in government and in opposition.

Friday, August 20, 2010

Hussein Obama faces the birthers

I see that 18% of Americans apparently believe Barrack Obama is a Muslim.

Frankly it just shows that in the hate filled world of the radical American right, if you tell a lie big enough, for long enough, it will end up being believed. These are many of the the same people who insist that Obama was not a native born American, and therefore an unconstitutional President- the "birthers".

The certainty and the spittle flecked hatred with which these people express their views, for which there is not one scintilla of evidence, is truly extraordinary. It is not one step from Fascism.

It is Fascism.

That is extremely worrying for those of us who like and admire so much about the USA.

In the face of the administration mis-steps: calling allies "partners" not "allies"; failing to inform, still less consult those NATO allies on critical decisions; treading quite firmly on British toes over the Falkland Islands, BP and a range of other issues, it is clear that the atmosphere is Washington DC is rather febrile at the moment.

However, for all the mistakes of the incumbent administration, the "birthers" and other extreme manifestations of the "tea party" movement are a far greater concern.

The decline of the European powers in the face of the rise of the United States was handled with about as much grace as it could have been. One wonders whether, in the face of the rise of China, the Americans may follow a different and far more dangerous path. Could it be that a country that considers itself to be the world's greatest democracy might end up so shocked and embittered by their decline that they end up following a demagogue? If this is the reaction of the right in America to the relatively minor changes that have been proposed by Obama, then one wonders whether in fact we are seeing a nascent Fascist movement emerging.

The Roman Republic -upon which the United States is explicitly modelled- fell after 482 years as the result of demagoguery and the Imperial subversion of Caesar. Those in America who are determined to give such passion to their lies are quite capable of subverting the American Republic too.

The price of Freedom remains eternal vigilance- but sometimes the enemy can be in oneself. If the political agenda in the USA continues to be set by the birthers and the likes of Rush Limbaugh, then the future of the US could be grim indeed.

Wednesday, August 11, 2010

So what can we "still" do in the UK?

Britain was once the biggest economy in the world. Britons invented a spectacular array of the most important inventions of the nineteenth and twentieth century. From the steam railway to television; telephones to the jet engine, British creativity provided the foundation for enormous economic power. On the back of this, the country rose to become by far the most powerful state the world has ever seen. Amassing an empire that comprises one sixth of the planet's land and resources and one quarter of its people, it nevertheless took most pride in a democratic system that was substantially in advance of virtually all of its contemporaries. While the United States had bitter arguments over slavery that led to a vicious civil war in 1861, the British Empire had already abolished all slavery a generation before, and on the British mainland it is arguable as to whether slavery had ever legally existed at all. The disparate citizens of the Empire were united in a common purpose, a manifest destiny that gloried in its richness and diversity.

It is fashionable to say that the British Empire was already in decline before the opening of the twentieth century: The thirty years after the German state was created in 1871 saw a spectacular leap forward in German technology, and German speaking science, from Einstein and Freud to Robert Bosch, was rapidly taking the lead. The huge market of the the newly open American Frontier was driving the massive wealth of the gilded age. The Russian Empire then, as now, despite the mass of its down trodden people, was producing legendary levels of wealth for its elite of princes and industrialists.

Yet despite this, the Royal Navy continued to rule the waves, and British technology was creating the largest car making and ship building industries in the world.

Then came 1914.

The weakness of the British economy was that the education system remained very narrowly focused. Twenty or thirty public schools provided the aristocratic elite with an education that was detached from the rest of society. Imbued with the traditions of Sparta, these public schoolboys were amongst the first to volunteer in 1914. One million men were killed, and they were disproportionately amongst the best educated. This was why the political generation that led the country between the 1930s and the 1960s were so old: the generation that would have been the leaders were buried on Flanders fields.

The First World War devastated Britain. With the creation of the Irish Free State in 1922, the United Kingdom ended up losing more territory after the war than Germany did. Even the Empire began to loosen its ties with the homeland. Appalled by the incompetence and brutality of British leadership at ANZAC Cove and Vimy Ridge, Australia, New Zealand and Canada had found new national identities forged in the fires of the Western Front. In 1931, the Dominions essentially became independent, and it was clear that the debate on the future of India, the largest possession of the Empire, could not be stilled forever. Furthermore, the economic policy mistakes of the 1920s undermined investment in British industry, and the country endured a drastic loss of competitiveness. To add to the country's woes, it continued to abjure debt restructuring, and paid its debts to the United States in full- when all others could not or did not.

The exhaustion and the missing generation made the British certain that virtually nothing could be worse than fighting another war, and the result was fatal. In the face of the challenge of the deranged megalomaniac, Adolf Hitler, the British initially chose appeasement. Yet it was a policy which made the eventual war, when it finally did come, a struggle for the very survival of the Nation. Between June 1940 and June 1941, when Hitler attacked his erstwhile Soviet Ally, Britain and its Empire did indeed stand alone- assisted only by some very conditional and limited US lend-lease. Churchill spoke of the "finest hour" of the British Empire and people, but the price of the finest hour was the very Empire itself. It was not until 1942 that the United States fully joined the Second World War. Two and a half years later, at Yalta, Roosevelt had a choice between the Soviet Empire and the British Empire, and astonishingly he chose Stalin. Yet by that time, the British Empire could not have been sustained without the assistance of the United States anyway. Although by 1949, the Americans realised their mistake, it was already too late. The British economy was on its knees- with food rationing to continue into the 1950s.

In the face of the challenge of the murderous Soviet system, Britain- shorn of virtually every last one of its colonial outposts, no matter how small- locked its fate together with that of the United States. While Macmillan hoped the country would become "Greece to America's Rome", the partnership was in fact far more one sided. Although it was at least as much British know-how as American that contributed to the Manhattan Project, the United Kingdom was not given access to nuclear secrets, and the end of the Blue Streak ballistic missile project was also the end of any deterrent that did not rely on American missile technology. The special relationship meant that the United States based tens of thousands of military personnel in the UK, and was integrated to a certain degree into the military and intelligence decision making process in Washington D.C. but there was- and is- no question about who was the junior partner.

By the 1970s, the Soviet involvement in the British Trade Union movement had contributed to the catastrophic decline of the British economy. Despite the renewal of the special relationship, between Margaret Thatcher and Ronald Reagan, US support for Britain in for example, the Falklands war, was as vital to Britain as it was conditional- for example extending the terms of the American lease on Diego Garcia in the British Indian Ocean territory.

I make this historical excursion because David Cameron's mistake in suggesting that Britain was America's junior ally in 1940 is reflective of a mindset that struggles to see Britain in an independent way. As the coolness in US-UK relationships continues, based perhaps on President Obama's contempt for an Empire that was actively resisted by his own father, the other point that Mr. Cameron made- that the special relationship can only be based on special interests is obviously valid. It also underlines a potential new national debate.

The fall of the Soviet system has created new challenges: the rise of China and India in particular could well mark the relative eclipse of the United States as a global hegemony. Yet it is the politics of British decline that concerns me here. To quote Dean Acheson once again: "Great Britain has lost an Empire and has yet to find a role". The problem is, I think, one of National ideology. The United States continues to think in terms of American exceptionalism- in precisely the way that the British imperialists once thought of themselves. Yet as British decline has continued, the country has struggled to identify what makes it special or even what makes it itself.

We are confronted with decline on a daily basis. One of the most common sentences when we describe our country is that we can "still" do something. We can still show the world pomp and circumstance, military efficiency, good quality products and so on. The problem is that when in the past you have been number one at virtually everything, it all seems a bit lack lustre. It also makes it difficult to decide where to focus our efforts in the modern world. We don't know who we are.

In fact the country can barely decide what to call itself. The official name of The United Kingdom of Great Britain and Northern Ireland is absurdly too long. "Great Britain" or Britain , does not include the Irish component of the State, while "The United Kingdom" or "UK" simply describes the political structure, with no mention of geography. Other countries don't know what to call us either: "England" is most usual- though I did hear an American use Great Britain when he meant England- "we will go to Great Britain and to Scotland". This failure to even describe who we are reflects the fact of separatism in Scotland and Northern Ireland, but it also blurs our identity.

How can we know who we are, if we don't even know what to call ourselves?

If we are going to undergo a process of national renewal, we need to understand what our goals are, and what our agenda is: in short, Britain needs a national ideology. It is time to accept the old ways of doing things, from an unsustainable and unfair welfare state, to maintaining an unreformed political system with an only partially democratic Parliament, is holding us back. We need to open up our society to renewal.

The question then is to accept the things we need to change and to change them, and to maintain the things we should maintain- including our armed forces. The question is whether our political leaders have the wisdom to tell the difference.

It is time to turn the page on our long history of decline and to establish new ground rules that will allow us to recover a sense of national self respect- a process that is now long overdue.

Friday, August 06, 2010

Waiting on the down cycle

In theory, the impact of the global credit crunch of 2008 is supposed to be dissipating. The global economy is growing and the banks are back making money. Political and business leaders are speaking about a return to normality.

Yet conditions are still very far from "normal".

Bank of England interest rates are nominally 0.5%. Yet the historic average interest rate since the Bank of England was founded in 1694 is 5%. Monetary authorities around the world are not only setting negative real interest rates, but also seeking to fill the economic hole left by the credit collapse with new money: the so-called "quantative easing". These are very extreme monetary positions.

Although the US policy makers remain concerned about deflation in the Dollar, the UK faces different problems: British inflation is quite high. The general inflation number remains consistently higher than in global competitors, and more to the point, the UK housing market has continued to boom. Whereas in the US we have seen house price falls of as much as 40%; in the UK, nominal prices have continued to rise. Despite the slowing of the economy, and the prospect of significant action to cut the unsustainably high deficit, house prices have continued to rise. Some point to unexpectedly strong GDP growth numbers, but the fact remains that the sustainability of UK growth is a huge question while interest rates remain so low, and the deficit remains high. Growth rests upon these two highly unstable foundations, and now both the government and the Bank of England must address their problems and try to return the British economy to more normal conditions. Yet the conditions that obtained before the credit crunch set in were not normal either: the longest boom in history was funded by the largest credit expansion in history, followed by the bankruptcy of the banking system, which required the largest bank rescue in history.

The UK has used the global credit expansion to fund house prices, and not investment: hence Britain has both a weak physical infrastructure and inadequate investment in business. It is not surprising that the country has created a structurally high rate of inflation. The question is now what happens to house prices when the government cuts expenditure and interest rates go up?

This is not an academic discussion: the BAnk of England is already moving towards a more hawkish stance, while the Osborne budget suggested that the cuts in government expenditure would be of the order of an across the board cut of 20%, and in certain areas, much higher. Indeed the Russian drought and Canadian floods that are conspiring to increase the price of wheat, may mean that the inflationary ogre will be at the door much sooner than previously forecast.

So, the gloomy profits warnings from the likes of Next may indeed be quite justified. The British economy still has a very long way to go before we can speak of sustainable conditions for growth. Gordon Brown, who foolishly decreed an "end to boom and bust" without understanding that his own policies were themselves distorting the business cycle, has left a poisonous legacy.

The gloom of autumn will soon be upon us, although confidence in the coalition will probably protect Sterling somewhat- though it will be the inevitable hike in rates that will protect it more.

The price will be higher unemployment and -finally- an inevitable correction in the housing market.

Thursday, August 05, 2010

The Liberal Democrats get established

There has been a whole load of ill informed, wishful thinking in the British media of late. In the face of the (sadly all too common) post election fall in Lib Dem support in the opinion polls, the usual suspects on both right and left have been quick to forecast an early end to the coalition. Yet, despite having no leader, no policies and no principles, Labour continue to hold a respectable poll rating. The journalists who continue to hope for the fall of the coalition do not understand the fact that an early election would probably not lead to a strong majority for the Conservatives: it could even lead to a Labour recovery, which would exclude both coalition parties from power. The coalition may not be a love match, but it is a marriage of convenience, and one where mutual respect has emerged on both sides.

Simon Hughes criticism of the idea of ending life tenure for council tenants is not the first breath of a coalition-ending storm, it is perfectly legitimate to voice an opinion on a policy which is outside the remit of the coalition agreement anyway. In fact I can see the point of the policy, but understand Simon's concerns- it is a legitimate debate. Likewise, Liam Fox' attempt to secure Trident outside the Defence budget is a legitimate debate too: but what is interesting here is that more Conservatives now understand that the Liberal Democrats' position on Trident was not a question of Unilateral Nuclear disarmament- which just for the record is not supported by the party. In fact it is a question of bringing our nuclear deterrent into line with the strategic stance of the conventional armed forces, which do not anticipate an unexpected nuclear attack from another state: which is what Trident is designed to deter. The cost of Trident is undermining our capacity to fight the wars we are already engaged with: that is the point we were making at the general election, and now many Conservatives understand this and even privately support it.

So, despite attempts by the press to suggest that the Liberal Democrats discussion of policy implies a desire to leave the coalition at the earliest opportunity, in fact the Lib Dems are still broadly supportive of it- after all the party held a special conference to discuss the proposal and they overwhelmingly endorsed the coalition. In fact the risk to the coalition lies not with the Liberal Democrats, but with the rejectionist Conservatives. However these are increasingly isolated within the party. Many journalists, like Simon Heffer, who have been most critical of the Cameron leadership are, of course no longer members of the party- giving their support instead to minor parties such as UKIP. Thus the influence of their siren songs against the leadership has inevitably fallen. Though many of the new Tory MPs are said to have profoundly anti-EU ideas, the fact is that no one in the Conservatives -left or right- wants to return to their bitter civil war, and the presence of Ken Clarke and the Liberal Democrats in cabinet means that more provocative ideas can be kicked into the long grass. The government's policy on the EU is friendly engagement, not integration, and that is a good balance- as we have already seen in the recovery of British influence in the Union itself.

So despite the pressure that the economic emergency puts on the coalition, in fact the government is at least as stable as the previous Labour government, only without the element of back stabbing soap opera that so disfigured the Blair-Brown fiasco. The Liberal Democrats have seen many local parties gain a large number of new members. The party, despite the loss of "short money", is learning to be more efficient. The leadership and the activists can see that their policies are indeed being enacted in the coalition programme, while Labour's betrayal of electoral reform will be remembered or a long time to come.

Meanwhile the party will kick off the conference season in Liverpool on 18th September, and it is already set to be a record breaker. More attendees, more exhibitors, and inevitably more security underlines the fact that the Lib Dems now matter. They are in government. Although the party will undoubtedly debate the issue of the coalition, the fact is that the party is already benefiting- whatever the short run polls say.

For a party that prides itself on being anti-establishment, it is a shock to be part of the establishment. I am sure that the debates in Liverpool will be undeniably "full and frank", but the questions are now not how to obtain enough power to implement our policies, but how to actually implement them.

As David Cameron faces the dissidents inside his own party, he may find that the Liberal Democrats give him a far more positive reaction when he addresses them. Now, now we can get to work to build a more Liberal Britain, and the realisation that this is what the coalition actually means will certainly make the conference justify the attention that it will surely get.