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Showing posts from October, 2009

Tony Blair: a warning for Europe

In the just over two years since Tony Blair stepped down from the office of British Prime Minister, the state of his reputation in the country has not improved. Reviled in office as the man who committed the UK to a war that was not endorsed by the United Nations, his activities since strike the majority in our country as little better than sordid money grubbing. As Prime Minister, Tony Blair had an unerring sense for the political, that is to say how things appeared rather than how they actually were. The obsession with appearances created a dangerous disconnect between what his government said and what it actually did. In the end the whole theatre of "spin" and presentation made the British people jaded and increasingly cynical about politics. In short "spin" became, in the eyes of the electorate, just another word for lie. Although Mr. Blair now speaks a great deal about his religious faith, in office he did nothing to alter the constitutional bans that still of

Bank Bonuses: Why Osborne makes it worse

Even though the latest bank bonus payments have been greeted with predictable outrage in the usual quarters, in this case the "usual suspects" have a point. The concern about the financial industry for some time has been that the owners of bank capital have had their returns hijacked by bank staff. Certainly even before the crisis, the return on capital of banks over the past decade- mostly in single figures after bonuses- looked pretty anaemic. By contrast the payments to staff at banks have been substantially higher than investor returns. In the end, as we now know, the return on capital over the past two years has been so negative as to wipe out the balance sheets of several financial institutions. This has required the injection of billions from the taxpayers of the United States, United Kingdom and several other countries. Several banks are now either owned by the state or rely on the state for their survival through a variety of measures- including the extremely expensi

Jan Moir: Strange, Lonely and troubling

The news of Jan Moir's profound homophobia was deeply unshocking. It was not just that another young star has been pilloried by bigots. Through the recent travails and sad ends of the careers of assorted hacks, fans know to expect the usual drivel dipped in poison - particularly if those journalists live a life that is shadowed by dark appetites or fractured by private vice. There are dozens of journalists out there with secret and not-so-secret troubles, or damaging habits both past and present ; we all know who they are. And we are not being ghoulish to anticipate, or to be mentally braced for, their bad end: a long night, a mysterious stranger in the Groucho club, an odd set of circumstances that herald a sudden end to a once glittering career. In the morning, the page has already been turned over before anyone reads the lofty concerns of a self appointed hypocrite. It is not exactly a new storyline, is it? In fact, it is rather depressingly familiar, and somehow we completely e

So what if we get a hung Parliament in 2010?

The conference season has come and gone with very little real impact on the overall state of play in the run of opinion polls. Even this relatively small fall in its support would see the Labour Party lose the election. However that is not the same thing as saying the Conservatives will win it. The distortions of our electoral system mean that in order to gain a majority of 2, the Conservatives need a swing of nearly seven percent- the second highest swing in recent electoral history. Yet the polls, while charting a solid lead for the Tories in the popular vote, are far less certain about whether their lead in votes can be converted into a working majority of seats. Neither do the polls show great enthusiasm for the prospect of a Conservative government and much may happen between now and Thursday June 3rd 2010 which is the last date by which the election must be held. What happens if Labour do indeed lose but the Conservatives can not gain a majority? For the Liberal Democrats such a

A New House of Commons

There has been a certain glee in the air about the return of the British parliamentary expenses scandal back on to the political agenda. Journalists, whose own misdemeanours in this field are proverbial, have delighted in the humiliations that have beset the political class. The reaction from the voters has been, to coin a phrase, "they're all in it together". Rarely have politicians been held in lower public esteem. The general conventional wisdom is that an MP is probably a greedy rogue who seeks to put their own interest first and country second, if at all. The time has come- seems to be the conventional wisdom- for a new broom to clean out the political class bag and baggage. Many commentators like Rachel Sylvester believe that politics is set to be transformed by an influx of political virgins into the House of Commons, that indeed the next election will transform the conduct of British politics. I wish I could share this view. As Steve Richards points out in the In

MPs: if all are guilty, then no one is

What then? Are we better than they? No, in no way. For we previously charged both Jews and Greeks, that they are all under sin Romans 3:9 The Legg report on British MPs expenses looks to be a fiasco: by saying that so many MPs are guilty it means that individual culpability is diminished. It lets the most guilty off the hook while also tarring the essentially innocent with the brush of corruption. A truly terrible result that will undermine faith in British democracy to the point of crisis.

The first failure of George Osborne

The first years of David Cameron's leadership of the Conservatives have been a largely policy free zone. In that sense the Tories took a leaf out of the Tony Blair playbook: establish some kind of trust in the minds of the electorate and their votes will follow, even if they disagree with some aspect of your policies (which most voters will do). In that sense, the Conservative conference was a significant change of tack- George Osborne has been prepared to set out a clear policy of a pay freeze and deep cuts in public expenditure. For this he was lauded in the media as being rather brave. That the financial burden of the state is too large is now frankly pretty obvious, yet the way in which the Conservatives are likely to attempt to reform the public sector will most likely be counter productive, and will end up increasing the overall burden on the tax payer. For most Conservatives it is pretty much axiomatic that the private sector is a more efficient provider of services than th

Currencies and Confidence

In many ways the continuing financial crisis is quite literally all about money. The repeated bubbles of the Greenspan years at the US Fed created a long term credit environment that was so relaxed that it was essentially uncontrolled. The US created credit conditions that promoted massive borrowing which increased the wealth held in possessions but reduced the wealth held in cash- indeed created a negative net cash position. Yet the side effect was also to reduce the value of saving so that the holders of cash were not able to gain sufficient reward for them to even want to hold their wealth in money. A twenty year long largely debt-fuelled, gigantic spending spree was the result. In the end, this super cycle of credit growth ended with the credit providers being forced to recognise that the quality of their assets (i.e. the loans they had made) were not what they were said to be. This final recognition was the result not just of the dramatic expansion of lending to poor quality credi

Why Osborne is totally wrong

George Osborne, in his speech to the Conservative party conference demonstrated the total lack of understanding of administration that we have come to expect from almost any politician in the UK. Faced with the explosion in the costs of the public sector, Osborne's answer is simply to freeze salaries across the board. It is certainly the case that labour costs have run out of line, but the deal that Osborne offers is essentially "accept a pay freeze and keep your job". This is not public sector reform: indeed it pretty much guarantees that the motivated staff will leave and the quality of public sector personnel will fall. Mr. Osborne's supposedly "eye catching" and "brave reform" in effect strangles the ability of public sector management to carry out the necessary streamlining of the system: they can not fire under performing staff and they can not incentivize the staff that they want to keep. This is not public sector reform: it is the abandonm

The moral minefield of Latvian History

I had meant to blog on the profound ignorance that both the Conservatives and Labour have displayed on the subject of Latvian history. That the history of the Baltic could become a political football in the UK is the result of the frankly disgraceful way that Labour have tried to target the Conservative alliance with the Latvian For Fatherland and Freedom Party in the European Parliament as somehow being an alliance with "Nazi sympathisers". The lone MEP from this party is the former finance minister, Roberts Zile, who I have met several times. Quite frankly he is no more a Nazi than I am, and it is ridiculous to cast this thoughtful and humorous man in the manner that, for example, David Miliband has tried to do. I said I was going to blog, but to be honest, this piece from The Times by Ben McIntyre says it all so precisely that I don't need to repeat him. I think the Conservative alliance is absurd, but it is not absurd because of their alliance with Roberts Zile. It is

10 Famous... Russians

Today is Vladimir Putin's Birthday, so I thought I would add another country to my series of 10 Famous... and go for 10 Famous Russians. This is of course to demonstrate that there is much more to Russia than the man who is taking his country down a dark road to failure. It is actually an immensely difficult task to make the choice, not only because Russia is quite a multi national state, but also because the list of Russian talent is amazingly strong, nevertheless I have made as eclectic selection as I could: 1. Alexander Pushkin - the most beloved Russian poet 2. Yuri Gagarin , the first Human being to go into space 3. Peter Ilych Tchaikovsky - supreme romantic composer 4. Andrei Sakharov - brave dissident, had he lived Russia would not be facing today's moral crisis 5. Andrei Rublov - beautiful and inspiring icon painter 6. Anna Akhmatova - light of the silver age of Russian poetry 7. Ivan Pavlov - psychologist of the conditioned reflex 8. Sergei Rachmaninov - master of pian

On the Brink

FTSE Performance 2009 Source: FT There are now several commentators who are arguing that the global market rally is "too much too fast". George Soros, Nouriel Roubini and Robert Prechter have all independently issued warnings about the potential for market volatility. This comes on top of serious emerging problems with the US Dollar and the growing crisis in Latvia which could have serious consequences across Europe. The dramatic spike in the price of gold to hit new highs is a reflection of a profound sense of underlying crisis, despite the market rallies in stocks that are in anticipation of a resumption of global growth. In fact the rally is actually part of the problem- there remains insufficient banking liquidity to fund the kind of asset inflation that the market is now pricing in. As UK house prices also return to their previous- unsustainable- levels, the stage is being set for a brutal market rout. The quantitative easing intended to ease recession is instead underm

Latvia's storm begins to rattle windows across Europe

A few weeks ago a senior Estonian political leader said to me that he believed that the biggest threat to Estonia's security came from Latvia. It was not, he explained, that he had any ill-will towards Estonia's southern neighbour, but their failure to get to grips with the economic crisis could have paralysing consequences for the whole of northern Europe, including Estonia. Now concerns about Latvia are once again increasing. The emergency financing from the IMF and the EU needs to be rolled over and the government is going through a budget process that is contemplating massive cuts in expenditure, despite the fact that the Latvian economy has already shrunk by nearly 20% year on year. As the respite given by summer tourism now comes to an end, the Latvian government is facing what looks like a moment of truth. Although both Estonia and Lithuania have enacted generally coherent and organised responses to the economic crisis, Latvia's leaders have descended into a wave of

The European Game changer

The result of the Irish referendum has been long expected, and as a result I think that most commentators had discounted its significance. In fact, I already detect some significant political shifts that are taking place. Firstly there is no doubt that the "antis" are beginning to accept defeat. Even the bumptious and increasingly erratic Dan Hannan points out that a referendum on Lisbon alone makes very little sense. He argues that the referendum should be an in-or-out question and he will be campaigning to leave. So perhaps the first result of the ratification of the Treaty of Lisbon will be greater clarity in the argument: the debate moves on from the abstruse language of treaties to a straight yes or no question. The problem for the "Better off out" supporters is that they have no realistic answer for the question of how Britain can benefit from going it alone in a world where being America's most loyal ally only elicits indifference- even from the US itse

British Border disgrace

Over many years a visitor to the United States has had to run the unwelcoming gauntlet of US immigration. Long lines at each desk were followed by intrusive and rude questioning and in recent years by fingerprinting and even more questions. Though in recent years the process has become more organised and slightly more welcoming, it remains the case that if passengers are not US citizens or green card holders then it can still take a long time to clear US border controls. At the end of the day, though, the controls are targeted against foreigners and the United States has the perfect right to control foreigners who enter their country. The United Kingdom, however, does things backwards. Although non European citizens still need to fill in a landing card and be interviewed by an immigration officer, there is now a special kind of hell reserved for European travellers, including British Citizens. The lines to show your European passport are now regularly over an hour long, and at certai

The declining power of Dead Trees

The supposed defection of the British Sun Newspaper from supporting Labour to supporting the Conservatives got me thinking about the overall state of health of the Newspaper industry, and why anyone would really care what some foreign-owned rag thinks about British politics. Like an increasing number of people I read much of my news online. I will focus on certain stories and try to get differing points of view. However the UK tabloid press generally has pretty awful websites, so I typically don't bother to read them. When in the UK I will sometimes go and buy an actual newspaper, and I vary them; with the Independent probably being first preference, then the FT, the Daily Telegraph, the Times and then the Guardian. Of course when I do this I will see the front pages of the other newspapers. Sometimes the Sun amuses with some absurd pun, or the Daily Express with some shrill screech of paranoid outrage, or the Mail with some sanctimonious and unpleasant bigotry. However I don't

Being careful what you wish for

Simple pressure of work prevented me from attending or even commenting on the course of the Liberal Democrat conference in Bournemouth. Having spoken to several attendees and of course absorbed some of the coverage, it seems like it was one to miss. That is in itself a disappointment. The last conference before a general election should be a constructive and energetic one,and though in different ways I think all three party conferences are set to be slightly anti-climactic, for the Liberal Democrats not to make the most of their coverage is very much a wasted opportunity. The problem for the Liberal Democrats is that the media narrative continues to be defined by a two party system. The media assume that politics is a binary choice and that sooner of later it comes down to which other party the Lib Dems choose, and here's the rub: the Liberal democrats are actually very divided about both strategy and tactics in dealing with the other two parties. Electorally our primary battle re

Europe creates a crisis for the Conservatives

The release of the Conservative Home poll on the eve of their party conference creates a real headache for David Cameron. Even as it was, the Irish Yes vote on the ratification of the Treaty of Lisbon would have put Europe higher up the agenda for the conference that the leadership would have probably preferred. The problem is that in the details of the poll: only 16% suggesting that the treaty of Lisbon should be accepted and nearly three quarters want a complete renegotiation of British membership. Perhaps even more extraordinary, about 40% of Conservative activists actually want to withdraw from the European Union completely. The scale of Europhobia amongst the Conservatives is pretty dramatic and leaves the young Conservative leader with very little room for manoeuvre. The plain fact is that even with a filibuster by the right-wing President of the Czech Republic, Vaclav Klaus, all of the members of the EU- including the UK- are likely to have ratified the treaty by the end of 200