Archive for the ‘economy’ Category

A serious Labour politician

The sound of son of a butcher and former schoolteacher Paul “Lord” Myners on the Today programme this morning was all the reminding I needed of how utterly delusional members of the previous government remain, particularly in the area of their economic (mis)management. He seemed to be saying that what the coalition government is doing in announcing what amount to, in reality, pretty modest savings in the short term, designed merely to halt the speed of expansion of the national debt by slowing down government spending rather than slashing it, is putting some kind of Labourist-inspired ‘recovery’ at risk. I kid you not.

He and his ilk still seem to think that the last months of Brown, where spending was allowed to run out of control not as part of any genuine attempt to kick start the economy through some kind of novel notion (which even Keynes never proposed) that you can spend your way out of recession while servicing gigantic levels of borrowing, but as part of a calculated effort to save nothing more and nothing less than Brown’s political career by bribing Labour’s heartlands and key marginals, is actually defensible. It’s not, epsecially because it worked, predictably, in the North East, North West and, to a slightly lesser degree, Yorkshire, hence there was no Labour wipeout even if it didn’t save Brown (nothing could), but it didn’t work in the marginals, hence the coalition.

The point is, let us hear no more from the likes of Myners pretending that there was no political calculation involved with the reckless spending levels following the crash, or, indeed, that Labour had nothing to do with causing that crash with its disastrous system of banking regulation or deliberate stoking-up of cheap credit into a gargantuan property bubble. Even without the credit crunch (which did start in America) there would have been a crash in Britain inevitably, and a pretty big one at that.

Additionally, Myners completed his flight from reality by claiming that the latest G20 meeting was pointless and lacked the substance of the London summit in 2009, presumably because Cameron was there making the case for deficit reduction in the UK, rather than arrogantly lecturing the rest of the world about how to manage their own economies. I suppose Myners was so dismissive about the event because there was no really big chunk of money to boast about at the end. I think it was a mere one trillion dollars at the London event wasn’t it? Well, of ‘promised’ money that is, of course, although hardly any of it ever materialised and hardly any of that which did had any effect on the forces of nature driving the economic cycle anyway. But socialists don’t understand that, see? Sometimes the right thing to do strategically is nothing. Well, it matters not for the likes of Myners or Brown or, come to think of it, Alistair “Apologise To Me!” Darling any more. All they can do from now on is nothing. That, at least, should mean that they can do no more damage, thank God.

One last thing I thought worth mentioning: at the end of that programme we also had the annoying, schoolboy voice of Nick Robinson putting the sneering BBC spin on the Cameron G20 performance by referring to a picture of him with his head in his hands as the utterly outclassed, out-thought and luckless England team went 4-1 down to the dreaded Germans and musing, rather lamely I thought, as to whether this “new leader on the world stage” (he’s not that new) would end up “hapless” and ignored by the others. I wondered to myself at that point, seeing as it was apparently the day to make sweepingly dismissive statements, whether the performance of this England team, rather than somehow reflecting a “hapless” David Cameron, at least in mind of the Robinson talking head, had far more symbolic force as representing the end of the era of expensive under-performers who nevertheless walk away with a fortune despite having been kicked out of the tournament. That’s not England, thought I, that’s New Labour! Funny how the two eras, the “Golden Generation” and the gilt-edged years of plenty under New Labour, seem to parallel one another. But, of course, the reality check in the Merchant of Venice (Act 2, Scene 7) says it all:
All that glitters is not gold/Often have you heard that told/Many a man has his soul sold…

Less money (unless deserved), more passion (motivation) and more graft (productivity): that’s what we need not only from England’s footballers, but from the British population generally. Less bling and more sting; more passion – and less fashion. The superficiality of England’s performance almost perfectly parallels the intellectual and moral vacuum at the heart of New Labour. Over-rated and all mouth, costing a fortune, but when the going gets tough they crumble and the results become disastrous. In England’s case, Germany showed them up for what they really are, in New Labour’s, it was the crash. The only difference is, of course, that England were beaten by superior opponents, which is fair enough, but Myners is trying to defend Gordon Brown, the team captain who made all the wrong moves, chose all the wrong tactics and managed to defeat himself, taking the country with him. And that was after the credit crunch began. That was merely his Germany in the economic tournament. The moment Brown was really tested, the whole economic kingdom of debt that he created crumbled, and so did New Labour.

Myners and others who choose their own narrative on this lamentable passage in British history according to their political orientation are naturally welcome to do so. It might even be a coherent, even persuasive, story for the gullible, but it will never make it right.

As for the BBC, well, I assume there will come a time when the Conservative party finally has its bellyful of the licence fee-funded, left wing dominated organisation’s constant breaching of its charter and either disinfects it once and for all or breaks it up into little pieces, some commercial (the ones that are already, that is!) and some taxpayer-funded, with no licence fee. Then the left will have to go away and infect some other institution, if there are any remaining in the United Kingdom, which I doubt.

PS: Actually, Myners’ performance on this morning’s show was all the more bizarre when you consider that speech he made torpedoing current Labour politicians’ arguments against Tory plans. As Wiki says of the speech:

On 8 June 2010, Myners made headlines with a speech he made in the Lords. He said, “We clearly need a policy of fiscal caution. It was right to support the economy during the global recession but there now needs to be fiscal adjustment, as evidenced by the last Government in the Fiscal Responsibility Act. There is nothing progressive about a Government who consistently spend more than they can raise in taxation, and certainly nothing progressive that endows generations to come with the liabilities incurred by the current generation.”

Well, my feeling is now that he made that speech certainly not for the benefit of the Tories but to influence the Labour leadership race, possibly in favour of Ed Balls. Conclusive proof, if you’ll forgive the straw man, that Labour is only talking to itself. Long may that continue.


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Hayward: Bleak Prospects

It’s getting pretty clear now that the United States government will settle for nothing less than the destruction of BP as punishment for the environmental and economic impact of the disastrous Gulf oil spill. This is the conclusion that a lot of people have now if not reached, then are certainly nearing. After BP’s flat footed and presentationally poor chief Tony Hayward’s performance in front of a bunch of nauseating US administrators yesterday, which demonstrated his stamina but nothing more than that, no one in their right mind can dismiss the idea that BP is gravely ill. The oil leak is bleeding it anaemic. Credibility, credit worthiness and gargantuan sums of money are all being poured into the stratosphere. Pretty soon, all that will be left is the name.

The evidence for this pessimism? The Telegraph’s report today, which has been covered widely in the US on Fox and CNBC too, that the cost to BP for its liability will top $100 Billion should be enough, shouldn’t it? No company can withstand that kind of bill and remain intact, no matter how large it is. That’s the kind of money that takes down entire middle-sized countries. United States congressmen and women don’t give two hoots about that, however, this being an election year. All they care about is the hysterical US public opinion. It’s a simple calculation that US politicians from the pisspoor president down have made: ‘the more we hurt BP (shake it down and pump it dry) and dogwhistle the anti-British meme, the more votes we get’. It’s as pathetic as it is dismally feeble as it is dishonest.

BP will be gone by the end of the year. I’ll put money on it.

The economic, political – even the historical – implications of this are truly frightening (particularly in terms of just how rotten the United States political classes have become) but they’re separate issues that I’ll have a stab at in a later post.

Or maybe someone else, if they accept the basic premiss (that BP is finished), could have a go.

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That senior economists are even talking about inflation now, having pretended it didn’t exist for so long, should be a source of anxiety. That one of them should say something like this should be the prelude to panic.

In an opinion piece for on Friday, Mr Bean writes: “Some people have suggested that a bit of extra inflation now might actually be a good thing. After all, wouldn’t it help to get the economy going by reducing the real value of public and private debt? This is severely misguided.

“Aside from the dubious morality of redistributing wealth from savers to borrowers, we have seen from past experience that a bit of inflation has a nasty habit of turning into a lot of inflation.”

Deflation was a smoke screen for devaluation and new debt. However, someone has now broken ranks to warn of the true nature of the coming catastrophe: hyperinflation.

We’re doomed! Doomed!
Of course, I forgot. Without debt (money – or rather the promise of non-existent money), and more and more of it at that, the entire world economy would collapse into depression. Stupid me…
Get it? I don’t. Let’s get this straight again, without debt there would be no money = Great Depression II.
Well, you figure it out because I sure can’t.

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This is the global lending merry go-round as explained for the general public by two leading Australian economists, wisely employing a variation of the Socratic method.

There is an answer to all this, you know, and it’s called ‘cuts’. I wonder if young Danny Alexander is up to the challenge. Ha! Fat chance.

Remember John Redwood? We might have had a chance with him.

Hat tip: Tangled Web

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A few days ago, discreet – and now defunct – blogger “Letters from A. Tory” posted what I think is one his finest bits of commentary, among many fine bits of commentary from that individual over the years. We’d come to expect it, value it, even.

It’s worth noting, at least on my diary of political angst – for personal posterity, in other words, you understand – that I’d been reading the Letters blog for a couple of years or so already, long before I’d thought about the idea of an online diary of my own. But it was his efforts that finally convinced me to have a crack at it myself – at the start of last year. I have to be grateful for that, not least because it’s more or less kept me sane.

Well, now he’s gone, sadly. But his last post doesn’t just resonate as much as all his others, it’s a perfect warning to David Cameron, a man who, so far, has done pretty well as coaltionist Prime Minister, but he’s also ignored, alarmingly, his people.

Anyway, here’s the quitter’s last post:

Dear David Cameron,
This is the final letter that I will ever write, as this blog will sadly be closing down tomorrow (along with a final goodbye from me). I appreciate that this salient fact may have escaped your attention due to some rather important events in your own life and career over the past few days. Even so, regardless of the election result, you were always going to be the last person that I wrote to, as there is so much that I’d like to say.
When you became leader of the Conservative Party in 2005, I had barely heard of you. Along you came, with a superb leadership campaign and a genuine belief that the Conservative Party had to change in order to win an election – which was, of course, entirely correct. Over the following months and years, we saw the environment take centre-stage, euroscepticism get quietly tucked away and centre-ground political thinking forced onto a somewhat reluctant group of MPs. It was necessary, but it was a bitter pill to swallow. Nevertheless, the Conservative MPs on the benches behind you in the House of Commons soon realised that you could deliver a Conservative government, and for that reason alone they kept their mouths shut (most of the time). However, your inner cabal of strategists, image gurus and modernisers did not have it all their own way. On several occasions, including the election campaign itself and the election that never was in 2007, your closed circle came under huge pressure from the electorate and your own party. Yes, they survived, as did you, but only just. As we approached the recent general election, voters were still unsure about who you were and what you believed in, which is staggering after five years of leading the opposition. Your desire to keep your cards close to your chest and deal purely in intangibles and soundbytes almost cost you a place in 10 Downing Street. The public don’t like feeling uneasy about potential Prime Ministers, yet they were fed uneasiness in spades. Despite all the funding you could have asked for and a crippled government, it so nearly went horribly wrong.
Here we are, just a few days later, witnessing a truly historic coalition between you – a liberal conservative – and the Liberal Democrats. Ironically enough, everything is completely different yet little has changed. You still have a group of MPs who will be sitting behind you, watching, waiting, holding their nerve for as long as possible in the hope that you can deliver a truly successful and admired Conservative government. Common sense tells them to keep quiet rather than voice their anger and irritation. You will have your inner cabal with you in government as they were in opposition, making decisions that affect everyone and everything despite having shown their incompetence on more than one occasion. Moreover, the coalition deal has put many of your favoured issues – social justice, a green economy, civil liberties – at the heart of your plans for government. You didn’t hide your disappointment at not getting a majority in the House of Commons, yet you have gracefully and seamlessly organised a historic coalition with another party. The question on everyone’s lips now is, naturally, will it last? I have no idea what the answer is to that question, but then again neither do you. What I find interesting, though, is not that things could go well or go badly – that is just stating the obvious. The most incredible element of this coalition is the breathtaking gulf between the best case scenario and worst case scenario for you and the Conservative Party.
The best case scenario for 2015 is simple enough. The economy will be growing at a healthy rate and both unemployment and economic inactivity will be reduced. The welfare state will have been transformed by supporting people into work and punishing those who chose not to get a job. Our broken society will have begun its long healing process through stronger families, good schools, lower crime and genuine localism taking hold. Government waste will have been largely eliminated and the state will be much leaner and fitter than it is now. British people will be put first, civil liberties will be untouchable and immigration will be severely curtailed. People’s faith in politics and politicians will have been mostly restored. The Lib Dems will have kept their end of the deal, leaving themselves with absolutely no electoral appeal relative to the Conservative Party and facing annihilation. The Labour Party will be rife with infighting and weak leadership, making them virtually unelectable given your strong performance as Prime Minister and with the memory of Tony Blair and Gordon Brown fresh in many people’s minds.
The worst scenario, however, is nothing short of disaster. The coalition falls apart within months as the Lib Dems walk away, accusing you of ignoring them and not delivering on promises. You look weak and indecisive, with your own party demanding tougher action on any number of issues. The Conservative grassroots refuse to campaign because you and your inner cabal leave them disillusioned with pointless platitudes and non-traditional policies. The economy staggers along, still badly wounded, and public sector cuts push unemployment in the wrong direction. The voters ignore your pleas over the necessity of cutting government spending while every policy announcement is met with scorn and cries of ’spin’. Your school reforms and localist agenda stumble and fall. Your welfare reforms leave you branded as abandoning the poor and needy. Uncontrolled immigration continues unabated and the anger spills over onto the streets. Your pro-EU stance forces some backbench MPs to break ranks and speak out against the party line. Labour regroups and, as the only strong opposition party, lap up your failures and convince the floating Lib Dems and disgruntled Conservative voters to join them. Electoral defeat is little more than an inevitability.
My political crystal ball is of no use. For the life of me, I just cannot see where this will all end up. Neither the best case scenario nor the worst case scenario are implausible, outlandish or inconceivable, yet the two scenarios are a staggering distance apart. The only thing that I can say with any certainty is that the future is very uncertain. The history books will remember the next five years of British politics as one of the most incredible periods in living memory. I just can’t decide whether that will be for better or for worse.
Good luck, Mr Cameron. You’re going to need it.
Yours sincerely,

Wise words, wouldn’t you think?

I’m not going to link through to the source site of this article because it’s now officially (so I’ve been told) dead.

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Dow crashes 1000 points in 15 minutes on Greek/EU debt crisis. Wall Street thought it was a computer malfunction. It wasn’t.


Source: CNBC

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I was surprised to learn from Sky News this morning that the latest general election economics debate, if I heard right, will be between George Osborne, Vince Cable and…er…Peter Mandelson.

Hang on a minute, do they mean Lord Peter “We’re all fighting to get re-elected” Mandelson, Business Secretary (among many other hats)? He’s not Chancellor of the Exchequer as well these days is he? That’s Alistair Darling, isn’t it?
Have I missed something? Has Darling come down with an inexplicable stomach complaint (soon after having tea and crumpets with the Evil One yesterday afternoon, no doubt)?
If I haven’t missed something, however, but there’s no highly suspicious sudden sickness involved (it’d have to be a pretty serious affliction to force you to miss your own debate seven days before the election, wouldn’t it?), then we are all entitled to ask a grave question about this very fishy affair: where the hell is Ali?
I think we should be told.
PS: If someone knows, by the way, why Darling has been elbowed, do let me know in the comments.
I wonder if George knows…
Not entirely my fault because this wasn’t made clear on the news – or I was half asleep – but the three mentioned above are all giving speeches to the Institute of Directors today, not debating, according to Sky.com.
Even so, the question remains: where’s Darling!
Or, looking at it another way, why not send Clarke into bat against Mandelson instead of Osborne whose eyes, let’s face it, are probably still watering after being on the receiving end of a couple of severe spankings in the past administered with thinly disguised fetishistic relish by the Lord of the Lies.
Ken Clarke, in contrast, owns Mandy’s ass.

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