Archive for March, 2010

Tuesday, March 30th, 2010

Election Latest

There is a definite shift upwards, but only slight, in the Tory lead since the budget. It is not enough on an average, spread among both polls and seats, to give Cameron a majority. He would have twenty more seats than Brown and could form a government with the Lib Dems. He could try go it alone but with thirty seats short of a majority, it would be hardly the kind of  stable government we need right now.

These polls do not yet show how the promise to halt the rise in NI contributions for middle earners has been received by voters. It may edge the Tories further forward, but if voters believe opposition cries that the money is not there, or should be used to reduce the deficit, it will not help. It will be a useful test of public sensitivities to see what happens. The Tories will hope that even if not dramatic in itself, it shows they are on the right path. If voters fear even bigger cuts in public services affecting them, it could fail and become yet another muddle.

Last night we saw the debate of the three potential Chancellors. None shone sufficiently to dazzle, all came through without disaster. Cable won the debate by quite a margin and is the clear choice of the majority of bloggers. It will be interesting to see if this produces a Lib Dem surge. If that happens both Labour and the Tories will be at sea without a compass. The election will be wide open.

Monday, March 29th, 2010

The President’s Visit.

With almost no warning President Obama popped up in Afghanistan. Security was given as the reason for the minimal notice of an hour. I suspect seeing things as they are, before bad stuff could be hidden, was much the more powerful motivation for the sudden arrival. When dealing with one of the most corrupt governments in the world you have to be savvy. 

This vist has enhanced the President’s stature still further. The troops loved it. There was tough talk for the Taliban, though both they and the President know they will sooner or later have to talk together. He knows too the greater the military squeeze his Generals can exert the more pliant the Taliban will be as partners in a peace deal. The blustering about Al Qaeda was just jingo to soothe the ears of Sarah Palin’s supporters. He knows that the terrorists can just go somewhere else. She, who had never heard of Afghanistan until she put herself forward for national leadership, will not counter that. She is too busy saving freedom. Freedom to go bankrupt trying to save the health of a loved one. This is just the same freedom needed to keep slaves or operate segregation. Palin who knows so little, does not know that. 

Her President knows that freedom brings the responsibility to care for the plight of the less fortunate and  to act to ease their burden. Otherwise freedom fades away.

Monday, March 29th, 2010

Tory Tax Plans

At last we have a policy to look at. The plan to halt the rise in National Insurance on middle earners is a bold move to please employees and employers alike. It falls within Tory philosophy, as a low tax party. It is not a cut. It is a rise stopped. The question is how to pay for it. There is a shopping list of savings planned, but how real or how imagined is not at first clear. Making the sums add up credibly will be critical in determining whether this plays as a bold move well received or another mess up from a team lacking experience.

The whole economic world proclaims that our level of Government borrowing has got to be reduced. There is argument about sooner or later but none about if. There are two ways open. Increase taxes or cut spending or do both to some extent. This is not quite right.

What is required is revenue.  What the tax rate is and upon which group the tax falls is of political, not fiscal, significance. What matters is the flow of money. If taxes go up but people work and spend and save less, economic activity will stall and the exchequer will be no better off. It is possible (for example Howe in 1979/80) to cut taxes and increase revenue. Howe managed this by reforming the relationship between tax on incomes and tax on spending. In my book I have proposed a major simplification of the tax system which would have great revenue increasing possibilities, yet would make millions better off in real terms. None of the parties really have put forward any radical ideas, so we are bogged down in efficiency savings, empowering people and so on. In fact voters just worry about their jobs and wonder who to trust.

We also do not properly explore this fallacy that going on borrowing more and more somehow lets the economy off the hook lighter than if we cut sooner. More borrowing means a much higher interest bill in future years, which has to be paid first, before everything else. As this proportion of government expenditure is forced upwards, it draws money out of the domestic economy to overseas creditors and exerts significant downward pressure of spending on everything else. Less and less of each tax pound is free for the government to use for our benefit. This is exactly the same as any over borrowed consumer. Lose control of this now and the result will be years of austerity. Current figures take us very close to the edge, if not over it.

It should be possible for the Osborne team to set all this out and show how they can do a better job than Labour. We are still waiting. Telling voters they will axe a few dumb programmes and empower enterprise is not enough.

Sunday, March 28th, 2010

Weekend Polls

Still not much changing. Labour have slipped a bit here and there. It may be the Budget is not playing well, or it may be the strikes or various combinations. I doubt their new pledges will have any impact at all, but the little cards will be good tools when canvassing and if that becomes more effective it will be help them.

The News of the World has declared for Cameron along with its sister paper the Sun, which went Tory in the Autumn. This makes the Tory inability to break out of the upper thirties percentage of projected votes all the more surprising. The latest average of the polls puts them neck and neck with Labour on seats, with the Lib Dems holding the balance of power, able to provide a clear majority to either party. That balance of power is just where they want to be.

One must imagine the campaign is going to hot up soon. So far for Labour and the Lib Dems things are going according to plan. The oddity is the way out favourites at the start, the Tories, are bogged down. Could it be Ashcroft’s heavy baggage causing them to sink in the mud? Or is it that voters hear what they say but do not know what they mean?

Sunday, March 28th, 2010

Nuclear Proliferation

Of course it would be better if nobody new acquires nuclear weapons. It would be best if they did not exist. Confrontation and censure will not achieve either of these goals. There may be some subtle changes in the Obama administration’s approach, but American public opinion remains gung ho. Whenever some guru or think tank boss in the U.S is interviewed for one of the British news channels the message is always the same. We have to stop Iran acquiring them and we have to control North Korea.  Now they add Pakistan to stop it either using them, or giving bits to AlQaeda to build a basic terrorist bomb. This is going to get nowhere.

The essense of control is deterrence. It makes no difference if Iran has the bomb. It just needs to know that if it makes a first strike it will be wiped of the face of the earth not just within hours but within minutes. This applies to everyone else. Including North Korea, Pakistan, Israel or even the U.K.  The U.S, Russia, the U.K, France and China working in concert, can deter any first strike anywhere by a rogue state on a neighbour unable itself to retaliate in kind. That is much more effective than sanctions. It is the diplomacy of the dim witted to suppose that Iran, facing Pakistan and Israel, both nuclear armed, is going to accept that it is a morally inferior country which should not be allowed to protect itself with deterrent capability, unless somebody else offers protection.

Where was the U.S when South Africa, Israel, India and Pakistan made their bombs? Nowhere. It did not care because it was of no practical significance in strategic terms, even if it was undesirable. What has changed? The answer is 9/11.

It is the continuing failure of the U.S to understand what 9/11 actually was and what it actually meant that places the U.S at risk, together with its allies of some kind of nuclear attack by terrorists. France has said that any such attack on it will trigger a nuclear response, presumably on the country perceived to have helped Al Qaeda build its weapon. This may not be that easy to determine, but it was the right response. In fact the attack, if it comes, would most likely be on several countries at once and not happen until the terrorists have about six weapons to guarantee maximum calamity. It may not happen. It need not happen. If America was less agressive, less arogant and less in thrall to its military and their cheerleaders in politics and academia it would not.

9/11 was organised to teach America a lesson that those inferior people in its eyes, the Muslims, were not going to be trampled underfoot like the so called Red Indians and exploited for their oil to feed the energy gorging of the most prolifgate people in all of history, nor were they going to be humiliated like the post cold war Russians, nor made to live in squalour generation after generation under the heal of America’s puppet Israel. Never before in history has so self righteous a country as the U.S. been so wrong about so many things in the belief that it was right in all of them.

The lesson has not been learned but there are straws, just a few, in the wind that a learning process is beginning. Meanwhile the Commons Select Committee of M.P.s has recommended a less deferential relationship to the U.S and the dropping of the term Special Relationship, which they feel is overused and devalued. I agree. America is, historically family, but, as in all families, we can go separate ways. We also need to teach America that lesson. They should climb off their high, arrogant, horse and listen to us. Better our admonishing voice than the nuclear flash of Al Qaeda. For all of us.

President Obama knows all this. That is why he is so angry with Israel. Americans need to back him to the hilt.

Saturday, March 27th, 2010

Barak Obama

President Obama has changed his political fortunes in three bold strokes, re-invigourating his Presidency and showing his country and the world that he is made of much tougher stuff than a good many of his predecessors.

First it was doing the deals that pushed healthcare through. Next getting tough with Israel, something which should have happened a very long time ago. Finally warhead reduction with the Russians. All this shows two things. One the President can make things happen and is willing to go the mile. Two he understands that to have influence in the world the U.S has to back what is right and if that means slapping down favourites he will do that.

This is very refreshing. Such a contrast from the agressive, boasting, bullies of recent past. The President now walks tall.

Friday, March 26th, 2010

Labour and Strikes

So far there is no hard evidence that this wave of industrial militancy is affecting Labour. A slight drop in its support today could be just as easily caused by the budget. We need to wait until after the weekend to see if there is any new trend.

There is, though, an interesting thought. Yesterday I said that voters may be covertly sympathetic to the unions, because they hate the bankers, who are at the opposite end of the ideological, social and income scale. It is also a fact that no voter under fifty has any real recollection of the impact of the bad old days of never ending strikes. This may give Unite and RMT confidence to tough it out. There is a danger for them in this course. Although the BA strike is spectacular and media friendly, it actually does not affect all that many and most of those probably vote Tory anyway. Shutting down the trains during the working week could change all that. Public anger may then rise and turn on Labour. No doubt the Tories are hoping for this. 

I am not averse to the unions regaining more control of Labour and moving it to the left. We do not need two centre parties. It does not make for dynamic politics. Moreover the less fortunate lack a champion and turn to extremist alternatives. The balance of a heavy centre gives a sluggish outcome. Labour is not really very good at centrist politics. Its solutions are too bureaucratic and big government. This is Tory territory. Because Labour successfully elbowed the Tories out, for a time they retreated right and became unelectable. Now they are back at the centre, they seem unable to escape Labour’s shadow. They must do that.

For Labour to return to its true purpose of protecting the interests of the mass of the population, whose daily effort is the foundation of viable society, would be worthy. Its core values would be restored. It has done badly with those as New Labour. The gap between rich and poor has grown. The underclass has burgeoned. The party supposed to prevent this has neglected its patch. To reclaim its territory it may have to go through defeat. As it re-constructs itself on capital provided by the unions it must make sure that its financial backers do not return to the reckless ways of the years that ended in their historic defeat of 1979. Look at any inner city ghetto, or any derelict industrial site. There you will find two roots. One of the disaster of trade union militancy which caused the problem and the other of unrestrained market led capitalism, which offered the solution. We now know that the one was as bad as the other.

Thursday, March 25th, 2010

Which way is the Election going?

The latest poll to which I have access, You Gov March 24th (yesterday) sampled before the budget but after the latest scandals puts Labour at 36%,the Tories at 38% and the Lib Dems at 17%.. The UNS (uniform swing) projection is for Labour having one less seat than the Tories and the Lib Dems holding the balance of power with 48 seats, sufficient to give either a majority if it joined a coalition.

This all makes good reading for Labour, who seem uninjured by their recent prangs and trade union militancy;  even helped by the latter, maybe people now prefer the unions to the bankers. It is very good news for the Lib Dems because it puts them on course for full participation in government for the first time in living memeory. However polling day is still weeks away, there have been no manifestos published and those historic T.V debates have yet to come.

This blog has repeatedly flagged key opportunities for the Tories to break through and is surprised that they have not done so. The Tory high command should be worried. No opposition party has been dealt so favouable a hand for decades. What is the problem? There could be many. I will offer two.

In the big moments since the WWII when the country went for real change, 1945 and 1979, there was a clear ideological challenge to the accepted way. With Attlee it was socialism and with Thatcher it was monetarism which later expanded to Thatcherism. In between the pendulum swung this way and that across the ideological divide of socialism versus a welfare state version of capitalismin which free enterprise operated beside state control of some industries and all utilities. When the country changed government there was a clear sense of moving from the one side to the other. Now the two main parties are esessentially two conservative parties, with a centrist perspective on all things and differences only in detail, some of which is too obscure for voters to bother with. Each has different roots, but both lean to the light, which is in the centre. The main difference is that Labour prefer to deliver though a big state and big government, the Tories say they like a smaller state and less government. To the voter there is not enough difference  to risk a change. Unlike 1997 when the Tory Government was in crisis (although the country was sound) and change was necessary, this time the country is in crisis but the Government appears to many to have done rather well. Why change it?

It is the answer to this question of why ? which the Tory party has thus far failed to provide with any clarity. It has to do so to stand any chance of an outright win. Otherwise the best it can hope for is to govern on terms demanded by Nick and Vince.

Wednesday, March 24th, 2010

The Budget

When you sweep away the theatre and the rhetoric, not much changed in the budget. The critical point appears to be that the reduction in borrowing from forecasts because of higher revenue has been retained and not given away, so borrowing requirements overall are reduced and that should please the markets. Darling has certainly not lost the election today for Labour, neither has he won it either. Cameron gave a good Parliamentary attack performance, but nobody is any the wiser what the Tories would do if they win. The opinion poll stalemate is unlikely to be changed by what we know of either of the main parties’ intentions, if they have to really get down to business after the election. Indeed we know little or nothing of the specifics.

We do know that nobody offers a true reform of income tax and its relationship to vat, a means of controlling house prices, a reduction in housing costs as a percentage of income, a shift from the financial sector to science and industry as a proprtion of economic activity, an increase in saving and a reduction in personal borrowing, a moving of the green economy to centre stage or the re-casting of the economy to a more socially just model. Nor is there a frank acceptance that at 52% of the whole, the state sector of the economy is far too large.  There are bits and pieces around from all the parties which  do things here and there to help, but these are small beer with no coherent plan.

There is still the danger that we come out of recession with the same economic model that took us in, with just a few refinements at the margin. Such a bodge will have only one outcome. Long term decline.

Wednesday, March 24th, 2010

Political Integrity

We had the expenses scandal. Last weekend a new outrage was uncovered. Sleazy ex-ministers trying to sell their services,  according to one like ‘a cab for hire’. I am not sure that was the right analogy. Now it turns out there are regular junkets all over the world, paid for by foreign governments, in return for lobbying and promotions when back in Westminster. Loads of MPs are mixed up in it. Cries about rules and disclosures fly in all directions.

This is no longer about rules or regulation. It has gone way beyond that, although there will have to be both. It is about the integrity of politics, the honesty of government and the function of parliament. Many voters did not know that ex-ministers earned thousands a day whispering in the ears of colleagues still in office, hoping to favour the interests of whichever corporation that day (the fees are by the day apparently) they have been paid to promote. Neither did they know that their M.Ps, sent by them to Westminster to look after their constituents’ interests, were in fact having a good deal of fun in paradise settings looking after the interests of tourism in India, Cyprus, the Maldives and so on.

These revelations both appall and dismay. How can this be happening in our country? Who has let this utterly preposterous gravy train of self indulgence, corruption, exploitation, self interest and dishonesty take hold of the heart of our democratic structure? Who exactly are these people who con us into voting for them? What are their motives? How can we believe anything they say?

Some answers are needed. We cannot go on like this. Maybe we have focussed too much on sex scandals, which are as old as history and relatively harmless, when we should have been looking where we thought we could place our trust without fear. Well now we know.