Blog 2023 Malcolm Blair-Robinson

Changing Tide

There are times in history when retrospectively a moment is seen when the tide of events begins to flow in another direction. For example, Gettesburg, seen as a stalemate or draw at the time (Lee’s army withdrew intact at its own pace south, while the Union remained on the field, but too mauled to pursue; Lincoln was furious) is now seen as a great Union victory, because it was clear from that moment on that the South could not win the war. It took a further two years for the North to prove it could win, but that July day was the moment when fate pointed the way.

The Summer of 2010 will be seen as the moment when the people of this country lost faith in the politics of  military force. Iraq has no agreed government following its general election months ago and violence increases. The country has not even a power supply to last the day. What is going to happen next nobody knows. In Afghanistan the strategy is unravelling while casualties are  rising. Safe areas are found to be unsafe after all.

The critical fragility of Pakistan as a country, laid bare by monsoon rains and the ambiguity of its key institutions, forced into the war on terror against the will of far too many moderate Pakistanis, is exacerbated by the terrible suffering of so many of its people in the floods and the curious detachment of its President wafting in luxury around Europe. However Pakistan and Afghanistan accommodate each other and eventually settle down, one thing is now clear to those willing to see; it will not be by the path proclaimed from the Pentagon, Nato Headquarters or  the MOD.

There is more. The extraordinary hostility to BP, notwithstanding the disaster which in the end, considering the challenges, it appears to have managed quite well, and the irrational hysteria over the release Lockerbie bomber has left a bad taste in the U.K. The continuous reference to British Petroleum, although its U.S. management and half its shareholders were American, was spiteful and unpleasant. The preposterous invitations from those Senators, to attend before them in supplication to answer questions, of Ministers and ex- ministers of the U.K and Scottish governments, united all elements of the country in hostility.

Most telling of all was the definition by Cardinal O’Brien that Britain has a concept of justice based on mercy and compassion while America is focused on vengeance and retribution. In those brave words the Cardinal struck a chord with the multitude. Nothing in future transatlantic relations will ever be quite the same. This does not mean that the U.S will not plot an attack on Iran or get in a fight with North Korea. These and other as yet unforeseen adventures are variably possible. What is becoming clear is that British politicians will find it much harder to carry the country with them if they decide to join in. Indeed public opinion may force fewer cuts to services and more to the military, removing their power to join in anyway.

We shall then concentrate our defence resourses on systems to defend our island homeland come what may. The strategy which has kept us free and independent for nearly a thousand years since the Norman Conquest, is based on the simple principle that we are too tough a nut to crack. In the crises of the Spanish Armada, Napoleon, the Somme and the Battle of Britain, the Americans, come to think of it, were nowhere to be seen.

Pakistan

The scale of this disaster is said by the U.N. now to exceed the tsunami, thought not, mercifully, if measured in loss of life. The world is slowly stirring to the need for aid on a gigantic scale. Those images of shivering and frightened children haunt us. And it goes on. The rains do not stop. There will be an end to this suffering, but as yet it is not in sight.

The suffering reminds us of true human needs and the values which should underpin them. There are reports that the Taliban and charities linked to Islamic militants, have been active in getting aid through. They may be better equipped with their own simple transport system, relying on foot, pack animals and small motorbikes to cope  with the ravished communications. Whatever the fervour of the armed conflict and however cruel the justice and social values of this alien (to the West) culture, it is good to see that humanitarian aid is unfettered by the issue of from which side it comes.

House Prices

These are falling again. This is good news. They need to fall a good deal more. I realise the pain and distress this causes to those who are over borrowed, earn their living in the housing market, or are in the replacement kitchen industry. But we cannot get away from the fact that another housing surge with increased personal debt will lead to another crash. Neither can we get away from the fact that housing costs are too high to allow earnings to operate at levels which will make industry competitive and public services affordable.

For too long we have spun ourselves into a trance of believing that an economy based on debt and shopping was prosperity. We invented new meaning for old words. Debt became credit, spending became investment, borrowing more became equity release. This is why the total of private and public debt in the U.K. is the second highest in the whole world and, as a percentage of GDP, five times greater than that of the U.S., which is the biggest borrower of all.

The scale of all of this and the inherent problems it causes is way beyond anything which nervous politicians, muddled economists or hated bankers have admitted to. Like the cost of the second world war it may take sixty years to finally pay for. To survive at all financially, we will have to take much pain and slowly rebuild our economy on sound asset valuation, sound money, net saving and above all real wealth creation not derived from asset inflation.

We need to learn that cautious bank lending and falling house prices are good signs. We will have to learn on our own because nobody is going to have the political guts to teach us.