Archive for June, 2017

Interest Rates: Up or Not?

Thursday, June 22nd, 2017

This Blog has always been an interest rate hawk. Indeed worse than that. I believe, unlike almost every economist anywhere, that control of currency and interest rates by central banks has been a mistake. It has had advantages for global business, but its impact on ordinary lives has been negative, the gap between rich and poor has grown and that squeeze on living standards is creeping up to the middle classes. That produces political unpredictability, unexpected election outcomes and a creeping tide of uncertainty, which in the end, is not only bad for business at every level, but bad for everybody else too.

At the heart of a well balanced economy must be the power to create new wealth. That wealth must produce a profit at the corporate level, but it must also show a profit for ordinary foot soldiers right across the economy. The surplus of income over living costs should in part be invested in improvement and part saved to provide for a rainy day. These savings are the source of new capital to finance further economic growth. But if the return on saving is tantamount to nil, it dries up. Instead replacement money is pulled in from international markets, most of which is now the product of quantitative easing by the US, UK and EU.

This is used not to create new wealth, but to pump up assets. That makes the rich richer and the poor poorer. The crunch comes when it begins to pull the aspiring middle backwards towards relative poverty. That is happening now. In the US it gave us Trump, France has Macron on a voter turnout below 50%, a shocking statistic for a democracy noted for high voter participation, and in GB it gave us first Brexit, then the shock outcomes of the Corbyn surge and the May humiliation.

It is imperative that interest rates begin their slow climb back to viability, as a necessary spur to saving and an effective lever of prudent economic management. Failure to act will create a combination of social and economic volatility which could easily slide out of control.

Democrats Lose Again: Are They On The Right Track?

Wednesday, June 21st, 2017

The answer must surely be no. For whilst the entire Democratic party in Washington is drunk on the Russia connection in all its forms and manifestation, prosecutors, investigations and committees, there is a country out there with people in it who need looking after. They are Americans, so they do not need spoon feeding and they are averse to too much Federal Government. So is spite of everything the core support of President Donald Trump remains firm. More people want to get rid of him if the polls are to be believed, yet when votes are counted it turns out not to be so. The Democrats mounted a huge campaign in Georgia to win a suburban congressional seat in Atlanta and in spite of spending record sums on their campaign, they lost. In South Carolina they lost again.

There are two Trumps in the White House. The wild card twitter junkie who says whatever pings through his head whenever, shocks the world, perplexes staffers, annoys the media and turns the Democrats into hysterics.  And there is the America First deal maker who quietly works away fixing things to make the lives of the ordinary people in the beating heartland of the American dream, better. Mostly it is done by Executive Order, but one way or another it is done and things are getting not just better, but much better.

So long as the deal making continues this way, no matter what the world across the oceans thinks, or what the pantomime on Capitol Hill does, Trump will move relentlessly forward through the mid term elections, on to 2020 and into his second term. The Democrats could stop him if they came up with a better plan. Likewise if pigs had wings they would fly.

 

 

Strong and Stable? Weak and Wobbly!

Tuesday, June 20th, 2017

As predicted in an earlier post, the DUP is playing hard ball and no agreement is yet reached with the tottering May. It is also the case that, behind a carefully arranged veil that the argument could be about money, it is more to do with the political risks of propping up a government short of a majority, split from top to bottom and toxic in the country. Should it topple, those attempting to prop it up could be crushed by falling debris at the next general election. The alternative is to allow a Corbyn minority government with broad cross party support, to get the country back on its feet, then to go into an election sweet and clean.

Meanwhile the Chancellor and the Bank Governor make speeches in  the City which are diametrically opposed to what was thought to be the government line on Brexit. This indicates not just a split in the Cabinet, but a growing power base of soft Brexiteers within the government, parliament, business, the Unions, the City and the rising generation, which talks of Brexit which puts jobs and the economy first. Taken literally that means no Brexit, but in practice it is a kind of Brexit which amounts to the same thing.

All eyes on the Queen’s Speech, in scaled down ceremonial in accordance with the sombre mood of the nation. Whether Her Majesty’s Government will have the opportunity to advance its proposals into action depends on what happens in the Commons over the next following days.

National Emergencies: A Management Gap

Monday, June 19th, 2017

If there is a terrorist incident or some other threat or event involving national security, there is a seamless response programme which mobilizes all relevant services under the COBRA umbrella, delivering exceptional outcomes in often challenging and heartrending crises. But we have seen several instances of what might be called civil threats, for example the Foot and Mouth outbreak, sudden floods and now the terrible Grenfell Tower disaster, when the initial response at best has been far short of what was expected and where victims have been left to struggle with little support.

This is not good enough and must change. Cobra’s reach must be extended or a new civil authority must be set up to mobilize, coordinate and rehearse the responses of all civil authorities to unexpected events which leave victims traumatised and thus far it seems, authorities, beyond emergency responders, paralysed. We disbanded Civil Defence as the risk of World War Three receded. Now we need something to replace it, tailored to the times in which we live.

The End Of An Era: Thatcherism Is Over

Monday, June 19th, 2017

The political landscape has so many different aspects that to blog about the whole picture is too complex in a reasonable length post. So I shall be making a number of key points over the following days. Readers can join them up or just remember the things that grab their attention.

Today let us take an overview of where we are. The Winter of Discontent in 1978/9, when public sector workers went on strike creating mountains, literally, of rubbish piled in public places and the dead were left unburied, was the final expiry of the post war settlement in which the state was the primary player in the life, economy and well being of the nation. It was clear the state had failed. In came Thatcher and everything changed.

The state was elbowed aside by free markets, there was no such thing as society, the individual had primacy over community, nationalism gave way to globalisation, industrialisation was dumped in favour of asset acquisition, jobs were exported and everything we used imported. Saving was abandoned and borrowing became a contagion.  A whole generation of politicians and public officials grew up who knew of no other way.

It is not necessary now to list the glaring failures of that collapsing model. There have been warnings. Corbyn and Brexit. But the final and horrific sign that it is all over, is the terrible spectacle of innocent men women and children being burned to death in a public housing tower, because nobody would listen to their pleas that the building was a fire trap. And if that were not enough, the gross incompetence of the civil authorities to respond to the aftermath has unleashed a tide of anger which cannot now be turned.

Just as the Thatcher era was founded by a very clever woman who had the ear of the people and read them with skill, could get things done and win election after election, so it is that as it all implodes, there is in Downing Street the next clever woman to hold the top office. But there, as we all know only too well, the comparison ends. As is perhaps fitting.

This Has To Stop.

Monday, June 19th, 2017

Once again we find ourselves expressing horror and sharing the pain of the victims and their loved ones caught up in tragedy. We are familiar in these islands with violence between Protestant and Catholic. We have suffered terror attacks from a perversion of Islam called IS. We cannot now go down the road of attacking Muslims in revenge. The white van assault on Muslim worshipers in Finsbury Park is terrorism pure and vile. The whole country condemns it. It is unnecessary and cruel. There must be no more.

Are the Tories Toxic? Could The Government Fall?

Friday, June 16th, 2017

In a period when political developments cascade down at unprecedented speed, there is now a whispered question, could the government fall at the end of the Queen’s Speech debate? On the face of it, the answer is no, because the DUP will prop it up. But those cold political maths ignore two new elements. The split in both the Cabinet and the Tory backbenches between hard and soft Brexit, which is now so pronounced that the Chancellor is openly declaring a position at variance from the government. And the gathering surge of public anger and national shame over this terrible fire.

The first suggests a government in something not far short of chaos on its core policies. The second is that the death by burning alive of perhaps 100 innocent men women and children in a public housing block is revealing many threads to guilt, but the most damning leads back to Whitehall and this Tory government, in power since 2010. Because when all is said and done there will be two prime causes; inadequate regulation of refurbishment standards and too little money available to do the job to the highest safety standards.

The signs are already there. It is thought that the DUP are playing hard ball. But if you listen very carefully to what they are saying about not being interested in the Queen’s Speech and the fact that they have still not agreed final terms, it looks more to me as if they are walking to a safe distance from a government which has become toxic. They fear, and remember they are perhaps the most intuitive politicians in these islands, that when the reckoning comes, any small party in association with the Toxic Tories will become toxic too.

This is not a prediction, but it is a sharing of thoughts with loyal readers. I may have overworked the analysis and got it wrong.But there is a very real possibility that when the vote comes at the end of the Queen’s Speech debate, no smaller party dare support a toxic government and a prime minister whose poll ratings are already as low as Corbyn’s before he began his meteoric rise. He could be Prime minister sooner than we thought.

Tim Farron: The Right Choice

Thursday, June 15th, 2017

In a country numb and overshadowed by the terrible events at Grenfell Tower, the news of Tim Farron’s resignation has passed almost unremarked. But as political resignations go, his reasons were unique in modern times. Once politics and religion were one. But now within formerly Christian societies, this is much less the case. In England particularly, Church and State, whilst still joined constitutionally, are very much separate in practice. And rightly so. This blog believes in a secular society and is opposed to faith schools, whilst defending the right of every citizen to believe in any faith and practice any religion, so long as nothing that the faith preaches harms others or is a promotion of acts or attitudes which are against the law of the land.

Tim Farron has been an honest and open party leader for the Liberal Democrats. He articulated with a good deal of clarity unusual in modern politicians, ways forward which were not always down the popular road. Without him the debate will be less interesting. But it seems his faith lead him down a path to conclusions which this blog considers shocking and deeply offensive to the people of our country who are outside his muddled understandings of virtue versus sin.

He is right to go. He must now decide whether he wants a career in politics or religion. In these times, now, he will find it difficult pursue both. With his homophobic thoughts that is as it should be.

This Terrible Fire: A Point Of No Return

Thursday, June 15th, 2017

If it is possible to imagine something worse than screaming families being burnt alive in a raging tower block inferno, this Blog cannot think of it. The whole country is transfixed with shock and dismay that something which all thought was impossible, has happened. But following upon the desire to help, contribute, shelter and comfort which flows down to North Kensington from every corner of the British Isles, there is a rising tide of anger. Anger that this did not need to happen.

Anger that repeated entreaties from residents that something should be done to deal with obvious fire risks were ignored by authorities at every level. Anger that parliamentary warnings to ministers to regulate standards of refurbishment which have a lower bar than building standards, were ignored by this Tory government. Anger that never ending austerity and cuts to local authority funds have meant poor supervision and inspection. Anger that contractors and others directly responsible for this unprecedented calamity are hiding behind compliance with regulations to justify the institutional manslaughter of innocents.

For it is a fact beyond denial, widely filmed and witnessed, that a building said to be constructed of fireproof boxes designed to ensure fire could not spread and which, like others, had for years stood secure in this belief, after a refurbishment carried out by a cash strapped council using bargain basement contractors, one of which has already gone bust, became a flaming torch, an upward raging firestorm, burning from within and without, incinerating an unknown number of residents in the greatest domestic horror seen here since World War Two.

Inquiry will reveal guilt. For the guilty a day of reckoning will come. For the bereaved their suffering will never end. For those who, helpless, witnessed terrible scenes, those images will never go.

As for austerity and its clammy outriders, a small state, light touch regulation, outsourcing, cuts and toothless quangos, the day of reckoning is now.

It is over.

Oh No! Another Disaster

Wednesday, June 14th, 2017

The fire in Kensington is horrific. I had no idea these tower blocks could go up like a torch! People are missing. One dare not think what the death toll may be. Once again this nation will have to stand united in grief. The thoughts of the whole country are with the victims and their loved ones, those traumatised who managed to flee and with the first responders and the emergency services upon whom we so much rely.