Archive for July, 2017

The Economy : Ominous Signs

Monday, July 24th, 2017

Growth appears to be slowing. Government borrowing is up. There are mixed signals coming from the government about almost everything. There appears to be a softening on Brexit. Meanwhile the EU’s trading position grows stronger with free trade deals with Canada and Japan and soon with Australia and new Zealand. So the market we are trying to cut ourselves adrift from grows ever larger.

There are now trade talks by the UK beginning with the US, but at the moment their scope and objectives have not been made clear. What is clear is a growing realisation among hard Brexiteers in the government that the whole Brexit thing is far more complex than it looked and that even the most ideologically committed will have to face stuff they do not like. The rest of the country is holding tight and hoping for the best.

In a situation of such uncertainty, with new investment drying up, it is kindergarten economics to say that the government now has to step in and give a real boost to the economy. Not just in infrastructure and government projects, but in a re-jigging of the economy towards home manufacture of all the things we use. A consumer driven economy fed by imports has to become one fed by home production, whatever the outcome of the various negotiations, but especially if we get anywhere near WTO tariffs. Such an initiative would include funds for start ups and deals for overseas manufacturers to set up assembly plants in the UK supplied by home produced components. This would transform career opportunities for the  young and provide much better paid jobs than delivering pizzas.

So it is up to this fractious Cabinet to get real and get down to the serious business of economic reform. Without it the future will become increasingly dark as the tax base shrinks and costs go up. So far there is no sign to give hope. But perhaps the summer break and warm prosecco will stimulate a sharper vision.

Hess Secrets Revealed

Monday, July 24th, 2017

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America’s Worst Enemy?

Thursday, July 20th, 2017

Not Russia. Not China. Not IS. Not even North Korea. No, Washington itself has become America’s worst enemy.

The country has elected a President whom some love and others hate. He won because he spoke to millions of Americans whom the political class had forgotten. He has some good ideas  some bad ones. He is unversed in the protocol of politics and has a novel approach in his methods. But Trump is the elected President and he should be allowed to govern. The American system of government is designed to ensure that there are checks and balances so that neither the Executive nor the Legislature can have a free hand. It was written carefully and after much thought by adults who wanted to chart a better way of governing. But the system they devised, which has hitherto been a beacon for the idea of democracy in the advance of human freedom and self expression, demands that it shall be operated by grown ups, measured and wise.

Somehow it has fallen into a state of paranoid hysteria. The President cannot govern according to his mandate. The Legislature cannot agree on its own proposals. The Russians are blamed for everything. The interests of ordinary Americans are being lost in the turmoil. The rest of the world is astonished. And there is no resolution in sight. But sooner rather than later America has to get a grip and move on. Trump has ploughed forward using executive orders and bits of congressional legislation which gives an impression of happening things, but key issues remain unresolved. These are important because they are promises made to his core support which Trump must keep.

Replacing Obamacare

Cutting Taxes

Building New Infrastructure

Repatriating Jobs

Improving Relations with Russia

Fairer Trade

Sustained Economic Growth

Some of these have been nibbled at but none is really on the move. Obamacare replacement has hit the buffers. Some executive orders depend on money from Congress which has not been approved. All this can be resolved but not until Capitol Hill gets down to the real business of governing. Meanwhile Trump’s approval ratings hit new lows. This blog follows Rasmussen, who came nearest to predicting Trump’s victory. They tend to poll higher for Trump than other polling groups but even they now put him at his lowest rating thus far. Obviously this is not good for Trump, but it is not good for America either. Whatever your politics.

 

 

Labour: Prepare To Win

Wednesday, July 19th, 2017

2017 Labour Can Win by [Blair-Robinson, Malcolm]

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Backbenchers Rescue May

Wednesday, July 19th, 2017

After she lost her majority, this Blog proclaimed on several occasions that May was toast. By conventional rules of competent government she was and is. A string of mis-judgments since the election disaster and a continued zombie one liners to explain policy which is controversial, increases the feeling that she is, as described by Osborne, a dead woman walking. But the Laurel and Hardy combination of Johnson and Gove, aided by their followers and one or two others fancying leadership ambitions, briefing against May and leaking Cabinet discussions, has reduced the government to a level of dysfunction which is unsustainable.

It has also destroyed the credibility of all the leadership contenders who have overplayed their hands. Neither the party in the country, such as it is, nor the backbenchers are willing to countenance a leadership election, not only because there is no obvious choice following the exposure of Boris as a clown prone to silly one liners who can be reduced to gibbering by any vigorous political commentator, but especially because it is now clear that the choice is May or Corbyn. May could not resign without resigning her government, triggering an invitation from the Queen for Corbyn to form a new one, or forcing a general election, which Labour are favourites to win.

So May is Captain until the ship, holed and taking water, sinks. It might not take long. It has lost its steering, is listing heavily, the pumps are working above capacity, while the crew is disobeying orders and brawling below decks. In its path lies the deadly rock of Brexit.

Wow.

A Government Not Fit For Purpose

Tuesday, July 18th, 2017

We have had good and not so good governments. Mostly it depends on your politics as to the judgment you apply. But now it cannot matter what your politics are, it is plain for all to see the this government is dysfunctional. The party in office is split on Brexit and Austerity, it is still not clear what exactly their Brexit aim is, there is a crisis all across the public sector (the latest is a terrible report on the conditions in our prisons which should shame the nation), the economy is faltering and there is no programme for growth, Brexit uncertainty is now piling one anxiety upon another and at the centre of it all, the Cabinet, there is total disarray.

There is now gathering a great political storm. When it will break and what effect it will have we cannot yet tell. But things cannot go on as they are. Be in no doubt of that.

Gothic Crime

Sunday, July 16th, 2017

Whilloe's First Case by [Raven, Tor]

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The World Order Is Changing: But is Brexit Faltering?

Sunday, July 16th, 2017

The World Oder is not changing in some big convulsion, but it is changing bit by bit. Much of it could be for the better, but as yet we cannot tell where it will end up, so we cannot arrive at an informed conclusion.

America remains the biggest economy, the most technologically advanced and the richest country in the world. It is the foremost military power by a wide margin, although some of its strike platforms, including its huge naval battle groups led by nuclear carriers, could prove vulnerable in top rank conflict to the latest missile and cyber technology.

Russia is politically much more assertive than in the immediate post Communist period, but it is economically dwarfed by America and China. It is the world’s second military power and has a tradition of ‘smart’ weaponry and tactics enabling it to surprise in major conflict. Its defence budget is in total smaller than the increase in the US total just proposed by Trump. But Russia occupies the greatest land mass of any country on the planet, which is rich in every mineral and fossil fuel. Much of this remains undeveloped as does its under populated interior, offering huge opportunity for economic development and growth.

China’s rise is well documented and does not need to be explored here in detail. It is the third largest economy, the second largest military spender, yet in no sense a military power on the scale of the US. It is a very big financial player with a vast investment programme now fanning out across the world. It remains full of poverty in some of its regions, whilst others display enormous wealth. Its heavy industries are old fashioned, but alongside them new world class innovation and production in all the latest technologies is gathering pace. In the last ten years China has built more new High Speed rail miles than all of the rest of the world put together. Unlike Russia, which has become a type of democracy even if it keeps electing the same people, China remains Communist. But it is a form of communism which would be unrecognizable to Karl Marx and which essentially makes China the number two capitalist nation.

Now for the EU. In 2016 the EU was the second largest economy after the US. Change is afoot here and there are some structural problems, but there is now a greater chance they will be resolved, following political changes in France and the rise of Germany as the top European power. Greater integration of the inner eurozone with its own finance ministry and more democratization of its institutions is now much more likely than before. The euro is probably safer than it was, although those in it may reduce. There may now be an outer ring of members in the single market and customs union, but an inner euro core driving forward to ever closer union.

What is really different is the posture of the United States. So too is how the rest of the world views the US. America is hugely powerful, but it is no longer the only power. In the new globalized world, with the economic model under scrutiny through populist pressure unknown for decades, there are now several centres of power and influence. First comes America, then Europe, China and Russia. But following on are Japan, India and others. Unusually there is now more that binds them than separates them; more adversaries and threats, economic and physical, common to them all, than perhaps at any previous time in history.

But the days when only the American voice counted are over. So are the days when there were two competing ideologies or blocks. Now everything is interwoven and interdependent. Perhaps for the first time, we are all in it together.

And where is Britain in all of this? Sadly just at the moment it does not know. What we do know is that the cost of the Brexit project is beginning to bite. Before the fateful referendum, we were the fastest growing economy in the G7 and growing a lot faster than the EU. We are now the slowest in the G7 and the EU economy is now growing faster than the UK. The OBR, set up by the Tories to monitor government finances independently, says that if the UK were a bank it would not pass the financial stress tests that its own banks have to pass. This is not good. Nor is it quite what people thought they were voting for. Curiously the UK may be exerting more influence on Europe by leaving, than it ever did belonging. And if the result is real change on the continent, it is possible that we may choose to stay after all. The greatest political event for generations outside of war, Brexit, may be the spark of change across the world order, yet not itself actually happen.

Prepare To Win

Thursday, July 13th, 2017

2017 Labour Can Win by [Blair-Robinson, Malcolm]

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Repeal Bill: This Is Where It Gets Real

Thursday, July 13th, 2017

The government is to publish the Bill which will incorporate EU Law into British Law, to come into effect as we leave the EU. This will enable future governments to adjust and amend laws and regulations to better suit the UK’s individual needs outside the EU. That is the theory. Now for the practice.

At the moment any changes have to be agreed by the EU, including its parliament in which we are represented, so we are protected from a government taking away rights and protections from ordinary citizens, to suit some ideological or financial programme. That safeguard will be ceded to the British Parliament. However there are fears that May intends that much of it be within the prerogative powers of the Government to change, without parliamentary scrutiny. If this turns out to be the case, the Bill is unlikely to get through the Commons without substantial changes, if at all. So what happens then?

Meanwhile the EU is becoming exasperated by the lack of cohesion in the UK’s approach to the Brexit negotiations. The EU team has produced  position papers, laying out its agreed stance on all the keys areas, in total nine. The British have produced just one, on immigration, which has been described as inadequate and unacceptable by the Commission, the Council of Ministers and the EU parliament.

Only one thing is now certain. Brexit is in big trouble.