Blog 2023 Malcolm Blair-Robinson

This is an extraordinary development. I cannot pretend to be at all knowledgeable about Uber but I do know its service has transformed the lives of millions of Londoners, making point to point travel safe, more convenient and a good deal cheaper. Because it uses an app and works via your smart phone, it is part of the structure through which busy people conduct their business, social and family lives.

The idea is part of the new style economy developing through the internet and smart phone, which has left many traditional service and retail industries in decline and fighting for survival. That prompts anger among black cab drivers and traditional mini-cabs which remain more or less with their old business model and declining sales. The Uber system of contract employment offers little in the way of employment rights and protections but a much more independent work pattern.

Clearly political pressures have built up and Uber clearly has work to do to satisfy the authorities that it can meet the required standards, but the decision of Transport for London to refuse Uber’s licence renewal is an extreme step which looks like a bad political miscalculation. The public across the whole world consider organisations like Twitter, Facebook and Uber theirs, not the product of politicians or authorities. A solution needs to be found fast. Or this will not end well.

This Blog will not comment in detail yet on May’s much trumpeted speech. Except to say this. Brexiteers regard Britain’s  relationship with the EU as primarily about trade. European politics, outside security issues, are something to be shot of. The problem is that EU sees the political union and its associated free movements as an absolute priority and trade as the icing on the cake. But the integrity of the union comes first. When you disentangle the purple rhetoric about shared values and stuff, these two positions are irreconcilable.

So long as May puts the unity of the Tory party above the interests of her country and keeps the hard Brexiteers in her cabinet, the danger of the cliff edge remains.

It is not possible to govern a country in easy times with a party split into two opposing forces so that it is both government and opposition, all sitting round the Cabinet table. Even if they are singing like birds. If times are critical, as they are now, to attempt it and place at risk the national interest, is potentially catastrophic. It is manifestly not ‘what is best for Britain.’

The EU is fed up with the inability of the UK to articulate what kind of Brexit it wants. The Brexit Department is in trouble, with its top man moved out to report directly to May. The economy is slowing while inflation is rising. Industry, commerce and business generally are becoming really agitated at the lack of clarity at the nature of the Brexit for which  they must plan. Mutterings about closing factories and moving plants to the EU are growing louder. Time is running out. Unrest in the public sector is building.

So on Thursday Theresa May must read the riot act to her Cabinet and make it clear that she will sack the Brexiteers if she has to, as they have to the last one, proved muddled, incoherent and incompetent, with not even the slightest idea how to bring their project to fruition without crashing the economy, splitting families and ruining people’s lives. They either fall in line behind her on a new conciliatory approach to the EU, based upon what is possible with the 27 and what is needed to set our country on a path to a sensible Brexit, or they go.

In the Commons there are about 150 ideological Brexiteers living in cuckoo land who think they can deliver on all the lies and falsehoods and wishful thinking they have, without conscience, pedalled fraudulently to the people, and 500 who will back a realistic and sensible Brexit settlement which will save our country. That is May’s majority.

Either she has the courage to put country above party and mobilise that majority to govern, or her government will implode. We will soon know. Time for the Tory quarrel over the decades has finally run out.

On September 4th this Blog posted a piece on North Korea which ended with this:

Unless the United States manages to convince North Korea that the next time it fires a rocket or tests a nuclear bomb it will be attacked and wiped out. If that message sinks home, as in Kennedy at Cuba, talks can deliver an outcome which works for both sides. But so long as the US allows itself to be pushed just a little further down the road of talk and no action, while Kim Jon Un follows one provocation upon another, the road to calamity remains open. The lesson of the Cold War was that in order to prevent it you have to be ready and willing to fight. At a moment’s notice. Loaded and locked was a statement then of fact, not as now, a rhetorical flourish.

Yesterday Trump stunned the United Nations by making it clear that if America had to defend itself or its allies it would in response destroy North Korea. This was exactly the right thing to say. What now matters is whether North Korea believes him. If Pyongyang signals that it does, then America must move swiftly to start talking about a peace settlement for the Korean Peninsular and some kind of guarantee of the continued existence of North Korea. That is now, and always has been, the only rational way forward. China holds the key to many doors in this crisis and it should redouble its efforts to unlock the door to the conference room.

As for Trump’s speech to the UN which was listened to by a stunned and silent audience, this Blog heard good things and bad things. Less abuse of Iran would be welcome, but much of the rest of it needed to be said. There are times when the Citizen President is the most alarming person on the planet, but there are others when he is a breath of fresh air. Yesterday at the UN was one of those.  Let us hope some good will come of it. Because out there is a lot of very bad, much of it getting worse.

Interest rates are the tiller of an economy. They steer the course set by the democratic government tasked with guiding the national financial well being. The helm was handed to the Bank of England twenty years ago. For a while it steered a steady course with rises and falls according to need, guided only by the beacon of the inflation rate. The fact that there is a lot more to charting the right course than  the inflation rate was overlooked by the Brown led Treasury and the Blair led government. So when the credit crunch came the economy hit the rocks. It is still bumping about in the shallows at growth rates previously thought of as flat lining.

The Bank of England offers a constant narrative of pending or deferred decisions to raise rates, but it never happens. It has not happened for so long that there is no certainty what will happen if the tiller once more is brought into action. Will the mechanism fail and the ship drift to disaster? Will households and businesses face ruin because they have no margin for higher payments? Nobody knows. Least of all the procrastinating Bank.

This is how the system is supposed to work. Interest rates rise to choke off inflation pressures and especially asset inflation. The return on savings and investment for wealth creation increases. The productive economy starts to grow creating new wealth, while the asset inflating economy shrinks. Stirling rises potentially sucking in imports. This is offset printing more of it, not for use by markets, but to fund an economic reboot of the productive workforce. A combination of printing and interest rates creates enough money supply to oil the economy, while at the same time positioning sterling’s value within a market trading profile which discourages asset inflation and boosts wealth creation, i.e. a real boost to GDP. That increases the tax flow to the Treasury, reducing the deficit and providing for properly funded public services. That increases popular spending power, which further grows the economy.

It is not that difficult. But the decisions are political. That is why they should never have been given to the Bank of England to make. And why now they must be taken back to government, whatever shape of Brexit, or even if Exit Brexit.

In a word mischief. He still imagines that he can somehow wind up leader of the Tory party and Prime Minister. Had he kept out of May’s cabinet he might very well have done so. But he took on the job of Foreign Secretary and blew whatever reputation he had, depending on your perspective of the great political showman.

He has been a disaster at the foreign office. Most of the time he is clueless and talks in slogans. Several times he has dissolved under forensic questioning by tough political commentators. He is distrusted in Washington, Paris and Berlin. The Americans consider him a clown and a liar, the French ignore him and the behind the scenes German opinion of him is best left unsaid here. British influence on the world stage has perhaps never been lower; only in Libya, which has several governments, did he make an impact with one.

So to boost his credentials he has once again pedalled the proven falsehood that leaving the EU will free up £350 million per week to go straight into the NHS. Either he is even worse than we thought at paying attention to detail and reading briefing papers, or he knows very well this is untrue. Some angry Tories have demanded May sack him. She does not need to. He is self-destructing.

North Korea’s declaration that it only wants military equilibrium with the USA and a peace treaty with the South, so as to guarantee the survival of their country, is a game changer from the blood curdling threats of annihilation of American cities of recent times. Already there are signs that both Russia and China, while very much opposed to the notion of a nuclear armed neighbour, now see the US as both the cause of NK’s nuclear programme and the responsible party in finding a solution. Sanctions are clearly a waste of everybody’s time and only talking will now resolve the issue.

There is no military solution short of nuking North Korea with such a cascade of warheads that it would be unable to respond at all. The fallout would make much of the Korean peninsular uninhabitable for decades. It would also cast a pall of shame over the United States from which it would be unlikely ever to recover. Gone would be the notion of world leadership. Every American would be scarred. The alternative of targeting conventional strikes at NK nuclear facilities would result in such an onslaught on South Korea that hundreds of thousands, even millions, of casualties would be suffered even if the whole thing were over in a day.

There was a time when America could have brought North Korea to it senses and had it not been the author of its calamitous programme of regime change and never ending wars it might have succeeded. But sadly, while the blunt force of the Cold War confrontation was played with extraordinary restraint and skill, the subtle diplomacy and military pressures demanded of the post 9/11 era has proved beyond US political structures to deliver. This is a pity and the whole world will pay a price. One part of that may end up as learning to live with a nuclear armed North Korea. That would indeed be game set and match for Kim Jon Un.

However there is an odd coincidence that may yet hold the key. If Kim Jon Un is hard to read, Donald Trump, the first citizen president of the United States, the non-politician who does things his way, is even harder. The mixed messages coming from the White House, often out of step with  either the State Department, or the Pentagon or both, or even its own view the day before, has proved  confusing to its enemies and perplexing to its friends. But the North Korean crisis provides a golden opportunity for Trump the deal maker to fix an historic settlement with the young and much underestimated leader in Pyongyang. They both have much to gain. And if they fail, everything to lose.

There is a lot of trailing for the scheduled speech from Theresa May in Florence next week. She is planning to say things about Brexit and the stalled negotiations which, so it is said, will change the game. Well perhaps, but since the contents are not yet agreed either with May or the Brexiteers in her Cabinet, it is a little early to comment. What we can say is this event is necessary because the Lancaster House speech, delivered with such drama and sycophantic acclaim, is now dead. It is dead because the aspirations were a pipe dream which bore no relation to what was practical in terms of getting the EU to agree and dead because the threats to walk away from negotiations if we did not get our way were economically suicidal and politically impossible.

So now we await Florence. Supposedly it will contain proposals which will be anathema to hard-core Brexiteers, but will be acceptable to France and the Benelux countries, shattering the unity of the twenty-seven and opening up a gap through which triumphant Theresa will charge. Unfortunately this sickly scenario, laced with a thick layers of wishful thinking and reality denial, accepts that Germany will not approve. And that is where it all begins and ends. If Germany says no, even if the other twenty-six say yes, no it will be.

For the hard facts are these. Brexit offers our economic future as a hostage to fortune. But it cements in Germany’s grip absolute political and economic power in Europe unknown since its victorious hegemony of 1940.

A question mark now hangs over the revered leader of the democratic segment of Myanmar’s government. Once lauded worldwide, her lack of condemnation of the military cleansing operation, driving hundreds of thousands of Rohingyas to flee into Bangladesh, has caused shock across the world and brought down upon her serious questions about how good a person she actually is. I have never admired her on anything like the scale of most. I cannot explain it, but I saw something about her that worried me. It may have had to do with her abandonment of her children in favour of her political ambitions. It may have been because instinctively I just did not trust her.

So this Blog does not see a fallen idol. It sees a ruthless politician who, having struck a deal with a military dictatorship which gives her power of sorts, but no authority over the military and its grip upon a good deal of the normal functions of government, has no option but to mutter unconvincingly about ‘terrorists’ and stay away from the annual meeting of the UN. If she were to say the kind of stuff expected of a Nobel laureate, the Buddhist majority of her country would rise up in protest and the military would seize upon the opportunity to slap her back into house arrest, and go back to its old ways.

There are no saints in politics. Only politicians. And as we know, one businessman. But he is quite another story.

So great is the preoccupation with the almost hopeless muddle which Brexit has become, with its scale and complexity far beyond the comprehension of its promoters, that other potentially more threatening economic problems are going on unheeded. The daily diet of bad news, today it is a rise in homelessness, has become the accepted norm, like a burger junkie en route to a health crisis with each bite and every meal.

For the plain fact is that our economy is a mess. It will become a worse mess because of Brexit, but even if nobody ever thought of Brexit, it would still be a mess. The government is trapped in austerity without enough income from an over complicated tax code to meet its obligations, giving us such diverse symptoms as a rise in homelessness and vast new aircraft carriers without any planes or enough escorts to protect them on a hostile sea.

The reason is productivity is far too low because the economy survives on asset inflation rather than wealth creation. Simply put our GDP is about 20% smaller than it should be. Government policy, such as subsidising excessive rents charged by private landlords with public cash, make matters worse, as do schemes which make unaffordable homes affordable through public subsidy.

Add to that a vast industry of private corporations running public services making a profit at taxpayer’s expense, plus the seeming inability of the Bank of England to restore interest rates to their rightful place as a quick response tool of economic management and you have a toxic mix leading to a circular decline in the standards and prospects of the many, in favour of the gluttonous enrichment of the few. You arrive at a point where correction becomes impossible and only collapse and a reboot can effect positive change.

We are not there yet, but we are very close. There are now prospects of serious disruption from strikes across the public sector and a renewed banking crisis if Brexit turns nasty. What is needed is a programme of huge government led investment in housing, infrastructure renewal, home production of manufactures and food, re-configuring of the currency so that it puts the UK on the leading edge of competitive world trade, and the restoration of the levers of economic control to democratic institutions. Dynamic Quantitative Easing will have to be used to fire up the base of the economy at least to the magnitude QE was used to stabilize the financial sector.

Do not hold your breath. No political party has the measure of all of this. Labour is nearest, but what the hour demands is a political revolution which changes the economic map at least on the scale of 1945 or 1979.