Archive for July, 2020

Sunday Blog 26: Is this the Smart Way Forward?

Sunday, July 26th, 2020

We are hit by the effects of Covid 19, which has subsided for the moment, but it has very not gone away. We have to face a stupendous economic challenge of the biggest recession in three hundred years. We are thundering down the track to a no deal Brexit. So we need all the friends and trading opportunities we can get. This is not a moment to focus on the internal workings of other countries, however alien to our standards they may be, but rather to focus on our common interests for the common good.

Moreover China is not a monolithic and moribund system like the old Soviet Union. It is the world’s second largest economy, is technologically advanced and is a big investor and partner in all manner of commercial and infrastructure projects in the UK.

So to row at the same time, now, with the EU, Russia and China, making critical trade with all three more difficult and less likely, is not smart. It will achieve not one iota of influence over the governments in situ in those countries and groups, nor will it change the behaviours of which we complain. But it will make life harder for us here in the UK. It will impair business, reduce employment prospects and increase by a significant margin the volume of money we have to print to get us out of this mess.

It has always been my view that the notion of borrowing money by a country with its own sovereign currency is something of a fiction. The real resource to drive growth is expanding the money supply to fund start ups, infrastructure renewal, modernising communications and creating enough affordable housing to smack the housing shortage out of existence.

To achieve that without inflating fixed assets but at the same time inflating the dynamic economy enough to drive up living standards and repair public services, requires economic skills and attention to detail of an unusually high order.

Skills which Boris, for all his charm and optimism, just does not have.

Sunday Blog 25: A Confusing Time

Sunday, July 19th, 2020

The latest miss-step of the Boris campaign (government is not really the right word) is that the daily death rate is found to be so badly wrong that the information has been withdrawn pending the outcome of another irritating ‘review’. Our problem is that ministers are at sixes and sevens over a wide range of issues at a time of twin national emergencies, Covid and the economy. And coming down the track, Brexit. Mixed messaging, U-turns, systemic failures, muddled decision processes and flawed or missing data, all contribute to mounting anxiety about what the future holds.

Adding to our woes, we have decided to sour our relations with China and Russia, we are leaving the EU (sorry we have left, but we a currently in transition so we don’t feel it yet) and we have just taken a political decision over Huawei which looks like turning into an economic disaster. Because Chinese technology is cheaper and much better than any alternative on offer. So we now have to wait on Eriksson and Nokia to step in, at what extra cost and delay we have yet to discover.

The promise to be among the first in the world to install 5G across our country, enhancing our connectivity to boost our economy, was a bold one. To mess up the plan because Trump & Co are angry that Chinese technology is way ahead of their own, while here the Tory nationalist right wing treat Boris as their poodle because he is, is plain stupid. The security issues are rubbish. China does not want to screw its customers by turning out their lights, not least because they know perfectly well we have the capacity right now to turn out theirs. And they have more lights.

As for the pandemic, here are the figures.

China  83,660 cases, 4634 deaths.  New cases yesterday 16.

America  3,883,716 cases, 142,881 deaths. New cases yesterday 74,710.

Nothing more to be said.

Sunday Blog 24: A Time to Reflect

Sunday, July 12th, 2020

Public Services and Frontline Workers

During the unique (thus far) pandemic emergency it has been striking and heartening to witness how ordinary frontline workers, not just in the NHS,  have kept going, at varying levels of personal risk, to keep the fabric of our integrated and civilised society working. The NHS staff, right at the ground zero of the crisis, have rightly acquired iconic status for their dedication, courage and commitment. Many have lost their lives. All of this has been achieved upon a foundation of years of cuts in the funding of every nook and cranny of our public services, to the point where preparation for, and supplies of, everything needed in a national emergency were run down, inadequate and in the worst cases, non-existent.

The Governing Establishment

Has failed at every level, the government worst of all. Lack of preparation, bad modelling, faulty interpretation of science, ignorance of vital data, fumbling delivery, mixed messaging, clumsy announcements, delay and indecision have been the hallmarks, in England, of the crisis experience. Not so in the devolved administrations where the outcomes have been better and public confidence in the governing authorities much higher.

At the heart of these failures towers the disheveled and bumbling Boris. Surrounded by Brexit junkies, he appointed a Brexit cabinet with very little depth of experience, nationalist and narrow, which has been largely overwhelmed by the magnitude of everything. The outstanding exception in Rishi Sunak. His star is rising so bright that it dazzles. Does he threaten Boris? That depends on how successful his programme to invest his way out of the Covid induced depression turns out to be. If it reduces unemployment and kick starts growth in real jobs, yes, he may well threaten his bumbling next door neighbour. But if he fails and unemployment soars, they will both go down together.

China

China is a fact. It is not in the general sense a choice. It will soon be the number one superpower. It will never become a democracy on the Western model. It is infinitely more powerful than the original Soviet union because as well as being a Communist State it is also a capitalist one. Its economy is now at least as powerful, perhaps more so although not yet quite as big, as that of the United States.

For many years we have cozied up to China and wrecked our own manufacturing base, by exporting most of our skilled jobs and manufacturing capacity East. We now make almost nothing we use as everyday consumers. China is also technologically very advanced. At first it mainly copied Soviet stuff, then American, but now it does its own and it’s good. Very good. Anyone using a top Lenovo laptop or Huawei phone will testify to that. And in 5G it is way ahead of everybody else. And we need 5G now as part of our recovery plan from the pandemic recession and Brexit reboot.

GCHQ has the capacity to protect against and deter with counter measures any Chinese cyber aggression. The UK has thus far enjoyed excellent relations with China, now deeply imbedded in our economy at many levels. Certainly we do not approve of much of China’s domestic agenda, but we are in reality no longer the power we once were, and there is absolutely nothing we can do about it. What we have to do is become far more self sufficient in every aspect of our daily consumption, so that we rely less, even for our strategic core supplies, on other countries, including China. And we really do have to start making phones, mobile equipment and much else here in the UK.

But in the end the world will be made up of two sorts of countries. Those who can get along with China and those who cannot. Prosperity will envelope those who can. The rest will struggle. Because the other great truth in the geo-political world is that America has passed its high water mark and is now a waning power. Its inability to offer its own 5G system and its failure to manage Covid 19 are but straws in the wind.

Sunday Blog 23: Is the Ending of Lockdown Working?

Sunday, July 5th, 2020

According to most reports the answer appears to be yes, with both businesses and the public careful to stick to the rules. As expected a small minority abandoned social distancing as the booze began to flow. That resulted in general overcrowding of streets and public spaces in some areas. This may lead to a spike or spikes, which in turn end in local lockdowns. But that is a far cry from the idea that a second wave will flow uniformly over the nation and require a national retreat of the population behind their own closed doors, plus the closing down of much business activity.

Whether that happens depends on test and trace working properly. According to ministers it is functioning well. According to some credible insiders it is not anything like as effective as it should be and needs to be. We must hope the government is right.