Monthly Archives: November 2021

From Kermit The Frog To Pepper Pig: The Wheels Fly Off The Boris Wagon

There was a time when I thought my early assessment of Boris as a clown and a liar was too harsh. I began to to see beneath the bravado an astute politician who saw the injustice of Thatcherism being retained as a political blueprint, when times and people had changed. Who shifted the Tory party far to the left of Labour on the role of government in shaping the nature of the economic model and its impact. Who understood the need for skilled jobs providing higher lower to middle incomes. Who saw  increasing living standards was once again a key political aim.  Who meant what he said about levelling up. Who, caught off guard by the pandemic, bet the house on vaccination and won big.

Unfortunately for our country, the last several weeks have reminded me that my original judgement was not harsh, but right. Boris may be all those good things,  but unfortunately when challenge comes, he remains a stranger to the truth and an idiot on the platform, leading a team seemingly unable to deliver its promised outcomes across a range of issues. Mess and muddle seep through Whitehall like creeping lava from Boris’s volcano.

The biggest lie of all,  that Brexit will be a wonderful sunlit dawn of freedom and opportunity, is now believed in by nobody. Its promoters have either been thrown out in disgrace, gone very quiet, or vanished into the night like a phantom army. Except for Lord Frost. He ploughs on, threatening and obfuscating, in negotiations without end, rejecting reasonable accommodations as not far enough, demanding to change what he promoted, agreed to and signed. This is surely one of the darkest chapters in our nation’s political life.

And who got us here? Not Kermit the Frog, nor Pepper Pig. Just  Boris. The clown.

Afghanistan Revelations: Corruption Cause of Collapse

This blog has always predicted that in the end the West’s well meaning efforts to bring Afghanistan into the modern world would fail, not least because of the utter corruption of the  so called democratic structures which  NATO propped up for far too long. The political reluctance of the West to deal with the obvious is a failure, among several, of its post Cold War nation building adventures.

The new disclosures that most of the much vaunted security forces did not actually exist, with corrupt generals and politicians taking to themselves the wages of phantom security and police forces, is a virulent condemnation of the wishful thinking in Washington and other capitals, in spite of warnings from their own senior military leaders.  The whole sorry episode is a terrible betrayal of those who gave their lives in good faith to support a noble cause without any prospect of fulfilment.

The Taliban now impose their extreme form of Islam on their country, while cash, food and other forms of humanitarian aid is withheld by angry democracies, demanding the Taliban change their tune. But the chances of that happening are as remote as the original vision of victory, so the innocent population, now short of everything to the point at which babies are sold to raise money for food, drift towards a state of famine.

What a complete and utter disaster. Will we have the courage to own it?

Bank Holds Rates: But Should It Decide?

In the commentary following what many found a surprising decision by the Bank of England not to raise interest rates yet, one or two economists wondered out loud whether central banks are the right institutions to be taking decisions which have such far reaching effects on the lives of ordinary people.

It is not very long ago that while the Bank of England was responsible for the integrity of the banking system,  the government, via the Treasury, had charge of interest rates, credit limits, hire purchase terms and mortgage terms, maximum payback terms and so on. In other words, the elected government decided on the political priorities and the shape of the economy based on the democratic mandate given through winning a general election.

Nowadays the Treasury is limited to taxation levels and spending programmes, but not the supply of money, the cost of money or the priorities for money.  Meanwhile the markets have free reign on the asset inflation and the currency value. Inflation itself, which appears to be gathering momentum, requires like water to a fire, a rise in interest rates. But the result would be significant for the over borrowed at every level, the kind of decision which is political in nature, as well as in its result. Non political institutions are just not suited for this, nor,  in a democracy, appropriate. Hence the dithering.

The current model of a financial sector awash with cheap money, printed by central banks, largely used to inflate fixed assets, has created the most unequal economy, with the biggest gaps between rich and poor, for generations. This Few first, Many later regime is on its last legs. How it will implode is not yet clear. A soft manageable landing or a hard destructive one?  The combination of Brexit, Covid,  Climate Change with rising energy costs and creaking supply chains, labour shortages and skill gaps, are an unprecedented combination of uncertainties.

A Bank of England dithering over interest rates, a Treasury which appears to have lost the plot and a Government all over the place on multiple fronts is not a combination which inspires confidence. This is no time to rely on muddled forecasts and wishful thinking. The confusion between borrowing and printing is an alarming sign that all is far from well among those who are supposed to know what they are doing.