Monday, August 27, 2012


A Reason to be a Tiny Bit Cheerful?

The political scene over here is pretty bleak: double-dip recession, Tory led coalition intent on cuts with a right-wing baying for their candidates to be promoted in the upcoming reshuffle. And, as usual in the summer, it's raining and miserable. Meanwhile, though, we should remember, 3000 miles away things are so much worse. The weather is sunny, but so much so corn harvests have failed catastrophically. In addition the Republican Convention is beginning. But here, maybe, a few crumbs of comfort can be gleaned by those of us this side of the Atlantic, who care about who sits in the White House. At least our right-wing is not as bonkers as their right wing.

Let me quote from my favourite newspaper to make the points so much better than I or a series of in-depth articles could possibly do:

Going into their 2012 convention, the Republicans are a party in which there is no significant internal division over the claim that taxes must be slashed, that all government programmes other than defence must be cut, that the government economic stimulus should be undone, the federal pension system privatised, the federal healthcare insurance law abolished, that climate change is a hoax, that a high wall should be built along America's southern border, that abortion in all but the tiniest exceptions should be a crime, that gun control laws are a threat to freedom, that civil partnerships and gay marriage should be outlawed, that Iran's nuclear programme should be destroyed and more Jewish settlements encouraged in the occupied Palestinian territories. Oh, and a lot of them still think Mr Obama isn't really an American too, while Mr Romney is a member of a church that believes Jesus travelled to America.

See what I mean?

Monday, August 20, 2012


Autumn Reshuffle Should be Fascinating

I love reshuffles: they are newsworthy, gossipy and fun to anticipate The conventional wisdom is that they seldom change much but I'm not so sure: Macmillan's infamous 'Night of the long Knives' in 1962 removed his enemies but was interpreted as a sign of terminal weakness; the reshuffle following the resignations of Nigel Lawson damaged Thatcher; and Peter Mandelson's surprise appointment in 2008 extended the life of Gordon Brown's troubled administration.

Writing in the Telegraph, Paul Goodman suggests Vince Cable be promoted to the Home Office- a bold step that would be and unlikely as Cameron's right-wing would go bonkers- not that most of them aren't there already of course.

Ken Clarke is much criticised by that loony right wing again for his relatively progressive and sensible penal policies. According to the Mail, he says he will stay put as replacing him with a right-wing zealot will merely 'retoxify' the party. Hmm, wonder if Dave would dare to do that. Daily Mail rumours that right wing Chris Grayling is the person tipped to take over from IDS who will take over from the 72 year old Ken. The Daily Mail today judges the reshuffle plan in 'tatters' thanks to Ken's refusal to to budge One plan is to make him Leader of the House, a respected position for difficult colleagues (for example John Biffen and Robin Cook; some think pictures of Ken falling asleep on his bench in the Commons after a good lunch would be too embarassing

My own candidate for chopping is most definitely Jeremy Hunt; his presence is an embarrassment to the government and his face on the telly is the only one which makes my blood boil every time I see it. Will he get rid of George Osborne who is his besty political mate and with Dave himself, cornerstone of the deficit reduction programme. I can't see Dave moving Gideon for both those reasons, so expect him to stay.

Other possible moves include William Hague to Chancellor though this apparently safe pair of hands dropped an enormous brick by suggesting force might be used to seize Assange from the Ecuadorean embassy. Another person heading for the chop is allegedly Baroness Warsi: great back story but she can't make any impact on the shire ladies and grass roots membership who continue to fall away in droves.

Wednesday, August 15, 2012


Dangers of 'Helicopter Money'

Simon Jenkins has been banging onb for some time about the dreadful timidity of UK economic policy. No investment produces no grwoth while quantitative easing to the tune of 320 billion remains with the banks, mysteriously unspent but probably used to reduce debt. Jenkins seeks to take inspiration from the Olympics: why not use imagination and daring?
He quotes the unlikely advice of Tony Blair: 'play unsafe'. Jenkins' idea is to direct money into the hands of every citizen: one thousand smackers to be spent before Christmas. Wouldn't this unblock the economy? Consumers go out and buy stuff which manufacturers have to make; ergo, we have economic growth and jobs. Simples! However, I see at least a couple of problemettes with this unorthodox answer.

Firstly, so much of our manufacturing capacity was destroyed during the eighties, we have only about 16% of the economy engaged with it. Most of the 'helicopter money' would make its way into the coffers of German, US or Chinese companies.

Secondly the author of this 'helicpter money' idea, Milton Friedman, the great Chicago economist, used it as an analagy not to achieve economic growth but to warn of nascent inflation. An excellent Economics blog puts the argument this way

Assuming this is a onetime event, the most likely outcome will be a similar return to the ex ante position only with higher nominal prices. With more money, consumers will bid up prices and as prices increase, people will save more until savings are back to about 5.2 weeks worth of cash balances. How the transition will play out is anyone’s guess as preferences and prices are always in flux, but society will eventually end up no better or worse off than before.
This view foresees a spurt of inflation until things return to normal. The greater the casshinjection, one assumes, the greater the inflation, with all the evils associated with this condition- we oldies remember it well from the seventies.

So 'playing unsafe' has its dangers, some of them extreme. What slightly surprises me about the measured, Establishment Jenkins, is that he is advising the goverment to adopt exactly the mindset which, when adopted by bankers in New York and London, brought the structure of international economics crashing down around their heads.

Monday, August 13, 2012


Confidence in Coalition's Longevity Collapses

When the Coalition was formed I discussed with my students regularly how long it would last. At first I thought it would not survive a year; then I thought it might go the distance; then I realised I just did not know! So the recent poll in the Guardian, is fascinating.

Last Tuesday I saw Nick Clegg speak in Manchester city centre. He was smooth and competent and wholly unimpressive, lacking any discernible charisma. But the Guardian poll asks some pretty serious questions about his future which he should perhaps address. Basically the poll asked respondents how long they thought the Coalition will last. End of year? Only 11%- still four points up on July. Will collapse within next two years? A whopping 43%, up from 23% last month. So much for Dave's vapid pursuit of reflected Olympic Glory. Break up a few months ahead of 2015 election? 19% compared with 23% in July. Will survive until the election? Only 16% compared with 23% last month.

Why the collapse? It must be cumulative: the Budget, the cash for access scandal, evidence of growing dissension over Lords reform and then the open rift. Voters do not like disagreements within parties and especially governments. As Lloyd George said 'You can't make a policy out of an argument'. Clegg and Cameron only recently 'relaunched' their agreement- it has failed catastrophically. They will try new relaunches- they will fail too I predict. One begins to sniff the familiar smell of a government in decay. Poor old Gordon's acquired it after less than a year but usually it takes over three years and in some cases-Thatcher, Blair- never arrives.

My feeling is the Coalition will limp on. The Economist offers a shrewd analysis of how Lords reform has weakened the government:

By trying to defuse rebellions in their own parties, the Conservative and Liberal Democrat leaders have primed a much bigger bomb under the government. The coalition was once bound together by affinity, with the two parties discovering they agreed on a good deal, including school reform, localism and paying off the deficit. It is now held together more by a fear of what would happen if it dissolved: the Tories trail Labour in the polls, and the Liberal Democrats are floundering. This week may come to be seen as the point at which their pact began to fall apart. By describing the coalition agreement as a purely contractual affair, Mr Clegg inaugurated a new era of tit-for-tat politicking. The project looks less like a marriage and more like a bad-tempered game of chess. That is not in Britain’s interests.

Monday, August 06, 2012


Look Out Dave! Boris is After Your Job!

One of the political by products of the Olympics is that Boris seems to have accumulated shed-loads of good press. Quite undeservedly he has contrived to suggest to the nation that the success of the meda sports-fest is mostly his doing. Boris has never been one not to claim political credit apparently floating around not tied unmistakably to someone else. And this despite Lyn Truss's acid observation on radio 4 that the opening ceremony had been so enjoyable because at no stage did it involve the Turkish descended mayor of our capital city.

The implications of his runaway popularity is beginning to permeate through the political system, especially the Conservative Party. Tory MPs have been unhappy with Cameron over many things: his poor 2010 election campaign which some feel robbed them of their chance of governing alone; his allegedly craven curbing of his true Conservative beliefs (some think he has none of course) in deference to his feeble deputy and coalition partner Nick Clegg; and his small, close circle of privately educated advisers. It is sometimes forgotten that the Tories have not won an election since 1992; they currently trail Labour by 12 points in the polls.

They are looking for that elusive political phenomenon: a star. New Labour had Blair, who went on to win them three successive elections. Some think Boris could be such a miracle worker. And some Tories with deep pockets think the same way. Rupert Murdoch, damaged by the phone hacking but still powerful, seems to have adopted the podgy classicist as his protege and on Sunday the papers contained lots of articles tipping the mayor as a genuine threat to Cameron. Is he?

Writing ihn The Observer, his biographer, Sonia Purnell, is not so convinced. She rubbishes the idea that Boris has a record of which he can be proud:

While his stint as mayor has undoubtedly been brilliant for Project Boris, it is far from clear that London has equally benefited. The capital has some of the highest public transport fares in the world, yet offers an unreliable service. Its police force has undergone its worst internal crisis for a generation, with the mayor burning through three commissioners in as many years. The Boris Bike hire scheme, while popular, is a financial swamp costing more than £100m; we are in danger of breaching EU rules on pollution; the cycling death rate is rising; there are disturbing trends in some areas of crime. Does this qualify him to become prime minister in times like these? Secondly polls show 24% of voters wanting Boris to replace Dave but over half unsure. When asked if they would be more likely to vote Tory if Boris were leader, 19% said yes, but 17% said no and 55% said no difference. Thirdly, and maybe conclusively Number 10 are said not to be too worried about him. Sure he has the gift of making people laugh and using his charm to disarm criticism of his many gaffes, but he is a risk taker and may have a string of skeletons in his cupboard which Dave knows would sink him should he ever pitch for the main prize. Certainly, my picture, above left, is one of the very few of him in the company of the woman to whom he is married with whom he has children.

Wednesday, August 01, 2012


New Report 'Converts' its Former Sceptic Author

I was quite relieved when I read the piece about Professor Richard Muller's report into climate change designed to produce a once and for all answer to the questions of: is the climate changing and is it because of human activity? Muller's study revealed an increase of 2.5 degrees F over the past 250 years and 1.5 over the last 50 years(see graph on left). 'It appears likely,' he writes, 'that essentially all of this increase results from human emissions of greenhouse gases.' Muller, formerly a leading sceptic, now considers himself 'a converted sceptic'.

The study entailed 14.4m land temperature readings dating back to 1753. Funding for the project included a big chunk from the exceedingly right-wing Koch Foundation, so a sceptical conclusion would have seemed likely. But it has proved otherwise. So has his report settled anything? It would seem not, as Leo Hickman's piece reveals.

Rather than join Muller on his road to Damascus, many climate sceptics have predictably been tempted by the neon signs directing them to turn back instead. Muller, as a result of his "conversion", is now being painted as a figure of distrust and scorn, in much the same way that they have viewed many climate scientists over the years. His research methodologies and results are being mocked and slammed for being simplistic and "agenda driven".

To quote the well known psalm:

They know not, neither will they understand; they walk on in darkness: all the foundations of the earth are out of course.

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