Malcolm Blair-Robinson's Blog, page 27

The Liberal Democrats: The Real History Makers?

Politics is never straightforward. Nor is is it always obvious. So while the eyes of the world are now transfixed at the spectacle, and spectacle it certainly is, of Boris the Clown becoming Boris the  Ringmaster (more about that later) it may be that history will see greater significance in the election of Jo Swinson as leader of the Liberal Democrats.

She is the first woman to be elected leader of her party. The Tories have had two women lead them. Labour none. She  comes to the fore at a moment of national political crisis, when Brexit chaos is starting to cause real damage to the economy, to Britain’s standing in the world and moreover to its power, authority and global reach. It seems that almost all the assumptions of the Brexit campaign have proved optimistic, unreal, undeliverable or pure fantasy. Some of it has been outright lies.

The Tory party is split in so many directions that it has ceased to be a party, more a perpetual argument. Labour has become so nuanced that many have become confused as to where it is headed and it has also lost control of the anti-semitism issue. But the Liberal Democrats are rising to such a level in the polls that they beat both the Tories and Labour in the local and Euro elections. They are determined and clear cut. Their flagship policy unites their party from end to end and top to bottom.

It is that the Lib Dems oppose Brexit and they want to stop it. Maybe the time is coming when they unite the majority in the country to join their crusade to rescue our country and Union from the greatest act of folly and self harm in its entire democratic history.

Iran

It is bad enough that the whole government is paralysed by Brexit dysfunction and a change of leadership. Add to that by using military force to seize an Iranian tanker off Gibraltar at the bidding of the United States, with whose policy on Iran we profoundly disagree, and you create inevitable problems, at a time when we are trying to help business  continue to work with Iran in spite of US sanctions. Not to mention trying to free Mrs. Zaghari Ratcliffe.

Now the Iranians have found a pretext to seize a tanker of ours. Great outrage, posturing and Cobra meetings. Once again it appears the government has misjudged the motives of the other side, failed to read the signs, blundered on and got itself in a fix. It reads like a bad TV drama where characters constantly do annoying and stupid things. The trouble is this is real. We cannot just switch it off.

Trump

Unlike most people on this side of the Atlantic I do see some merit in Trump. I disagree on Iran, climate change, trade wars, abortion, indeed the whole neo-con agenda. But I do like the sentiment of accepting that not all countries want to be, or should be, clones of America, that foreign wars are counter productive and that strong leaders we may not like, are generally better than ungoverned space.

However the reason I regard him now as doing more harm than good to America, is that his America First catch line is code for Trump First and the only thing he really admires and venerates above all else is himself. He knows he did not win in 2016 because he got more votes, as would be the case in all advanced democracies, but because he acquired more delegates to the electoral college by wafer thin wins in rustbelt and industrial states normally favouring Democrats.

To prepare his base for 2020 he has decided to fire up America’s faultline. Part of it is and always has been racist in its DNA.  So we end up with border walls and send them home. This provides redneck thrills and chanting crowds. But it shocks the world and diminishes America in the world beyond the Trump horizon. More to the point it shocks and appalls the vast majority of decent fair minded Americans who venerate the core values of the American Dream and understand for what giant declaration of human advancement it is that the Statue of Liberty stands.

The risk for Trump is that his disgusting gutter twitter drivel about four brilliant and brave women, American women, who disagree with him, which has caused outrage across the world, may gain him votes in the likes of Arkansas where they are not needed and lose him votes in the likes of Pennsylvania where they definitely are. If he is not careful one day his ears may burn with a chant from the crowd  ‘Send Him Home.’

Difficult. Scotland hates him and Germany would not have him.

 

Does Crash Brexit Really Mean Freedom?

No It means the opposite. Instead of this country having more control over its destiny it will have less. More to the point, politicians will have far less authority than they have now. Why?

Because the world’s largest single market, through which we enjoy advantageous trade with about 40 countries and which now has free trade deals with Japan, much of South America and Canada, will remain at its closest point less that twenty-five miles away. And everything it does, every rule it has and every decision it takes will impact upon the daily lives of all the people of the United Kingdom. But we will no longer have any political power to influence any of it.

Hammond has warned that business and the EU will work together to ensure their companies prosper and that employment can be maintained. GIG economy entrepreneurs will find their own ways through. Families will adapt. Many will take dual nationality. The country will carry on, although the Union may go, so it will be England perhaps on its own. It will, as Iran said the other day, be more or less powerless, an old tiger, its teeth gone. London will beat its chest and Westminster will gorge upon its freedoms, but for the decisions that matter the people will look to Brussels, Paris and of course, Berlin.

Oh, but we are the world’s fifth largest economy so people will take notice of us, they will have to, will be the cry of the crackpots in the ERG and their allies. For the record we are now number seven. And falling. A  country hell bent on self-harm, floating on a mystic wave of fantasy and delusion. Why should anybody take notice of that?

The Falling Pound

This blog has said many times that there can be no realistic attempt at a post Brexit recovery unless the pound is worth close to one dollar and marginally less than a Euro. I stand by that conclusion. But I also say that the current predictions of a rapid fall to dollar parity in the event of a Boris style crash Brexit, so beloved by him because we are British and big on optimism and don’t have to bother to go into details or finish sentences, would be a disaster. The reason both these irreconcilable statements are true is because the context of the second is different to the first. The Boris disorderly plunge brings business chaos, inflation, rises in living costs, loss of jobs, broken supply chains. Indeed everything that no sane person wants.

My case for dollar parity would be part of an organised programme of remodelling the economy, away from the asset inflation driver we have now, which makes the richer richer and the poor poorer, to one which favours new wealth creation and drives growth through earnings. The wealth  would build bottom up, which works in the long term, not top down, which does not.

If we are outside  the EU, any notion that the UK can prosper purely on services, importing up to 90% of all we consume, is just not going to happen. We will have to harvest or make an ever increasing volume of all we consume, importing only that which we cannot grow or cannot make. And we have to export the excess so that we become a country with a trading surplus.

To do that we have to create new money  in tranches to be pumped into the base of the economy by the government, to fire up massive industrial and infrastructure investment, including all the cutting edge technologies,  climate friendly energy generation, communication and land travel. We need 5G in every nook and cranny of our islands, the fastest and best rail network worldwide, and cheap energy at the touch of a button. We have to clean up the air and and restore proper funding of all public services at every level. Taxation reform is a must with a system which ignores the notion of profit and instead focuses on turnover or revenue generated in the UK, by corporations and business, regardless of the origin, ownership, or nationality of the owners or entities involved. Tax must be on the movement of money not the emergence of profit. And it must be unavoidable.

We all know what random printing of money can do if it is used to build palaces for the ruling elite. But we also know that it was Quantitative Easing which saved both the US and UK in the 2008 crash, plus the Euro when many predicted it would fail. This time it would have to be Dynamic Quantitative Easing, which is new money printed, not by the Bank of England, but by the Treasury, to fund the economic reconstruction programme.  To maintain  balance and discipline with this flow of new money into the base to create new wealth and become the natural driver of inflation, the initial tranche must be exactly matched to the £435 billion already put into the financial sector by the Bank of England.

The Bank would then begin a programme of selling back into the market its accumulated stock of government debt. This would bear down on assets, while the DQE would boost earnings. The smart investment  managers would move away from asset inflation and into wealth creation. Markets would become earnings driven and leverage averse. The days of arm chair millionaires and food banks would be over.

Up to 1x GDP of DQE might be needed (£2.2trillion) to fire the country up  so that most future investment is funded by earnings rather than borrowing. That is the only  secure legacy to leave future generations. It is the only means of legitimizing Brexit. The problem is that I am unaware of a single Brexiteer who would have the slightest idea what  this is about.

No, they dismiss it all. Their only cry is that on November Ist, Britain Will Be Free. Free of what? The thing this nation really needs and the current majority in the country really wants, is to be free of them and their crackpot notions which threaten jobs, services and living standards, the break-up of the United Kingdom driven by English nationalism and a world lamenting the fact that a once great  power could end up so really, really stupid.

What the Ambassador Said

What the British ambassador said about the Trump administration not only comes as no surprise, but it is common currency among diplomats and politicians the world over. He also said Trump should not be written off. Wise words because  the definition of populism is in an unorthodox form of politics which breaks all rules and offers an approach which appeals to the people and horrifies the established political class, its supporting civil service and its vast legal tail. Trump is a populist. So is Farage. And very so is Boris. Moreover if polls are to be believed, Boris is on for a runaway win in the race to become prime minister, so we will expect a heavy shot of populism every time we catch up on  the news.

What is wrong is the fact that the intensely secret despatch from ambassador to government, one of the most closely guarded and secure communication channels of statecraft, was leaked to a newspaper. By whom? And with what purpose? At the very least it is a criminal breach of the Official Secrets Act. At worst it is treason. But such is the tawdry depth to which organised government has now sunk in our country, it was probably no more than idle mischief making by somebody pissed off.

Time to Recall Article 50?

It is three years since the Brexit project began; a simple in or out concept which would be, according to its promoters, the easiest negotiation in history, if out were the choice. It was. And here we are, three years on in political, constitutional and Brexit chaos. Positively nobody knows what is going to happen. Government has ground to a halt. Against all precedent, a governing party has taken time out to allow its membership outside parliament to choose the new prime minister, the third since 2016. This electorate is small, white, elderly and hell bent on a kind of Brexit backed by less than a third of the electorate in the country. This process is a democratic affront and a constitutional abuse.

The candidates competing, vie with each other for victory by making outlandish promises, combining an impossible menu of tax cuts and spending increases. They promise new negotiations with an EU which has made plain there can be no such thing. They offer solutions for Ireland which are already rejected. They hazard the Union by potentially forcing out of the EU on catastrophic terms two nations, Scotland and Northern Ireland, who voted to Remain. They claim a mandate for Brexit which was never given because it was obtained by lies. Nobody voted for the mess we are in. There would have been no majority for this historic act of self harm, if the fiasco which unfolded could have been predicted.

Even if we were insane enough to go for a crash Brexit, it would not be over. Reduced as we would be to the same trading terms as Mauritania and ungoverned spaces, we would face years of negotiations to set up new trading agreements, even to get ourselves back to square one. The simple truth, which polls confirm, is that the majority is now fed up with Brexit, it is a failed project, a phantom ambition, the cost far exceeds the benefits and the only thing in the true national interest is to recall Article 50, which will end this national trauma once and for all.

Leadership Contest: Or Row? Or Worse?

The unique contest between Boris and Hunt, the first when the membership outside parliament of a political party has elected a leader when that party is the government, is becoming increasingly unreal. Unreal because Hunt is making wildly optimistic assertions of his powers as a negotiator when he knows very well that the chances of the EU re-negotiating the Withdrawal Agreement are near to zero.

Yet Hunt’s optimism pales into insignificance when compared to the outlandish claims made about almost everything by Boris himself and by his campaign team. The result is that instead of a serious contest in the midst of a national crisis, this election for leader of the Tory party has become a spectacle with only tenuous links to reality. Essentially it is a row between different strands of a broken political party.

The problem is that the Tory party leads the minority government, which can no longer function as an executive because of constitutional tinkering. Neither can it be got rid of easily and with due cause, for the same reason. So we have the double blow of a busted party in a busted system. Add to that the spending and tax cutting plans of both candidates, neither of which add up for anybody with even a rudimentary grasp of simple arithmetic, and you have a state of affairs like no other in our history.

This clearly cannot go on yet nobody any longer can predict how and when it will end. We can only hope.

Ease Back on Iran

The history of heavy handed confrontation with the aspiration of regime change, or at least a revision of political behaviors, is one of almost complete failure. At best some sort of stand off becomes the norm and at worst a pointless war begins which goes on and on and achieves little. So it is impossible to see what on earth the Trump administration expect to achieve by their current programme of isolation, sanctions and military posturing against Iran. Among the many doubters appears to be Trump himself. Having surrounded himself with Alt Right hawks he seems to be uncertain about the direction of their policies. Failure in Venezuela has not helped. Neither has the stall in progress with North Korea.

So this blog advocates a very much more enlightened policy towards one of the world’s oldest civilisations, which if more engaged constructively, could do much to ease the chaotic tensions of the Middle East. In particular the ending of the war in Yemen is a priority. This is not to say Iran is blameless, or does not make mischief to further its ends. But we allow Saudi Arabia unlimited slack in almost every direction no matter what it does. Some of that slack would work well with Iran. Try it.

U.S. Cyber Attack

If the reports of an American cyber attack on Iranian military systems are true it makes sense. The U.S. enthusiasm for deploying enormous firepower in carrier led battle fleets is awe inspiring, visible and sobering. But it is  old fashioned and might very well lead to the kind of wars without end that the Trump administration says it is keen to avoid. On the other hand disabling enemy weapons systems so that they loose operational viability is smart.

It halts the means of conflict but does so without casualties or destruction. It  demonstrates a capability which would be decisive if an armed conflict broke out or was provoked. It shows how any future war will be less about spectacular bombardment and more about hidden power projected within the cyber world.