Why is the USA so much richer than the EU?

 

We are always told the  EU model is the best in the world, combining free enterprise to deliver the goods with bigger government to enforce redistribution and social justice. We are told by many that this model gives us all a better lifestyle. We are told that the wonderful single market provides the driver for more jobs and greater prosperity.

I have often commented on how the single market measures are frequently counter productive, leading to higher costs and fewer jobs. I have regularly pointed to the very poor record of the Euro area on employment and unemployment, showing they have got a lot wrong. Today I want to look at the big picture of overall income levels in the EU.

In 2013 the average US income was a healthy $53,000. The average EU income was a much more modest $34,000. If you allow for the fact that some of the smaller and more recent members of the union have further to catch up with the EU average, you could get the adjusted EU level up to nearer $40,000. So each person in the USA is on average somewhere between one third and 60% better off than the average EU citizen, depending on how much grace you wish to give the EU for its more recently joined poorer members.

These are huge differences. Why is no-one at EU level worried about it? Why is there no plan to ask what does the USA get right economically that the EU gets wrong? Why is their so much anti American rhetoric and so little understanding of the free enterprise system which has greater sway in the US than in the EU?

I am no uncritical fan of all things US. I am an opponent of neo con military interventionism.  The USA has more than its fair share of rules and lawyers seeking to slow down its enterprise economy. Compared to the EU, however, it gets a lot more right economically.

Take energy policy. It is busy producing more of its own energy and going for cheaper energy to fuel its reindustrialisation and heat its homes,. At the same time the EU is busily shutting down cheap energy facilities and making  itself ever more dependent on a lethal mix of very expensive and unreliable renewables and imported gas from Russia.

Or take transport. The USA provides roadspace for flexible cars and trucks to get people around its single market. The EU does what it can to make driving more expensive and more frustrating at every turn.

Look at modern technology. The USA leads the world with its digital revolution. The EU struggles to keep up, and mainly uses large US based service providers to automate its own activities.

The USA dominates the university world , the world of knowledge, with most of the world’s leading institutions. Only the UK from the EU manages a couple of entries in the top ten.

There is no evidence that EU membership is helping us catch up with the economic success of America. There is a disappointing lack of energy about the EU when it comes to helping business and entrepreneurs. The EU is in the slow lane, and proud of it.

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3 good reasons why NATO must say NO to the Ukraine

 

The Ukraine’s application to join NATO on the eve of the NATO summit is an unhelpful intervention in global politics.

We were told by the EU and others that the EU wished to sign an Association Agreement with the Ukraine to promote more trade and friendship. It was not for military purposes. The Agreement belied that, as Russia pointed out, as it did include a clause about defence matters. To compound that with offering NATO membership would alarm Russia.

There are three good reasons to say No to the Ukraine. The first is we do not know what country  would join. Is it Ukraine on its old boundaries? In this case we have the dangerous anomaly that part of a NATO country would be under Russian control. Would it be on current de facto boundaries? In which case parts of a NATO country would not be under the military and civil control of its main government. Would it be the Ukraine minus its Russian speaking pro Russian areas? That would be unacceptable to the current Kiev government.

The second is NATO is in no position to guarantee the borders and territory of Ukraine from all comers. The Ukraine is too close to Russia. We could not protect it fully at acceptable military cost to ourselves, and without undue death and damage to the Ukraine if some  of it is taken by Russia as Crimea has been.

The third is we should not be willing to encourage the government in Kiev all the time it is part of the violence and death being visited on its own people, whatever the rights and wrongs of who started it and who is mainly to blame for its continuation. NATO should encourage democratic and peaceful regimes, who can keep their countries well governed by words and votes, not bombs and bullets.

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The words of Douglas Carswell and political correctness

 

Let me take as my text today some words of Douglas Carswell. I know how much some of my readers admire him. I will take words he has written since deciding to join UKIP, as some of you seem to object to quoting anything he said before this week.

“I am not against immigration”. ” The one thing more ugly than nativism, is angry nativism”. “We should welcome those who want to come here to contribute……There’s  hardly a hospital, GP surgery or supermarket in the country that could run without that skill and drive.” That so far is what we know of his current position on the hottest topic of the day. It is a generous sentiment, but  not a crowd pleaser with his UKIP audience. His only concession is he does think the UK authorities rather than the EU  should determine policy in this area, as I do.

I have been thinking a lot recently about political correctness. The reflex reaction of many Conservatives and UKIP ers is to condemn it, claiming it is one of the reasons so many mistakes have been made in public policy. The most recent mass tragedies of childcare in Rotherham are seen as an example, as it was not politically correct to draw attention to the origins of many of the perpetrators of the crimes. Political correctness seemed to get in the way of reporting crime and pursuing criminals.

Mr Carswell sees political correctness as politeness, and welcomes it. I can see both his view and the conservative reaction to it. The  truth is as a society we are struggling to find a language which does not offend a wide range of different religious and ethnic groups in our society, which at the same time helps bind us to a common outlook and also allows us to condemn and prosecute those who violate our common law and values.

I have spent all too much time on this site protecting some contributors from themselves when they seek to generalise wildly and unfavourably about individual religions, countries and ethnic groups. In this I am with Mr Carswell. It is not helpful or polite to accuse a whole religion or a whole race of general misconduct, bad attitudes or anti social approaches. It is wounding to many members of that group who may themselves be decent and law abiding, and who not share the bad characteristic ascribed to the group. I do not extend the same degree of protection to my own groups – white, male, Conservative! I understand people’s wishes to let off steam and air their frustrations, and my groups have usually learned to wear thicker skins.

Affording protection to differing religions, social values and attitudes is a crucial characteristic of an advanced mature democracy. Upholding a common law is another. We are tolerant of people practicing their own religion, but we do not intend  to base our civil and criminal law codes on a particular religious view. We are happy for people to live as they wish, subject to a common law on matters of wider importance like property rights, marriage, and the upbringing of children. It is always a difficult balance to strike.  Parliament is constantly adjusting it. However, today to be British means agreeing that girls and boys should have equal opportunities, that all should have a full time  education to 16 with other options to 18, that you only are  married to  one person at a time, that violence – or physical punishment –  is not allowed within the family any more than outside it. Those who disagree with this and related matters have to campaign for change by peaceful means.

Other matters cause tensions. We do not set out as legislators to tell people generally what they should wear,  and what they should eat. In extreme cases we do. It is not permissible in the UK to walk about in public revealing intimate body parts. There are also strong taboos, as with our social dislike of   eating  horse and dog meat. Those who are unhappy about the otherness of some people’s dress and lifestyle have to accept that there are limits to how far legislators should go in banning items. Similarly those who wish to live their lives differently need to consider the impact it has on the wider community, their chosen country. Even with good law codes to encourage and enforce toleration in most things, there will be prejudices against people who differentiate themselves too much by dress, attitude and demeanour.

In a country of volunteers who wish  to be here, we want more common feeling and shared values.  Divisive language achieves the opposite. Divisive conduct is either against the law, or damaging to the very society people have joined.

 

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A new Clerk for the Commons

 

Having annoyed many you yesterday by explaining why I do want a referendum on the EU and how we would get that , let me have another go today at winding some of  you up by telling you the background to the appointment of a new Clerk.

The Clerk elect for the Commons was chosen following an open competition. This was the first time the post had been properly advertised and open to all comers.  As I understand it, a long list of 8 candidates was drawn up and all were interviewed, to create a short list  of 3. These 3 were then interviewed again and asked to make a presentation as well. The interviewing panel was seeking to chose the best person for the job, taking into account the candidate’s ability and knowledge both as a potential CEO of Parliament and as chief adviser on Parliamentary procedure.

The panel doing the work of selection was the Speaker,  Andrew Lansley (Leader, then former Leader of the Commons); Angela Eagle (Shadow Leader) John Thurso senior Liberal Democrat, Margaret Hodge The Chairman of the Public Accounts Committee and the Parliamentary Ombudsman.

I know of no reason why this panel would either simply do the Speaker’s bidding or why it would wish to chose an unsuitable person. Nor do I see why the Speaker anyway would want a poor candidate to win. No-one can accuse the panel of party bias or special party angle in making the selection, as it comprised 1 Conservative, 2 Labour, one Liberal Democrat and 2 independent members.  Nor would you normally accuse Margaret Hodge or Angela Eagle or Andrew Lansley of lacking independent judgement or confidence to make a decision of their own. None of the MPs on the panel had any reason to wish to please the Speaker by backing his choice against their own wishes or judgement.

I myself do not know if I think the candidate chosen was the best or the most suitable, as I did not meet any of the candidates. I do know that a proper process was undertaken. Only if Parliament insists on introducing an additional hurdle in the selection process with a Parliamentary hearing where the single candidate could fail could there be a change to this recommendation. This would be a discourtesy to the successful candidate who was not told to expect that.

I have no reason to trust the couple of critics  who have emerged to challenge the appointment. I have  no basis for believing that the MPs and Ombudsman we asked to do the job have failed to do it sensibly. In large organisations things do have to  be delegated and you do have to trust the outcomes in most cases.

Posted in Uncategorized | 88 Comments

Mr Carswell

 

Today I know many of you will want to post on this topic whatever I write, so let me give you the heading you want to let you say what you wish.

I have little to say on the topic. I find Mr Carswell’s timing curious. We have moved the Conservative party to say that our current relationship with the EU is not working for the UK, and needs to be changed. We have moved the leadership to offer a renegotiation. More importantly they have offered a referendum on the results. That means if they are unable to negotiate a decent relationship based on trade and political co-operation which allows us to have self government back over the things that matter, the UK voters will be able to vote for out. The party leadership also now recognises that there are circumstances in which the government would have to recommend exit, if the EU does not come up with sensible proposals for the UK.

Given this, what matters now most of all is a Conservative majority in 2015 to deliver the renegotiation and the referendum. Had Mr Carswell resigned from the Conservative party and from Parliament a couple of years ago before we had achieved the changes of policy we needed I could have understood, though I would still have argued we had every prospect of winning the arguments within the Conservative party, as time proved we could. To leave now when we are on the cusp of success in changing the relationship or simply leaving the EU altogether on a  vote of the people  is curious.

I note that the incumbent UKIP candidate for Parliament in Clacton understandably does not wish to give way to Mr Carswell to be the UKIP candidate. It just shows how difficult any deal between UKIP and the Conservatives would be, if UKIP cannot even work out who will be their candidate in Clacton for the by election to chose a new MP for around just 5 months service.

Mr Carswell we are told is a man of principle. You should therefore take to heart his recent statements on the topic of the EU and the PM:

 

“In order to exit the EU we need David Cameron to be our PM”

“Only the Conservatives will guarantee and deliver an In/Out referendum. It will only happen if Cameron is PM”

“Nothing we do must make the prospect of an In/Out referendum vote less likely”

Cameron’s Bloomberg speech on the EU was “100% right”

Words of Mr Carswell to treasure.

Posted in Uncategorized | 261 Comments

Mr Salmond “wins” the debate to keep Scotland dependent

 

I watched the Darling/Salmond debate on Monday. It made grim and repetitious watching. According to the polls and pundits Mr Salmond “won”. He did so by failing to answer some questions, and by taking a very  passive or conservative line on the things that matter.

Would this brave heart champion of Scottish independence like his new country to have its own currency? No

Would this independence seeker want Scotland to have its own Central Bank? Certainly not.

Would he like Scotland to be free of the all entangling laws and directives of Brussels? Perish the thought.

Did he want to say good bye to all Royal Navy ships and shipbuilding as they became the navy of a different country? Of course not.

Would he pay for and build Scotland’s own naval fleet? There was no wish to spend much money on that.

Would he continue with the same non Scottish  Queen as the English? Not even worth asking.

Would he keep the NHS as developed  in Westminster? Yes, in every last historic detail. One of the main aims of “independence” is apparently to stop change in the NHS inherited from the UK.

Would he keep the welfare system developed by Westminster? Yes, in every detail, reversing a few recent cuts.

How will he pay the pensions as North Sea revenues disappear?  He sees no diminution in North revenues, and ignores the decline in North Sea output from 4.5 m barrels a day to 1.5 million and falling.

 

To me he came over as a tired old politician seeking to reassure many voters who are alarmed by change that “independence” would not change much, and would certainly not mean independence in many important respects. How can you claim to be an independent state if you use the currency of your powerful neighbour and have to join the EU on terms which will entail considerable sacrifice of decision  taking? What will be exciting and different about Salmond’s Scotland if the NHS and the welfare system have to be left just as they were circa 2010? How does that make Scotland a more equal society?

 

Posted in Uncategorized | 122 Comments

The EU helps get rid of two more governments

 

The EU is a destructive force in European politics. I have lost count of how many governments have been toppled by the economic policies the Euro demands. The French government is the latest casualty, with President Hollande dismissing his Ministers following the opposition of some of them to the austerity policies they are forced to follow to comply with EU and Euro requirements.

If a policy of business  tax cuts and spending cuts is to work in France, as it could, it has to be accompanied by an easy money policy from the Central bank and banking system. If you are going to reduce the public sector you need to help augment the private sector.  In the Euro area they have decided instead to run a tight money policy by demanding ever more cash and capital from commercial banks to support their lending, and declining to take any offsetting special monetary measures as the US, UK and Japan have done. Ministers complaining about the policy have been dismissed so the President can find more compliant pro Euro Ministers.

Meanwhile, a different kind of EU policy has helped destabilise the government of Ukraine by heightening the disagreements between the pro EU and pro Russia factions within the country. The overthrow of the previous elected President helped trigger a chain of bad events. Now the most recently elected new President has his way and is going to require early elections to a new Parliament. He says he cannot work with the current representatives from the Donbass region who are too pro Russian for his liking.

The Presidential election was brought forward by almost a year, and the new President was elected without any votes being cast in the Crimea, and with most of the polling stations in the Donbass region unavailable. His intention to hold Parliamentary elections on October 26th 2014, three years before the end of the current Parliament’s full term, will also presumably lead to an election in which the most  pro Russian parts of the country will be unable to vote. Clearly the Crimea is now under Russian control and will not participate at all.  How many of the people in the Donbass region will this time have peaceful access to a polling station? If the pro Russian part of the population does not feel they can have a proper influence on the election it does not augur well for the restoration of Ukrainian unity and peace.

These are yet more reasons why the EU should do less and be more mindful of national and local democracy. Democratic government only works if the consent of all the people to the method of government is maintained. This has been broken in the Ukraine, and is being strained in parts of the Eurozone whose economic performance is poor.

Posted in Uncategorized | 132 Comments

Students and migration – Evan Davis asks good questions

 

Mr Davis asked a couple of good questions yesterday on the Today programme. Faced with Michael Heseltine saying student numbers should be left out of the net migration statistics, he asked him how this would make any difference, as in a steady state the same number leave their courses at their end as start courses at the beginning. It should on this basis make no difference to the net figure.

Lord Heseltine said this was a good point which he then proceeded to ignore, as he was clearly unable to answer it. What he should have said was there had been great growth in student numbers coming to the UK under Labour. Many of these came to institutions other than universities, including a large number of bogus colleges which gave cover to young people to enter the country and then to find work without the correct permits.

The Coalition government has taken tough action to close down a large number of these bogus colleges. In the year to June 2010 the then UK government granted 320,000 student visas. In the year to December 2013 this had dropped to 219,000. The fall occurred in the non university numbers. The government saw that it could not control the overall totals of new migrants without controlling student visa numbers, because this system had been so abused. It made sure that all students properly qualified to come to a UK university are able to do so, and are welcome.

Mr Davis then asked Lord Heseltine to discuss the wisdom of having a net migration target, suggesting it was something sketched on the back of an envelope. His guest took the easy option, talking about the lack of envelopes in use in framing policy, and praising civil servants for the work they do to flesh out Ministerial policies. He once again ducked the interesting question of whether we need a gross or net target.

What he could have said was a net target matters because public service provision is most sensitive to the total number of people in the country needing public  service. Controlling net migration offers some control over the amount of extra roadspace, new trains, and extra health and educational capacity we need as we respond to the changing population. If one extra person enters the country at the same time as one person emigrates there is not the same increase in demand as if an extra one person enters.

I think we need to look at both net and gross migration. You could have  a situation where the public spending consequences of no net migration need managing, depending on who leaves and who arrives and their requirements for public spending support.  You need to look at the impact of large amounts of change in the population either way. Big change in population can also have large geographical impacts, if many arriving choose to settle in the faster growing more populated areas, whilst those leaving come from a wider geographical base.

In the year to September 2013 the net migration figure was still at 212,000 for the most recent year. The gross inward migration figures was 532,000, with 320,000 leaving. Under Labour gross inward migration reached 600,000. Within this inward  migration from non EU countries was well down on the Labour years,  but EU migration was increasing.  We need to be concerned about gross as well as net.

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Is the Islamic state of Iraq and the Levant our only enemy now?

 

There is huge danger in the west’s rush to oversimplify the complex civil wars in the Middle East. I share the western revulsion at the way an American journalist was murdered by a representative of ISIL. Like others I am appalled to see reports of people killed or removed from their homes by ISIL fighters. We should not let these particularly evil acts blind us to the many murders and atrocities committed by a range of other groups and armies in this war torn part of the world as well, nor to the difficulty of achieving better government through another set of military battles.

There is no nice way to kill someone. To the dying there is no nice killer. People are just as dead in the Middle East if they have faced a bomb from Assad’s airforce, or a shell from the Iraqi democratic government’s army , or a bullet from one of the Libyan militia groups, or fire from freedom fighters in various provinces  as those are who have suffered from the atrocities visited by IS forces.

We should not suppose that western military involvement will allow the surgical removal of ISIL fighters with no damage to anyone else. Sunni populations angered by the conduct of the Baghdad government have sometimes  given their support to ISIL forces as they embed in civilian areas. More moderate opposition groups have co-operated with ISIL in Syria to try to get rid of Assad.  We also need to ask what will replace ISIL  when the forces against it are successful , and how would we assist in the construction of stable government in place of ISIL  imposed rule?

Today many in the media and some armchair generals wish us to believe there is a single group of particularly evil insurgents called ISIL. If we just help other forces to defeat them all will be better  and the Middle East can look forward to a more peaceful  future. Will it? Doesn’t it require huge political efforts from the governments of Iraq and Syria to win over their people and establish a new state politics which all the people can buy into? Or does it require new states with new borders reflecting the allegiances of the populations?

Yesterday came news that a different militia has seized control of Tripoli airport. This grouping we read may well contain Islamists within it. They do not claim to be ISIL forces. Following western military intervention in Libya the dictator was killed. Instead of the country making good  progress to a proper democracy, the Parliament cowers in part of the country and has little or no control over Tripoli, Benghazi and other important centres of population in its own lands. Huge damage is being done to the country’s infrastructure as warring bands fight over once important facilities which can no longer function properly. People are dying or suffering from the break down of law and order and the lack of civil power to control the streets and disarm the armed bands. The more the economy suffers, the more young men despair of having a decent job and a future by staying law abiding and peace loving. This should remind us how important the politics is after military intervention. Many Libyans do not see it as progress to be living in such a dysfunctional state.

In Syria some now think we should back Assad as he fights against his own people, carrying on with his bombing and shelling civilians. Others have wanted  to co-operate with a Syrian opposition to get rid of him which includes a range of Islamic extremist organisations as well as some more moderate opposition forces. Our indecision should give us pause for reflection. Maybe the west cannot settle the future of Syria? Maybe only Syrian politicians and the people living there can settle their future.

The list of banned terrorist organisations drawn up by the UK is long, and includes many different Islamic extremist movements in the Middle East. Are we now saying only one of these, ISIL, matters?  Ansar al Sunna, Asbat al Ansar and the Libyan Islamic Fighting Group, for example, are on the UK banned list.  The Syrian opposition includes  Al Nusra, the Syrian Islamic Front, the Syrian Islam Liberation Front and the Islamic Front, as well as the Muslim Brotherhood  which has recently been thrown out of elected office in Egypt for its conduct. What do we think of these organisations today?

The modern Middle East is a far more complex place than the present analysis of ISIL against the rest would suggest. Law and order and the operation of state civil power has broken down in many parts of Syria, Iraq, Libya and elsewhere. The states respond by  firing  on their own citizens, which intensifies the civil wars and often makes things worse. These countries are subject to marauding bands, making a way of life out of terrorising people, robbing, looting and raising money for their own purposes. The group called IS  currently seem to be the most threatening  at this destructive and violent way of life, but they are by no means the only ones. People draw huge areas on maps claiming them as IS territory, but in practice IS only controls those places where it has enough loyal and co-ordinated fighters. Much of it is probably local gang warfare, with fluctuating control  by people with weapons.

I do not see how further western  military engagement can settle these war torn countries. It requires high political skills to design a system of states for the Middle East that their peoples can accept, and to draw the loyalty of all the different groups into a fair system for governing them. If it is to be done on current borders, then it requires the governments of Iraq, Libya and Syria to behave in very different ways to the way they are doing, and to show they do have the political ability to disarm the warring factions, disband the gangs and give them all something more worthwhile to live for. It is easy to see how western power can help remove nasty men from office, but more difficult to see how western power can help secure good men - let alone women –  to rule who can recreate sensible civil government. It also requires the main Shia and Sunni powers who are involved in these various civil wars to come to an understanding between themselves about their own spheres of influence.

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Why does the EU like new products to perform worse than older ones?

 

Whilst most of the media and many people are worried and thinking about war and peace in the Middle East and Ukraine, up pops the EU with its latest idea. It has banned powerful vacuum cleaners.

Why? If people want to buy them and manufacturers wish to make them, why shouldn’t they? Has the regulator thought about the possibility that a less powerful vacuum cleaner might not pull up all the dirt in a timely way? Might it not need more passes of the carpet to get them clean? This could use more energy than having a more powerful machine in the first place.

This change follows on from others which mean that  we have a generation of products that often work less well than the older ones they replaced. New light bulbs offer less light than the older banned ones. As a result, far from saving energy, people are driven to go and buy extra reading lights and lamps to boost the light available. Newer toilet flushes flush less water. As a result you often have to flush them two or three times to clean sufficiently, delaying you and wasting more water and effort than the older better ones.

Some of the changes for the worse are home made, like the BBC going digital. Their digital switch meant I lost two older tvs completely that were working fine before the switch. The new digital one I bought gave me several months of appalling pictures with frozen frames and lost pictures during the transition. Sometimes the machine has  a hissy fit and you have to sit down and re programme it before it will function again. Now it seems the BBC have either worsened their normal radio signals or have some problems with them, so presumably more people will  be tempted to buy the unloved digital radios in the hope they  might work.

Most modern technology is great. Most things about the private sector world of products and services is greatly improved on the offers of the last century. Yet when government gets involved in setting too many standards, banning things and changing the delivery mechanisms we can end up with worse and dearer. Just leave us alone.

Posted in Uncategorized | 137 Comments
  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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