Month: September 2008

We learn this morning that Lehman is filing for protection from creditors whilst it seeks to sell assets to sort out its financial problems. Markets are falling on the news ,as on this occasion the US authorities have not offered to rescue it directly.

I am not surprised they have declined to put up the money. There have to be limits on how much the US taxpayer can support. The massive rescues of Fannie and Freddie stretch even the long pockets of Uncle Sam.(See September 8th post).The decision on Lehmans in that sense is doubly good news. It will force the private sector to accept more of its own risks and not to expect a bail out in every case. It will also provide some much needed relief to the escalation of risk for taxpayers.

At the same time the US authorities are all too well aware of the possibility that the Lehman collapse could place strains on other financial institutions who have relied on doing business with Lehmans or have similar “assets” on their balance sheets that may need writing down as a result. So the US authorities are making yet more liquidity available to the system.

Maybe they have also encouraged the larger private banks to make available their own facility to help financial companies in trouble, which is being announced today. We are also likely to hear of the takeover of Merrill Lynch. It looks as if there is a massive amount going on behind the scenes in the USA to try to bottom this banking crisis and establish a new pattern of ownership, finance and values of financial instruments that might prove stable.

The US authorities remain alert and active, whilst the UK authorities remain sleepy and inactive. The CBI have revised their forecast for the UK economy to show a recession in the second half of this year, and practically no growth next. That must mean at least another £15 billion of government borrowing in each year, to add to the massive total the government has already committed. The UK financial positon is still deteriorating fast. The government refuses to produce its own new forecast, so it looks increasingly out of touch and behind the plot. Every knows its forecatss are wildly optimstic, so why not change them and try to look as if they want to manage events rather than be managed by them?

The problem with the Lib Dems is they are neither liberal nor true democrats.

Their lack of liberalism is obvious in their backing for a huge range of regulatory interference with our daily lives, and their supine acceptance of so much regulation made in Brussels. Practically every problem produces a Lib Dem answer of more government action and more government spending.

Their lack of belief in democracy is even more obvious. They deny us a referendum on Lisbon and want it rammed through without one. They want more decisions taken by the unelected government in Brussels. They want a system of voting that gives those voting for unpopular parties the chance effectively to vote twice. They do not accept the idea of One person one vote politics where the winning parties has to get more votes than the runners up in each seat.

I think they should be called the Euro regulator party. Their cry, when in doubt, is more EU and more regulation.
I would like to hear your thoughts on how we can have what’s in the tin clearly stated on the outside.
You can’t really call them the Green something party, as none of their Councils get top marks for Greenery from the independent Assessors.

In 1997 after the arrival of the Blair babes a joke circulated widely in political circles.
“What is the difference between a Blair babe and a shopping trolley?” went the popular jest. “A shopping trolley has a mind of its own” came the reply.

It was unfair then, for many of the men newly elected for Labour in 1997 did what the Blair babes did. They stuck to the pager messages, they repeated the inane and misleading Nu Labour soundbites, and refused to answer any difficult questions, just like their female colleagues.Maybe they believed they had abolished boom and bust and had made the Bank of England independent. Maybe now they understand they did not. Rather they created a worse boom and bust, and left the Bank floundering without the power and information it used to have to run the money markets properly.They certainly failed to provide any intelligent criticism of the executive, or to represent the needs of their constituents to keep tax and spending down to sensible levels.

Today it is some of the Blair babes who are leading the charge for a proper debate about Labour’s values and the direction of the government. They are clearly hoping to flush out a “big beast” to challenge the PM. In the meantime they are out to destablise him.

Gordon Brown will understand only too well what their game is. It is after all the game his “friends” used to destablise Blair. If you can get enough people to resign from office, aided by enough backbenchers to call for change, the position of the Leader eventually becomes untenable and he may decide to go. It worked with Blair. I doubt if it will work so easily with Brown, who still seems to want this job he has spent his adult life working to achieve. Unless the mutineers can gain more numbers quickly, this rebellion will peter out and show that Labour cannot run a Leadership election, let alone a successful General Election.

The sadness of all this is it is massive diversion from tackling the real issues of the Credit Crunch, the sterling crisis and the government financial mess. Indeed, it probably makes it more difficult for the PM to tackle these things, as his MP critics probably want him to spend and tax more, rather than understanding that it is because he has taxed, wasted and borrowed so much that we are in the economic hole we are now in.

The Lib Dems have read the polls and tested public opinion. They have been told many of us are fed up with high taxes and huge public sector waste, so they are seeking to position themselves as the waste and tax cutters.

There is no evidence from local government that this is what they do in office. There is no Lib Dem Hammersmith and Fulhan, cutting the Council Tax each year. There are plenty of Lib Dem Councillors voting to spend more and tax more.

At the national level we are told they now favour cuts in Income Tax, but what they want to give with one hand they would more than take with the other. They are after all pledged to a local Income Tax where your local Council could plunder your wage packet. They also favour financing the loathsome regional government in England from Income Tax. They support all this extra government as part of their passion for the Euro project.

This most Euro federalist of all the parties is in love with nationalisation, regulation and more public spending. We should not believe that they will cut the waste and taxes given their belief in doing the opposite in ocal government.

Yesterday we were reminded that all the regulation of the air transport industry does not stop airlines and travel companies going bust, and does not even get all their passengers home in an orderly way.

I appreciate the CAA does not have the same duties on solvency and liquidity for airlines that the Chancellor and his regulators have for banks. Nor am I advocating more regulation.

I do think, however, we should ask why such an expensive system with substantial bonds from the regulated airlines still cannot get everyone back in an orderly way? Why did the Administrator have to ground all the planes and pilots of the affected airline rather than using them to sort out the mess as the first claim on the bonded money?

I understand that the Directors of the company are to blame for getting into the financial mess in the first place. From the moment they admit they have failed, we should look to the Adminstrator and Regulator to run things better. That they failed to do as far as many passengers are concerned. Regulation just isn’t what it’s cracked up to be these days.

The men bottled the task of removing Gordon Brown, led from behind by David Miliband’s “friends”. Now we hear the women are going to have a go, with the unusual approach of asking Labour MPs to decline to nominate Gordon Brown, leaving the forms blank as they do not know who could do it better!

From the Conservative point of view we are happy to keep Gordon. He’s done wonders for our ratings. As someone who wants my country to be better run, and wants to offer some hope to people that things might get better, I want a General Election.

There is no Labour MP offering to keep their promise of a referendum on Lisbon, to spare us that nightmare. There is no Labour MP with an alternative economic strategy to beat the UK version of the Credit Crunch. No Labour MP warned in the summer of 2007 that the authorities were driving some UK banks into illiquidity. No Labour MP called for action to tackle the mushrooming public deficit, and to link that to lower interest rates. No Labour Minsiter has been able to get some power stations, roads, reservoirs and flood defences under construction on the scale needed,using private money. In other words, none of them understand the size of the problems or have an answer to the dfficulties we face.

Unhappy country. Unhappy Labour party. It is a true tragedy, with no obvious way out. It looks as if we are in for months of rows and wrong decisions, months of failure to take action to tackle the many outstanding problems.

I have just heard the most bizarre interview with a woman who was a Labour Whip this morning. She applied for a Leadership nomination form for Labour, yet she says she does not want to stand herself and does not know who to nominate!!

Is she a one off, or is the start of a process of destabilisation of the PM before the Conference? Why on earth would someone ask for a Nomination form when they have no idea who they want to contest the election, and their only anwer to every question is they want a Leadership contest?

Detective work is needed to understand this mysterious development. Who said politics was dull?

Mrs Palin has electrified the race to the White House. Apparently the ratings of the channel screening her first TV interview as candidate are soaring. Politics is interesting again! Republicans want to watch her because they think they are going to agree with her, and think she might stand up for them in Washington. Democrats want to watch her to see if they can trip her up.

I was witness to the passions she generates even on this side of the Atlantic at a lunch I attended in the City yesterday. Under Chatham House rules so I cannot quote or name individuals I listened to a succession of “liberal” women condemning Mrs Palin. They thought her Christian views unacceptable, condemned her lack of experience, disliked her approach to foreign policy and commented on how we only knew so far the views of her speechwriters when we needed to know what she really thought, with the implication that that would be far worse.

I was the only knight to ride to her support. I did so not because I support many of her views or because I have sufficient knowledge of how good an adminsitrator and Governor she is, but because the condemnation was so unfair and biased.

She was condemned for wishing to prosecute the war in Afghanistan – yet that is also Obama’s policy and he too has called for more troops to go there. If you condemn Palin for it you should condemn all leading US politicians for it, and Gordon Brown too.

She was attacked for allowing someone else to write her speeches. I thought that was what Obama – and most other US and UK senior politicians did. I am unusual in always creating my own speeches and blog articles. Just because Mrs Palin uses a good speechwriter does not mean she fails to direct and amend the speeches they write.

She was attacked for being inexperienced, yet I thought she was the only one of the four principal contenders for the White House who had ever run anything.

She was attacked for mentioning God. Apparently you need to be an atheist to run for office.

There are lessons from the Palin effect for the UK. Because Mc Cain is a maverick within the Republican party, who gets on well with Democrats, he needed someone who could engage and motivate the Republican base if he was to have any chance of victory. Mrs Palin so far has done that brilliantly. Republicans trust her and like her views, so they will now work and vote for the ticket.

Because Mrs Palin uses stronger and clearer language than most spin age politicians she communciates directly with more people. Some will dislike her and react strongly against, but many more seem to be liking what they hear and are reacting positively.

If you want to revive interest in politics it is necessary to cut through the miasma of politically correct press releases and pager statements and say something different. It is necessary when communicating to motivate some and annoy others.

Mrs Palin has made Mr Obama look ordinary, tired and very negative. That’s not good for the candidate of hope.

David Blunkett has today told us that more children could go to school by bus, relieving Mums and Dads of the chore of driving their children to school, and freeing our roads of many cars on the school run. It’s an obvious point to make. I wonder if they will do anything about it?

Between the ages of 7 and 10 I walked to my primary school, which took about 20 minutes and involved crossing a couple of busy roads.
From 10 to 14 I took a regular service bus to my secondary school, around 2.5 miles from home, walking to the bus station to get on it.
From 14 to 16 I rode a bicycle to school, and in my last year as a 16 year old I was allowed to ride a motor scooter and park it in the school grounds.

I am told that the UK was a much safer place for children when I was at school than it is under this modern Labour government. People today say you could not possibly allow primary children to walk on their own. If this is so maybe the supervised walk is necessary with an adult taking care of groups of children walking from given estates, as a practical alternative to the bus
Asking secondary school children to find their own way to school is surely part of growing up? As I doubt we will suddenly see fleets of dedicated yellow buses on our streets anytime soon using existing service buses and trains or their bicycles would encourage independence and responsibility. Surely they have mastered the highway code and the need for care when crossing streets by the time they are 11?

One of the surprises about global warming is how cold it has become for two summers in a row in the UK.
I always reckoned to turn my heating on at the beginning of October after resting the boiler for five months and keeping the bills down.
When visitors came one week-end in August I relented and put the central heating on for them. After sitting in my office with woollies on for the first few days of September, I gave up and put the heating back on so I could cosy up to the radiator.
I don’t feel I have had a summer this year. My main memories are of cricket matches I wanted to play in cancelled owing to rain and the worst weather on my English holiday break I ever experienced.