What a fuss about nothing. If the Conservatives had taken money from a British company (legal) as a conduit for money from an overseas resident (illegal) that would have been an interesting story and a complex web to untangle. Fortunately we learn they showed judgement and took no such donation.
Month: October 2008
Four schools go through to the next round of the Wokingham Schools’ Debating Competition
The Emmbrook School, the Holt, St. Crispin’s and the Willink all advanced to the semi-finals in the annual Wokingham Schools’ Debating Competition organised by the Rt. Hon John Redwood MP. The first round of the competition, held at the Emmbrook on Thursday the 9th October, saw the home team of Adam Connell and Florence Curtis join Anna Carter and Charlotte Lesbirel of the Holt go through to the semi-final. A week later, on Thursday the 16th October, Albert Bezman and Stephen Gillespie of St. Crispin’s and Lawrence Hill and Dominic Murray-Vaughan of the Willink also made it through.
The first two rounds were chaired by the former leader of Wokingham Borough Council, Mr. Frank Browne, who presided over proceedings. A panel of judges made up of Conservative Councillor Annette Drake, Liberal Democrat Beth Rowland and Wokingham News journalist Rebecca Johnson ranked the winners based on a number of criteria including the clarity of their arguments and the ability to think on their feet.
Speaking about the result, John Redwood said: “The judges probably had the hardest job of the evening as the standard of debating amongst all participants was very high. The participants demonstrated an ability to formulate their arguments and argue their case in front of an audience. These are valuable life skills that will be appreciated by any future employer”.
The semi-final of the debating competition will take place at 7pm on Thursday the 20th November at Wokingham Town Hall. The participating teams in the semi-final will be given the motions to be debated a two weeks before the event. The two winning teams will progress to the final on Friday the 28th November at Wokingham Town Hall, where the winning team will receive the John Redwood Cup for debating and the opportunity to spend a day in the House of Commons with John Redwood.
The debating competition was made possible by the generosity of the sponsors Royal Bank of Scotland, Classicstone Properties, Mr. Bill Clark, Clifton Ingram, 3M and Ticheners.
For more information and for photographs of the participating students, please contact Carl Thomson on 020 7219 4205.
Government in debt – now at £1.8 trillion
Readers of this site will know that I last estimated government borrowings and pension debts at £1.5 trillion at the time of Northern Rock. Today a new publication estimates it at £1.8 trillion, reflecting the increase in debts to pay for the banking rescues, the further build up in pension liabilities, and the general overrun on public spending and borrowing this year so far. Brooks Newmark has compiled his figures from official sources where possible, and brought together official government borrowing, public-private partnership borrowing, Private finance initiaitive borrowing, borrowing to fund bank capital and loan books and pension deficits.
The BBC wanted to score a couple of points against him this morning. The first was to remind him that the Conservatives did not include pension liability in the figures they used to publish for government debt when in government. That is correct. Mr Newmark responded that this government made companies put pension deficits on their balance sheets, and is lecturing us all on the need for transparency, so they should show the way in their own figures. The second was any incoming Conservative government would not want to change the figures in this way. I trust any incoming Conservative government would immediately order a proper audit of the figures, and publish the true position of the government accounts. Having an honest statement of the starting position is going to be essential to clearing up the mess.
Borrowings and other debts at 120% of National Income represents too large a risk for taxpayers. It is even worse than those figures imply, if the government goes ahead and makes RBS a subsidiary of the state. RBS has a £1.9 trillion balance sheet, larger than our National Income, so the taxpayer would be on risk for a lot if the bank were to start losing money under nationalised management. Northern Rock has been loss making since nationalisation.
A programme to cut the indebtedness of the state would begin by finding other ways to recapitalise the banks than buying shares with public money. It would move on to offering a different deal on public sector pensions for new entrants, which at least entails employee contributions which are then invested in a fund – like the MP and Local government schemes – instead of the pay as you go approach of the civil service. It might also entail only offering new entrants defined contribution schemes rather than final salary schemes to cut the risks. It would certainly include proper controls over administrative and advisory staff numbers, to fight the battle of the bureaucratic bulge.
The government has spent too much and borrowed too much before the recession begins. Now the red ink starts to flow seriously owing to the recession it is going to cause big problems ahead for state finances.
Can we spend our way out of recession – the BBC/Labour/Guardian new question
(WRITTEN FOR GUARDIAN COMMENT)
I am asked if we can spend our way out of a recession? I write against a silly political background, where the left are trying to annex Keynes again, as if he were a left wing figure whose views had been buried by Conservative monetarists and deregulators. The truth is very different.
Margaret Thatcher kept her copy of the 1944 White Paper on employment, which incorporated some of Keynes’s perceptions. She used it in one of her big party conference speeches. Conservative economists working since Keynes have usually drawn on his insights as well as the views of others. It was a Labour Prime Minister, James Callaghan, who officially incorporated monetarist thinking into UK government economic policy making, when he recognised that more public borrowing in an inflationary era would make matters worse.
Of course in one sense you can only overcome a recession by more spending. A recession is insufficient demand chasing too many goods and services , leading to job losses, falling prices and cuts in output. The issue is not whether we need more demand or not, but how you bring that about. Confidence is a precious flower, and can be easily damaged if governments take the wrong decisions.
The priority is to encourage more private sector demand, because it is private sector demand which is falling sharply. You do that by cutting interest rates substantially. I have been calling for cuts to head off recession for many months. The authorities are far too slow, persisting wrongly in thinking inflation is next year’s problem when recession is next year’s problem. Lower interest rates feed through immediately to borrowers whose rates are linked to MLR, and later will benefit others as money markets start to function better.
We need more confidence and cash in the system. That is why the Conservative leadership has backed the banking package in its entirety, to give it the best possible chance of succeeding. Until there is more confidence there will be insufficient private sector demand. The gap will be too large for an overborrowed public sector to be able to fill, even if the government took the risk of expanding public borrowing even more than they are already doing.
If the government presses ahead with borrowing £37 billion for bank capital its scope for further borrowing to undertake counter cyclical works will be even more limited. I think they should spend some time amending the package, to get as much of the new banking capital from private sources as possible. This would leave them with a little more flexibility.
As it is, we are facing a huge overrun on borrowing compared with budget. The downturn itself and other policy changes announced so far have probably boosted borrowing by £20 billion this year, on top of the £37 billion for the banks. This means a borrowing requirement forecast at £43 billion could exceed £100 billion. Government needs to keep confidence in its own powers to raise money. These figures are large. Given the delay in trying to get new larger capital projects off the shelf and into action, and given the high borrowing requirement, I do not see a lot of scope for the government on its own to spend us out of recession on this year’s budget. It has to find other ways of allowing the private sector to pick up.
Guardian: Comment is Free
I am asked if we can spend our way out of a recession? I write against a silly political background, where the left are trying to annex Keynes again, as if he were a left wing figure whose views had been buried by Conservative monetarists and deregulators. The truth is very different.
Margaret Thatcher kept her copy of the 1944 White Paper on employment, which incorporated some of Keynes’s perceptions. She used it in one of her big party conference speeches. Conservative economists working since Keynes have usually drawn on his insights as well as the views of others. It was a Labour Prime Minister, James Callaghan, who officially incorporated monetarist thinking into UK government economic policy making, when he recognised that more public borrowing in an inflationary era would make matters worse.
Of course in one sense you can only overcome a recession by more spending. A recession is insufficient demand chasing too many goods and services , leading to job losses, falling prices and cuts in output. The issue is not whether we need more demand or not, but how you bring that about. Confidence is a precious flower, and can be easily damaged if governments take the wrong decisions.
The priority is to encourage more private sector demand, because it is private sector demand which is falling sharply. You do that by cutting interest rates substantially. I have been calling for cuts to head off recession for many months. The authorities are far too slow, persisting wrongly in thinking inflation is next year’s problem when recession is next year’s problem. Lower interest rates feed through immediately to borrowers whose rates are linked to MLR, and later will benefit others as money markets start to function better.
We need more confidence and cash in the system. That is why the Conservative leadership has backed the banking package in its entirety, to give it the best possible chance of succeeding. Until there is more confidence there will be insufficient private sector demand. The gap will be too large for an overborrowed public sector to be able to fill, even if the government took the risk of expanding public borrowing even more than they are already doing.
If the government presses ahead with borrowing £37 billion for bank capital its scope for further borrowing to undertake counter cyclical works will be even more limited. I think they should spend some time amending the package, to get as much of the new banking capital from private sources as possible. This would leave them with a little more flexibility.
As it is, we are facing a huge overrun on borrowing compared with budget. The downturn itself and other policy changes announced so far have probably boosted borrowing by £20 billion this year, on top of the £37 billion for the banks. This means a borrowing requirement forecast at £43 billion could exceed £100 billion. Government needs to keep confidence in its own powers to raise money. These figures are large. Given the delay in trying to get new larger capital projects off the shelf and into action, and given the high borrowing requirement, I do not see a lot of scope for the government on its own to spend us out of recession on this year’s budget. It has to find other ways of allowing the private sector to pick up.
Wokingham News
Most of us have to accept we are going to lose from this financial crisis.
Here in the UK the financial losses are going to be large. All homeowners are going to lose a substantial part of the capital value of their home. Some homeowners will lose their home, as they give up the struggle to pay the mortgage. Anyone with shares held directly, or through an investment fund or through a pension fund has already lost a lot. People owning businesses will find it more difficult to make a good living in the year ahead, and the value of their business will fall.
The issue for the authorities is simply this. How big a crash do they want? The Central banks triggered all this, by first allowing an overexpansion of credit and debt, and then deciding they wanted to bring the borrowing party to an end. Some of the banks lent too much to the wrong people on a large scale. Now we need to know how much they want to cut total debt by?
Meanwhile the UK is having one of its idiotic arguments about whether we need more or less regulation, as if this were the issue. I know of no serious commentator on money, credit and the economy who thinks the authorities should wash their hands of responsibility for controlling total money and credit in the system. The issue is not whether to do it, but how to do it. Clearly the method chosen in the last ten years did not work. Credit was not properly controlled on the way up, and is now imploding dangerously.Large amounts of new mortgage regulation did not regulate the main things that matter – how much credit is lent in total, and how much to each individual in relation to the home value and income.
Concerted interest rate cuts on a big scale would help a recovery . It would also take some of the pressure off borrowers. To those that say this in unfair on savers, I say it is necessary for savers protection. As the Icelandic banks have shown, it does not help to offer savers a good rate of interest if the borrowers that pay the interest to the banks can’t afford it and the bank runs out of money to pay the savers.
Reading Evening Post
On Wednesday 8th October at a little after noon the Prime Minister announced a 50 basis point cut in UK interest rates to the Commons. He told us the Governor of the Bank had decided it. The decision came a day before the Monetary Policy Committee had completed its usual monthly processes to settle their view of interest rates. The statement did not say rates were being cut in order to hit the inflation target, but to take part in concerted action around the world to help with the banking crisis. I agreed with the need to take urgent action to cut rates, and am glad the authorities did it.
I have long argued there can be no such thing as a truly independent Bank or Monetary Policy Committee in a democracy. Parliament – or Congress and President – can leave an “independent” body free to do these things as long as they like. However, this freedom will only be extended for as long as the “independent” body does it job well and the system still pleases the people and elected politicians. Once there are worries, concerns or doubts, it is likely the elected officials will reassert their direct power, or change the system. The US system has always required the Fed to support the economic policy of the Administration. Mr Darling has reminded us that the Bank of England too has another duty as well as curbing inflation.
You could argue that the lack of independence of the MPC was obvious as long ago as December 2003, when the government changed the inflation target from RPI to CPI and from 2.5% to 2%. This in effect encouraged the MPC to set lower interest rates, as the CPI was going up much less quickly than the RPI. You can argue that the lack of transparency over who gets reappointed to the MPC and who does not was another weakness in its structure. Surely no sensible person after yesterday can say the MPC is independent?
I do not mourn the passing of the “independent” phase of the MPC. This is the body which kept rates too low in 2003-6. Its main aim was to keep inflation down to 2%. It has shot up to two and a half times that. It failed in the good years to be tough enough. It failed to control prices as advertised.
Now we are on the threshold of bad years it has been too tough. Its actions in keeping rates high as we peer towards recession will increase the number of people who lose their jobs and their businesses during the downswing. Once again the MPC seemed to be driving by looking into the rear view mirror, to capture the inflation it has already allowed, rather than looking through the windscreen to see the crunch ahead.
Let us hope we now can have a more intelligent debate about how to control money in a democracy. It is a great pity that the “independent” MPC did not succeed in curbing excess money and credit growth in the good years. We need new people or a stronger system that will control inflation next time round, when the extent of public debt will lead some to hanker for more inflation to reduce the liabilities. In the meantime we need an MPC and Bank fully committed to countering deflation.
I am urging the government to take more action to head off the worst of the downturn. If interest rates stay too high, if banks are starved of cash, the rest of us will feel the pinch. It will mean expensive overdrafts, reduced or cancelled bank facilities, more pressure on small businesses, and far less turnover in the shops, hotels, restaurants and other service businesses in our area.
A recession starts when a Central Bank puts up interest rates and signals less credit is to b e available. This one began with higher interest rates and money difficulties hitting the mortgage banks. House prices have now dropped by at least 12.5%, and new housebuilding has been severely affected. Car prices are now falling, house sales and purchases are well down and people are feeling the pinch in their daily budgets. It is going to be an uncomfortable few months ahead. Let us hope the government’s huge package for the banks will stabilise them as a beginning. Then we need all the power of the state to be directed to limiting the damage for all the other businesses that will be feeling the cold winds of winter.
John Redwood’s contribution to the Banking Bill debate
Mr. John Redwood (Wokingham) (Con): I welcome a Bill on this subject, and I am glad that my right hon. and hon. Friends on the Front Bench are in a collaborative spirit because this is a case where working together might improve the Bill, but it needs a lot of improvement because the main things that have gone wrong in the past 11 years stem from the grave weakening of the Bank of England that occurred in 1997.
I would like the Bill to go much further than the current draft in giving back to the Bank of England the powers that it had before 1997. I would like the Bill to make it clear that the Bank of England needs to see and understand all of the business in the money markets. The Bank needs to have powers and duties so that it is the prime driver of the money markets. I would like to see the Bank have those powers back so that it is a better judge of the amount of cash and liquidity that we need in the system at any given time, and so that it is more able to enforce its interest rates in the marketplace, which it has been unable to do during the recent, extraordinary breakdown of the markets.
Like my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) and others, I believe that this is not just a story of big banking error—although it is clearly such a story—but a story of massive regulatory failure. I would highlight three regulatory failures, in a different way from my hon. Friends so as not to bore Members or repeat things that have already been stated. The first failure is the regulatory failure of the Monetary Policy Committee of the Bank of England. In the early part of the decade, the committee kept interest rates far too low. It seemed unaware of the power of low interest rates to drive ever more credit, lending and borrowing in the system, and it ignored all the warning signs in the asset markets and the credit bubble that was emerging in the banking figures. Worse than that, the committee is now making exactly the same mistake in reverse. Now that there is a need to fight the problem of recession and deflation, the MPC is driving the car by looking in the rear-view mirror. It is shocked at how much inflation has got out of control, so it is keeping interest rates far too high for current conditions, and way out of line with those in the United States of America, for example.
David Taylor (North-West Leicestershire) (Lab/Co-op): The right hon. Gentleman talked about restoring powers to the Bank of England. Is he about to make the point that monetary policy decisions on interest rates should be taken away from it, almost as a quid pro quo? In the example that he gave of interest rates being set far too low in the early years of this Government, to which I infer he refers, surely the Bank was in pursuit of the target that it was given by the Chancellor of the Exchequer on inflation.
Mr. Redwood: It clearly was not because the target was to keep inflation to 2 per cent. Inflation is currently 5 per cent., so it is 150 per cent. over the target. I am afraid we have to judge that the MPC got it comprehensively
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wrong. I am not suggesting taking the ability away, or putting the matter back under ministerial control; I am making a plea for a much stronger Bank of England that sees all the market activity and Government debt, which was taken away from it and nationalised into the Treasury, and which sees all the day-to-day transactions of the banks because it is regulating them. It would then understand the money markets, and if bankers, alongside academic economists, were trying to produce a total package on how we intervene, how much money we supply and at what price we supply money, the institution would have a better chance of making those independent judgments in the interests of the whole economy. I do not think that anyone in this House can allege that the MPC has been a success because inflation stands at two and a half times the target, the money markets are in meltdown, and interest rates are now far too high for most borrowers. That increases the likelihood of default on loans and further undermines the asset base of the banking system, which is in a very fragile condition.
The second set of errors that were made by the regulators relate to money market liquidity. Perhaps things were too integrated on this occasion, but in the early part of the decade the Bank of England reinforced the message of the MPC by making large amounts of cash available—the markets were too liquid. More recently, the Bank started to withdraw liquidity and every time it did so in 2007, and even in 2008, it exposed more financial institutions to difficult pressures, which we have seen bubble up from time to time. The lesson has been learned there, and while I regard the MPC as still making the same old mistakes, the Bank is now doing exactly the right thing, with Government help, by making huge amounts of liquidity available. There have been statements that it intends to carry on doing so while the fragility continues, and I am pleased we have got to that point, but if we look at the record of the previous seven years, we see—because the Bank did not have the knowledge and powers it used to have—that it was too easy in the easy times and that it withdrew too much liquidity at times of stress and difficulty.
The third set of problems has arisen in the way that banking capital and banking caution have been regulated, as my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and my hon. Friend the Member for Stratford-on-Avon said. There is no doubt that, again, we had pro-cyclical regulation. In the easy money times, the regulator did not seem too worried about banking capital and the gearing. Indeed, we saw the gearing of institutions massively increase over the levels of the ’80s and ’90s. I am afraid that those Members who say that such problems date back to the ’80s do not understand the situation. The gearing in banks is far higher today than it was allowed to be under the system in the ’80s and ’90s.
Now we see, at this rather late stage, the regulatory pressures towards having more banking capital relative to the stock of debt, at exactly the point where the system is extremely fragile. I urge the Government to be careful not to go in for more pro-cyclical regulation, so that they do not increase the deflationary forces at exactly the wrong time, just as the regulatory system seemed to increase the inflationary forces during the days when money was far too easy.
I would like the Bank of England to be reconnected, by being the agent for Government debt, by being the
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supervisor of the banks, so that it sees all the money market transactions, and by being given more opportunity to manage not just the price but the quantity of money, so that we can have a smoother progression. We have lurched from boom to bust and from unacceptably high inflation to what I think will prove to be a lot of disinflation, as we see the impact of the credit implosion come through in prices.
When I was first invited into government, I was given the job of insurance regulator for the then Secretary of State for Trade and Industry. The two main duties of the insurance regulator, which was then a ministerial role, were to ensure that the insurance companies were solvent and to ensure that they were run by fit and proper people. That regime was rather similar to the kind of regime that applies in broad outline to banks and it was perfectly sensible. Coming from a financial background, I had a great fear that conditions would get tough in the early ’90s and that there could be a casualty or two in the list, so I asked for proper information from my regulatory team. It took me a little while to get it in the form that I wanted, but we had the powers to procure it.
Once I had on my desk the balance sheet and the profit-and-loss risk, as we saw it, of those institutions, I managed it. If I saw an institution that I thought might be short of cash or in some other difficulty in six months or a year, I would get on the phone to the chairman of that company privately and say, “I am your friendly regulator. I do not have a power to instruct you to raise money, but it seems to me that it would be very helpful if you did raise some money.” In each case the chairman was very obliging and said, “Actually, it’s a good idea,” or, “Yes, we’re going to do it.” In each case they raised money and those institutions got through what was a fairly unpleasant insurance downturn with no problem.
It is not that difficult for a regulator to do that, because they have access to the information, but it is most important to follow this fundamental principle: they must always act in private. They must never name the institution or seek any credit at the time, because we are talking about incredibly price-sensitive information. If any wind or whiff gets out of the office that the regulator has even a scintilla of doubt about an institution, there could be a run on it and a lot of negative journalism about it. The regulator’s task will then be 10 times greater, because the institution will be on the slippery slope downwards and it will be damaged.
I therefore urge the Government to ensure that there are no leaks or running commentary to us and the public as such difficult and sensitive discussions are under way. Those occasions are ones when it is best if things are done in private and as speedily as possible, and if we are told only when the decision has been made and the proper authorities can be notified.
Apart from greater powers for the Bank and whatever powers the regulator needs to regulate intelligently in the way that I have described, I would also like to see some kind of control in the Bill of the ability of the Government and the Bank to use the special powers of acquisition. I strongly believe that in practically every case, if not in every case, it should be possible to solve such problems with private sector solutions, such as
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through private sector fundraising or by cancelling the dividend, cutting costs, shedding some assets, having some disposals or ensuring that capital can be found from sources outside over a reasonable time period.
Those are some of the panoply of ways a business can try to get its capital ratios into shape and get the cash that it needs to continue its business. It should be in the interests of all well-meaning people in the House to keep those things in the private sector, to make businesses accept the disciplines of the private sector, to blame those in charge of them when they get it wrong and to ensure that the new management sort things out as quickly as possible.
However, my worry about the proposals before us is that the taxpayer is being asked to take on too much risk. The three banks to which public capital might be subscribed—I say “might” because a number of votes have to take place and there are still opportunities for private shareholders to come forward with money—have, in aggregate, balance sheets of almost £3 trillion. That is twice the country’s national income and around five times its annual tax revenue. If something went wrong and just 1 per cent. of those assets had to be written off, the owners of those banks would collectively lose £30 billion.
Thirty billion pounds is a very large sum of money, even for the British taxpayer. It is 5 per cent. of tax revenue in a single year. Are we sure that there could not be a 1 per cent. loss on the assets of those banks when they come into public ownership? I know that some of those assets are as risk free as one can get, and include Treasury bills and that sort of thing, but some of them are not. Some of them are the mortgages and the loans to companies that we have been worrying about. We are being asked to absorb those assets as we go into recession, when it will not be just the mortgage book that deteriorates in quality, but the loan book to companies, as I fear that we are about to enter a period when companies will find it difficult to keep going. In some cases they will find it difficult to earn a profit or generate cash and will look to their bankers for more support. In some cases, businesses will stumble and be incapable of keeping the payments going.
I would therefore like a reminder in the legislation, and perhaps a requirement to come back to the House in an emergency, that there must be some limit. Just as we are now preaching to the private sector that banks should not get over-geared and over-borrowed, should we not be preaching to ourselves that the Government and the public sector should not get too over-borrowed and over-extended? I hope that the Government will go away over the next two or three weeks, work with those banks that have given an indication that they might like public capital, go through the figures again and ask, “How can you get the demand down? How can you generate more cash for yourself? How can you get more private sector capital coming into your bank to cut the taxpayer risk?” Otherwise, the British state will be left in a weakened condition, which is not what we want at this juncture.
Another week-end – two more European banks in the news
The decision of the Dutch government to put more capital into ING is strange. A week ago when ING took on deposits from a failed Icelandic bank,and on October 17th in a press release, we were told that ING was in a strong financial position. Now we are told it will have extra taxpayers capital. The governments and Regulators have raised the bar over how much capital a bank should have, and are now having to pay up to meet their own higher hurdle to appease the markets. Meanwhile a French bank loses substantial sums in “unauthorised trades” so the three bosses of the bank resign. One wonders why the top people have to resign at a bank if employees broke the rules, but not at all the banks which got into financial difficulties by doing what the Directors asked or authorised.
It is good news that many in the political and media classes reckon we have now lived through the worst of the banking crisis and think it is now all on the mend. A return of confidence in banks is a necessary part of recovery for the rest of us. However, the authorities have to understand that you cannot have strong banks without a stronger economy. They need to do more to ease the recessionary forces, otherwise banks will face much larger losses right across their portfolio of loans. The issue now is whether we can stave off a corporate loan problem to run alongside the sub prime mortgage problem being experienced on both sides of the Atlantic.
It is also worrying that the main property specialists, who were very complacent going into the housing downturn, forecasting a very shallow decline in prices, are all now telling us to expect another year of substantial falls in UK house prices. If they are right this time round that means more grief on the mrotgage books for the banks, as well as many individual tragedies as the nation plunges more into negative equity.
Colin Powell helps Obama – Why?
Early on in Obama’s campaign for the nomination I drew attention to the excellent speeches and the new model of fund raising he was using. I praised both on this site and raised a few eyebrows. I said I thought they were going to be successful.
I went on to say I did not like Obama’s policies, to the extent that he then had any, and doubted they would measure up to the challenges ahead. People ignored that part of the comment. I now feel the same about McCain’s.
Now we have seen most of what both candidates are offering, the thing which comes across is how conventional in their thinking both these “Change” candidates are. They both want to commit more forces to the war in Afghanistan. They both have plans to increase spending and cut taxes at a time of high government budget deficit. They both agree with the Paulson/Bush plan for tackling the banking crisis. Neither have come up with anything new on how to fight recession. Neither have radical plans to slim central governemnt down and make it more responsive to electors.
It is strange that Colin Powell throws his weight behind Obama, offering us just slogans as reasons. He tells us we need change, and we need a new generation to take charge. It is time that he and other heavyweight backers started spelling out what change we need ,and how Obama is going to deliver it. It is obvious we need change, obvious the Bush policies of military intervention and economic management have run their course. The issue is how quickly can you change them, and how funadamentally, to put the West back on the road to freedom and prosperity.