Month: February 2010

Governments think it’s time to blame the speculators again. You may remember the speculators and share shorters who dared to sell bank shares during the monetary and regulatory collapse of 2008. They were the cause of that crisis according to some official sources. Governments recommended at the time stopping people selling bank shares short, as if that were going to resolve the collapse of banks, brought low by bad banking and by excessively easy credit and banking regulation.

Today Greek and Spanish officials are briefing that bond speculators are bringing down their government debt for no good reason. Apparently investors and markets should go on lending as much as these worthy Ministers and officials want to borrow, so their salaries can be paid regardless of the financial plight of their countries.

Socialist morality is difficult to grasp. Apparently poor Chinese, who live on incomes far below those of Greek or Spanish officials, should have to lend to Greece and Spain so those same officials can carry on enjoying their high salaries. Those officials will then buy Chinese goods at cheap prices with the Chinese money their state has borrowed, so the Chinese can carry on working in the fridge or tv factory. The Chinese workers may not themselves be able to afford the tvs and fridges which they make, but collectively they should lend rich countries the money so westerners can.

These officials should stop wallowing in self pity and self justification. Countries like Greece, Spain and the UK have been borrowing too much. The Chinese and others do not have to go on lending to them. It is time for them to sober up and get a grip on their excessive deficits. Speculators helped save the UK from the political madness of the Exchange Rate Mechanism, forced upon us by all three main political parties. Speculators may well speed up the obvious necessity to limit debt. If they do so future generations should be grateful. Allowing these present governments to carry on borrowing is as kind as allowing the alcoholic with a weak liver to carry on drinking alcohol.

PS: There is a bit a fight back going in the EU against the idea of Greek bail out. Axel Weber of the ECB has said of the Greek plan to slash the deficit ” Now actions have to follow words”. Official German governemnt spokesman Urich Wilhelm has put out on Reuters a rejection of “unfounded reports citing coalition sources saying a decision for aid for Greece has in effect been made”
The UK government should make it clear as a non Euro member we certainly won’t be signing a cheque for Greece with all the money we have borrowed and printed.

As David Cameron said, after 13 years in government and just a couple of months before a General Election, the Prime Minister has been miraculously converted to changing the voting system. All those doubts and disagreements with such changes which he used to harbour and deploy under Mr Blair have been overcome.

The AV system is inherently unfair. If you vote for one of the two most popular parties you only get to vote once. If you vote for a party that cannot win you effectively vote twice, as your second preference then helps decide which of the front runners has won. Why is this fair?

If I go to a horse or car race, I expect the car or horse that comes first to be the winner. I do not expect the judges to say that as the first and second were close they will ask the losers who they would like to win. Nor do we say that as it was close the first and second place have to run it again without the others to see if one is faster without the others getting in the way.

Don’t meddle with a tried and tested system which we can all understand. Conservatives didn’t complain about the voting system for all those years when it made our fairly poor voting performance even worse in terms of seats. That’s just being a bad loser.

It’s wonderful to hear from the forecasters that after the fabulous BBQ summer and the mild winter we are now hurtling towards the early spring. It’s just a pity that could be on our snow sledge in near freezing temperatures! The forecasters seem to specialise in winding us up these days.

However, as readers of this site will know, this is just weather, not climate. The problem is we seem to get a lot of weather these days, with two snowfilled winters in succession and a cold wet summer in between. There’s no sign of any of my daffodils appearing from the soil as they clearly could not hear the message about early spring for all the snow there’s been on top of them.

Alister Heath of City AM has produced some more good topical figures to show that lower tax rates bring more jobs and more wealth and income to tax.

Apparently those states in the US like Texas and Florida which levy no additional state Income Tax on top of federal taxes have seen 89% more jobs created and 32% faster personal income growth than states with high state and local income taxes. As soon as one state introduces higher rate tax on the successful, they hop over the border into a low tax state, reducing the revenues of the high rate state instead of increasing them.

It adds to the case I set out before, based in the UK’s past history of lower and higher income tax rates, and based on international comparisons.

Today the pound opened lower again on the exchanges against the dollar. That means dearer petrol, dearer commodities, dearer imports from dollar related parts of the world including China. We are poorer as a result.

The MPC is like the drunk trying to walk along the pavement. They spend some of their time in the ditch of recession and falling prices because they underdo the money growth, and some of their time in the middle of the fast road, because they overdo the money growth and inflation.

Months ago I started warning they were overdoing the easy policy which was bound to lead to a lower pound and higher prices. That is exactly what is now happening. The Governor has to get ready to write another letter of apology. Why can’t they find people who can get it right?

There are three strong camps in the debate over whether John Terry had to resign as England’s soccer captain.

The footballing pragmatists say it should be settled solely on how well he is doing the job. His private life, they say, is no concern of the team or of England. If the Manager backed him the media would have to back off and he could continue. Many of them detect no sudden loss of form or authority on the pitch that worries them. They want a captain who plays football brilliantly. They do not expect him to be a saint or even a great role model off the field.

The media realists agree that you cannot prevent a man being England’s captain just for errors in his non footballing life. There are , apparently, few top flight footballers without something in their private lives that might cause concern or give opportunity for the media to criticise. They take the view that if a player can get away with it, so be it. If, however, a recent scandal leads to an overwhelming weight of media criticism and attention then they feel reluctantly the man has to go. You might call it Labour’s 3 day test. If something bad is leading the news three days running then action has to be taken to remove the source of the concern. It is a “distraction” from the main job.

The third group take a more traditional moral stance. They say that if someone aspires to lead in various walks of life, including in the high profile area of international team sports, they need to show discipline in their private lives as well. They do want great footballers or golfers or rugby stars to be people the young can look up to. They do not want them on charges for assault, or guilty of alcohol excess, or cheating their wives, or some other anti social conduct.

I invite my bloggers to send in their thoughts on where we should be in modern Britain. Should a clergyman lead by example and always behave honestly and decently? What should we expect of our political leaders? Should they be expected to live up to the moral standards expected of a Bishop? Should a sporting leader be required to behave better or allowed to behave worse than a government Minsiter? Is a business leader allowed to be unfaithful to his wife or to behave badly in a pub or club where a footballer or a politician is not? Is a business leader of a well known public company rightly more at risk for misconduct than one who leads a lower profile business?

Are there any absolute standards that all must meet? Are there graded standards that people with differing degrees of power and responsbility need to adhere to? Or is it now the case that the media is the judge, and all hinges on how long a story runs and how intense it is? Do the press in this case speak for the nation, and have they judged it right that people wanted Mr Terry to resign?

The word on the street is that a new Parliament will purge the old and give the country a new start with its democracy. Parliament can put behind it the mistakes, errors and frustrations of the past five years and suddenly become the Parliament people need and may even want. It will not be that simple.

If the new Parliament is to be better than the old, and if the new people are to make a difference, we need collectively to will and require a change in the way we do politics. Parliament should be there to test, to probe, to challenge the government as well as there to pass government legislation. The present Parliament talks about the need to scrutinise the executive – hardly language to send the pulses racing or to get Parliament back in touch with the people it is meant to represent. What we need is a Parliament which keeps Ministers up to the mark, which asks the right questions and refuses to take “No” for an answer, and a Parliament which is reluctant to legislate, forcing Ministers to work hard and to perfect their plans before they see the legislative light of day.

The Opposition is talking of reforms that could help. Stronger streamlined Select Committees where a few MPs learn their briefs and ask expert points would help. Giving Parliament more of a say in what is debated and what is questioned is important. If the government always controls the timetable and decides the subjects – apart from the odd Opposition day – it gives them power to conceal and power to spin the nation’s story as they wish.

We need more time to question and debate. If Parliament wants to carry on with half term holidays as if we were a primary school, maybe we could have those weeks for cross examining and discussing matters with Ministers without new laws or votes for those of us who would like to do the job better. We need to have enough time for each new bill. Prior to 1997 the Opposition was allowed as much time as it wanted to debate a bill in committee. Only if the Opposition started to abuse that trust by spending say 50 hours on Clause 1 did a government impose a timetable motion to limit the debate. Automatic timetable motions have crushed sensible resistance to badly thought through legislation, and have flattered uncontentious legislation with more time than it needed.

There is also the unhealthy relationship between spin doctors, leaderships and the media. Power is thought to be the power to control the message. In practice the controlled messages usually frustrate or infuriate as well as inform and make easy the lives of the journalists. The media say they want MPs to be more independently minded. Yet when one is, he is often pilloried for daring to disagree with his leadership, so the press can have great fun with a party row story. If we want more grown up politics, leaderships have to be relaxed enough to accept that not everyone all the time in their party has the same view. The media have to allow parties to have internal disagreements to shape the line or change the approach, without pretending that such a phenomenon is unusual or a crisis

A healthy democracy needs debate between and within parties. It needs a media that allows well intentioned and sensible people to disagree without it always being a challenge to the leadership or a demand for a different job. There are ideas as well as personalities in politics. If Parliament is to rebuild itself it not only has to find a way to claim the bus fare without a problem, but it needs to do its main job better. Its main job is to lead the national debate, to influence and guide government, to frame and develop wise but limited laws and to ensure that if government is spending too much, abusing power, or taking us in the wrong direction we at least know there is an alternative.