Thursday, 17 August 2017

Does Britain have a national interest?


The repeal of the Corn Laws in the 1840s and Irish home rule at the end of the nineteenth century are the only precedents for the kind of disruption threatened by  leaving the European Union. Both split parties, divided the nation and inflicted such deep damage on the Conservatives in 1846 and the Liberals in 1886 that they took decades to recover .

Like Brexit, both were arguments over interests; land versus industry in the corn laws, imperialism versus little Britain in Home Rule. But these great disruptions differed from today's in one key way. The arguments then were clear and basically about the national interest.Today's are nebulous, hypothetical and all about vested interests not the nation's.  Few today have any clear idea what Britain's national interest is.

The argument is unreal because the nature of the deal we may be offered  is  still not known.The EU's negotiating tactic is to make negotiations so protracted ,  and to impose so many hurdles that it deters anyone from leaving its happy band. It's all  a game of bluff and bluster, a phoney war in which Remainers parade terrifying fears like  David Miliband's claim that Brexit would be "an unparalleled act of self harm". Every vested interest trembles at the unparalleled horrors to come, and Brexiteers talk of opening up to the world  without explaining what that means. Neither side can justify its claims because it ain't over until the German lady sings.

Result? Maximum confusion,in which the national interest comes nowhere. That's always been a problem of our membership. The EU It began as a deal between Germany's manufacturing interest which needed wider markets and France's agricultural interest which demanded protection.

 We gave little consideration to our national interest because no one was sure what it was. We were told that the benefits would be primarily political, meaning it offered a new stage for Britain's elite to strut on .The economic arguments were said to be more evenly balanced, but were  sold as an opportunity to show our courage, determination and inherent greatness..

It was an astonishing degree of complacency backed by homely images which showed little understanding of industry.  Cold showers would stimulate our competitiveness. We would be hitching up to Europe's faster growth. Unfortunately the showers produced pneumonia, EU growth slowed and foreseeably (but not foreseen) it proved easier to penetrate our smaller market from the larger  than vice 
versa.

We were duly penetrated. The balance of trade with the single market became a huge and growing deficit and it became clear that we had assumed damaging obligations, the loss of our fishing grounds, the rupture of our trade with cheaper agricultural producers and a burden of payments far greater than our GDP per capita would justify, to join a club which offered us little. Except maintaining  peace in Europe which NATO was already doing

 Those at the top loved Europe and the EU and its puff pastry politics but the consequences hit the less well off, along with globalisation,austerity and stagnant incomes, so it was hardly surprising that the people left behind took advantage of David Cameron's over confident referendum to protest.

Which begins round two of the Great Debate, a phoney war which is even more of a clamour of  vested interests but should be about dosh.The cost of staying in the single market is a drain of approximately £90 billion a year with the trade deficit the membership fees and the CAP all of which we're now borrowing to pay. Yet there's no thought on whether an economy which cant pay its way in the world can continue to bear such a heavy Euro-Geld

 The costs of leaving are variously estimated by the EU at up to €100 billion.Is this worth paying and for what? Every interest claims that its own  is the national interest. They get away with it because Britain is the only advanced country  which has no idea of what its national interest is.

 What sort of economy do we want?  Free trade was in the interests of the world's first industrial economy but now of a society which consumes much but produces little. So what are the alternatives?Racing to the bottom with a cut price, low wage , low tax economy? A service economy driven by consumer demand and selling assets just to survive?  Or a high skill, high investment industrial competitor. Should we sustain the City or rebuild the industrial economy which is better balanced than lopsided dependence on finance?. Do we want free trade  or  insulation by a competitive exchange rate and state investment to build strength in the way our competitors  have?.Should we welcome or restrict foreign ownership, already greater in Britain than in any competitor?

Other nations make these decisions in the light of their national interest. Britain seems unable to understand what that interest is or what the pursuit of it entails. The EU's is clear given Britain's value as an easy market and a over generous contributor, but if Britain can't agree on what it's interest is, it's impossible to negotiate for it. 

This is not a rational discussion but a clamour of vested interests. Importers fight producers, the City fights industry, foreign owned businesses see things differently to British owned, consumers fight producers and employers argue with unions. So many battles that irreconciliable Remainers hope that it will all look so difficult that we'll give up and slink back into the EU. Yet they can't tell us on what terms, and experience with Greece indicates that the EU is not exactly designed to help lame dogs over styles.

It's a gloomy prospect. Not because withdrawal is wrong or right but because our elite, has no clear view of the national interest or how to pursue it. We'll probably muddle through getting the worst of all worlds, but in or out, the prospects for a weak economy unable to pay its way, can't be all that bright in a world  growing ever more competitive. Unless our leaders suddenly discover the national interest but I've got the dreadful feeling that they don't know.


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Thursday, 3 August 2017

Does custard curdle faster with Brexit?

TIME TO REVERSE THE ARGUMENT

The rampant remainers and their journal, the Guardian, are never going to be able to forgive the British people for voting for Brexit. They just can't accept that our electorate might want a strong British economy rather than being the poor adjunct of Greater Germany they've reduced us to.

Every day they bring us news of fresh disasters. Is crime rising ? Is the health service under strain? Is the economy slowing?Does custard curdle before it used to? All due to Brexit. With much worse to come.

The hidden agenda is of course to defeat Brexit by the back door. They hope that this endless diet of fears and problems will cause the electorate to learn sense, give up on its crazy whims, and agree to  crawl back into the safety and warmth of a benign European Union. Vince Cable has already made this explicit ,Vernon Bogdanor has added his more magisterial approval and Polly Toynbee wants the Labour Party to do the job for her. Doubtless it's what the rest of Yesterday's men, Blair, Mandy, Cameron, Clark and Ashdown, Dad's EU army, all think. They may have fallen a little silent of late but that's only because they're  waiting for their prophecies to turn into the real disaster they're hoping for, to teach the electorate a lesson. Then they can re-emerge as the nation's saviours and offer the EU they love as the solution.

One might have hoped that some sense of patriotism might have pushed them to do a little more to stop such a disaster, however mythical, rather than gloat at the prospect. Rather than attacking every move Britain makes, exagerating every difficulty and taking the EU side in negotiations which the EU has deliberately made as difficult as possible, they might have used whatever influence they have in their beloved EU to argue for a sensible deal and more realistic negotiations than Barnier's three stage waterboarding.

They do neither. Strange things happen when you love Europe more than your own country. Which makes it time to challenge this political archeology. Forget all their ghastly warnings. Recognise that negotiation is a game of bluff which won't be over for months. Switch the debate round by demanding that they tell us whether, and in what way, Britain could do as they want and go back into the Euro-swamp

First they need to tell us whether we can just give up and resume our place on the periphery. Or does invoking article fifty and then deciding we're too scared/stupid/weak to take the risk, require us to beg our way back as a new state, required to join Schengen and the Euro, give up our rebate, accept the refugees and accept all the centralising processes Macron wants to make the Euro work and accepting accept the same bum's rush the EU gave Cameron?

Second. If we can go back on the old basis, how are we going to stop the drain of money jobs and demand which is sucking Britain dry? Our trade in the single market is £60 billion in deficit, our membership fee is £ 11 billion and the CAP costs us perhaps £17 billion in higher food prices and we're now borrowing all of that to belong.

 So how do we stop the drain, rebalance trade more fairly and stop Germany accumulating huge surpluses which it then refuses to spend or redistribute. Do tell because as far as I can see the Single Market isn't a form of salvation  but a suction pump draining economic strength out of Britain.

Third how do we tell the British public that we can't do what they want and its all their fault for putting us in this mess in the first place?  The second hand German water cannon Boris has bought may be useful but we'll surely have to hope that Tony will use his influence with Macron to get several detachments of French CRS over here as a fraternal gesture from Europe. That'll teach the bastards

Saturday, 15 July 2017

Deutschland uber alles


It's no wonder that the EU has copied that other illegitimate regime, Ian Smith's Rhodesia, in stealing Beethoven's ninth as its national anthem. That magnificent music not only gives the EU a majesty it doesn't deserve but it disguises the true nature of the beast.The only anthem which truly expresses the reality of the EU is Deutschland Umber Alles. That might prove too frightening for the little chickens in the roost.

Economically the EU is dominated by a holy trinity of German interests.First there is the insistence on building up huge trading surpluses-currently the biggest in the world-which Germany refuses either to redistribute to help the poorer states or to spend to stimulate the economy.

Secondly there is the  German insistence on a competitive exchange rate to keep their economy exporting powerfully. Despite the pleas of the US and the UK they always kept the DMark down. Now the Euro does the job for them like a series of guy ropes in which the poorer economies keep the overall rate down. So markets aren't allowed to work and the German exchange rate can't rise to rebalance trade and make it fairer.

Finally there is the old fear of inflation which makes Germany insist that debts is sacred and must be repaid. Money loaned to Greece must be paid back in full even if its impossible, and any country owing money must squeeze, freeze no deflate to pay it back. See Yannis Varoufakis on that

The result is that Germany drains all the other members, requires them to deflate and prospers at the expense of the block.The EU won't work unless German dominance is ended and Brexit is a side issue which distracts attention from that.Britain can plan for escape, Macron can preach a common economic policy, a common budget and a common finance minister but nothing can happen unless the Germans agree it. If it infringes their holy trinity, they won't.

Result deadlock.Everything waits, not for Godot, but for Merkel and Schaubel. But one thing is sure. They're much more aware of their national interest and much more determined to defend it than Britain's vested interests who want to continue the drain of the single market, or our rampant remainers who have no higher ambition than  to drag Britain back, pathetic and humiliated into the new German empire.

Monday, 10 July 2017

WHAT HAPPENED TO THE MUDDY MIDDLE?

WHAT HAPPENED TO THE MUDDY MIDDLE?

I'm happy to join the universal confessions of failure from the psephologists pollsters and pundittieri over the election. We all got it wrong. We assumed that Jeremy's past would drag him down, Labour's radical manifesto would be a repeat of the longest suicide note of 1983 and a nervous electorate would want to cling to nurse.All wrong. Mea very culpa 

The problem is why. Electoral analysis used to focus on  getting out the vote. Marc Abrams in 1959 and Butler Stokes in the sixties described two great tribes, membership determined by hereditary and conditioning, which grew or declined with demographics. Parties won or lost by getting the vote out

 This analysis was  replaced as party allegiances weakened in the seventies by the centre ground theory. The argument here was that parties had to moderate their ideologues to win the centre ground where, it was claimed most electors lived. Strong policies would frighten the middle ground so parties had to soften their approach, blandise their appeal and avoid frightening people 

In my view the centre ground was a kind of mushy, middle, the home of floating voters and people less interested in politics, more apathetic, less likely to vote, and less involved . This was a tribe with no strong party commitment whose confused perceptions could be  easily influenced by moods, fears and media

Blairites had a different view of the middle ground. They saw it as marginal territory between the parties where people could be mobilised by fear, altruism and hope . In the Blairite view Labour's task was to blandise its appeal , moderate its policies, soften its ideology and reach out from its core vote to win votes in the south and among the more liberal middle classes.

Different perceptions  pointing to similar conclusions, specifically that Labour should take its core support for granted, forget terrifying things like socialism and nationalisation, avoid frightening people, disassociate from the unions and present itself as a party of government, hope and goodwill to win the centre ground .In a conservative country with a malign media, respectability and the avoidance of fear were the way to do that. Keep Prescott and Skinner in a cage. Smile, wave and win

It worked for Blair. Labour won but then threw it all away because having moderated itself out of everything it had little idea of what to do next. It lost ground in its core areas like Scotland which it had taken for granted but to which it delivered too little to keep them happy.

 In the light of all this thinking Corbyn's defeat seemed certain.We were clearly wrong. Yet that doesn't tell us why. Could it be that a techtonic shift is taking place?. Is the middle ground  moving.?

 The people  have  been subjected to three decades of neoliberalism, cuts, underinvestment and frozen living standards.They're beginning to realise that though the rich have benefitted generously, austerity has neither improved their own position nor given them stable employment and better prospects The fat cats prosper The people stagnate .

In the face of all this its hardly surprising if the middle grounders have become a little fed up, living in a country that's going nowhere with a standard of living that's static, employment uncertain and debt accumulating. As a result their apathy is fading, their fears subsiding

As  fear looses its grip, radical policies begin to look more acceptable and Labour looks less frightening. However desperately the media and the Tory Party invoke the old bogey person images , warn of tax bombshells, or bang on about the absence of money trees, the middle ground is opening up for change..

This can  be a new beginning in which we can have a serious discussion and develop serious policies to  deal with Britain's real and pressing problems. Instead of pretending all's well,  playing Mr and Mrs Nice and pretending that we can make things better by doing not very much we  might be able to  recognise that Britain is in a mess and offer serious, even socialist policies for getting out of it

EIN VOLK ,EIN REICH, EIN SINGLE MARKET


Labour did so well against all predictions (including mine) in the elections that it brings the prospect of power. After a long period of punishment, cuts, debt and frozen living standards, the electorate are becoming prepared to accept radical reforms. The middle ground has shifted our way and it's less easy for the media to scare folk off Labour by creating fears about unions, risky finances, state tyranny, rampant Marxism or Corbyn's BO.

With Labour's prospects improving in this way the worst thing the party can now do is fall apart in our usual fashion this time by opening up the old war over Brexit.Yet that's what Euro twerps like Umuna and the Chuckers, Chris and the Leslies and Gapes and the Gobbers want to do by their efforts to tie Labour to the single market. No deal without staying in the single market is their way of stopping any deal at all.

 Staying in the single market isn't leaving the EU.It's allowing it to continue to drain Britain. The electorate who voted to leave won't like it but BMW dealers, importers , French wine drinkers, the vested interests and all Britain's scaredy cat capitalists too frightened to compete in the world, can rejoice.Their fat livings are guaranteed. Eddie the Eagle economics of a country never quite making it will continue.

The Single Market is the Remainers' fig leaf . Its also worn by the CBI and the Engineering Employers whose directors put their love of the EU above the interests of their members. The Single Market is their way of leaving the EU while staying in it but so difficult to get and so restrictive if we do get it that the hope is that making it central will compel us to give up on Brexit and crawl back to Nurse.

Its benefits are largely mythical. Our trade deficit in it is around £60 billion a year. That's a drain of jobs, companies and growth out of Britain. We pay £11 billion. year to belong, which is a drain of dosh. It requires us to support agricultural protectionism and stops us buying food on cheaper markets, another cost of perhaps £20 billion in higher food prices.It allows British companies to pay their taxes in Luxembourg or Dublin to escape their tax obligations here. It requires us to contribute to adhesion funding for newer EU members, so companies like Nestle can be bribed to transfer jobs to Poland.

In short its a great deal for the EU but a bum one for Britain. The great beneficiary is Germany which accumulates the world's biggest surpluses which it will neither distribute to help others, nor spend to stimulate growth and help Greece Portugal or Italy .Germany drains the EU. Our problem is to stop it draining us Yet the Remainers who demand we keep it have no proposals to rebalance a single market that's not working for Britain.

Monday, 26 June 2017

Thundering herd tramples Theresa

These days we don't reach considered decisions after serious discussion. We thunder in herds, first in new direction then back in another.That's how bankers speculate, politicians think and pundits come to conclusions. Modernisation doesn't moderate it. It only means that the herds are getting bigger, the thundering louder and the changes of direction bigger.

Now it's Theresa May's turn to be trampled. A few weeks back the herd were busy trampling Cameron and praising Theresa as the savior of the Just Managing Folk and the  great equalizer.Now they've suddenly discovered that she's weak and wilting,about to be replaced, deeply unpopular and  incapable of carrying on. The herd even ruminates on the collapse of the government and an early election.

It's all bull. Don't believe a word of it. In their excitement the pundittieri have forgotten the basic facts they should have known about British government.
 It's an elective dictatorship. The party with a majority controls the House of Commons and can do anything it wants. It can skate on thin ice and continue to skate even after the ice has melted as Jim Callaghan did in 1978.

If the majority is small or there's a hung Parliament, the government still has to govern. So  its perfectly legitimate to come to deals either for coalition, as David Cameron did in 2010, or to agreements for support in motions of supply and confidence as the Lib/Lab pact did in 1976.

To say otherwise is to say that some seats are inferior to others. We are a union. Ulster MPs are as legitimate as Welsh or Cornish. So its hardly reasonable to argue that MPs shouldn't use their power to win a better deal for their constituents. In fact  all do.The Scot Nats could do a deal if they want to, and the Sein Fein MPs who moan about the deal are simply admitting how daft they are in taking their pay but not their seats. No presence no power

In fact I'm surprised how little the Democratic Unionists have asked. They could have changed history had they supported Jim Callaghan's government in March 1979. Then they demanded a gas pipeline to Northern Ireland to give them cheaper power but Jim was too noble to do deals. He lost power by one vote. Now they've only demanded a few billion when they could have asked for Orange parades, more Parliamentary seats for Northern Ireland, the remaking of every road and pies for every Protestant.

So my prediction is that Theresa can carry on and still do pretty well what she wants. The danger isn't now but two years ahead if she doesn't get a good deal on Brexit and has to crawl back or climb down. Both parties are divided on this. There'll be endless rows about what to do and who's to blame and we'll be in a real mess. But then the answer isn't another election. It's proportional representation, the only way out when parties and the nation are  fragmented.The major parties have resisted it for years but if neither can govern its the only way to form a government. Then every MP will have the power to demand their own deal in return for their vote.

It's the mood we're in which influences reactions to Brexit

Britain's decision making process is decided by mood rather than any assessment of the national interest. We joined the EU in a mood of despair about our prospects. We voted to come out because of a mood of dissatisfaction about the results. Now Remainers see  hope in the  uncertainty produced by the election result In fact the election was  about austerity and had little to do with Brexit, but it weakened Theresa May.The Unrepentant Remainers are now seizing that as a new point of attack, encouraged by a surge of optimism within the EU caused by economic recovery coupled with Macronmania. 

Their first demand that we vote again hasn't worked, so Remainers have decided to play a longer game by using both developments to persuade Britain that Brexit is so impossibly  difficult with  our government  weak so and the EU so strong, that we'll have to crawl back in despair and dejection or face decline, isolation and possibly eternal damnation.
   
That's the Counter Revolution. The  demand to stay in the single market is its key weapon.It shackles us to high immigration, excessive payments, agricultural protectionism and a constant drain of tax revenues to  tax fiddles in Dublin and Luxembourg. It prevents us helping industries and running effective industrial and regional policies but it provides a nice hidy- hole to our flagging industry which is too timorous  to compete on a world scale .

Remaining in the Single Market is much the same as staying in the EU but  will be impossible to achieve unless the EU agrees to change the rules. Which it won't. Which makes it the perfect weapon. We can beat our heads against a brick wall for two years then be forced to give up in despair and crawl back to the EU's less than loving embrace to sit on a naughty step somewhere on the periphery.

I can see why Britain's vested interests and Euro pensioners want to stay in.But the Single Market's vaunted benefits are pretty thin. Our trade deficit with it runs at £50 billion .The other costs of being in, its membership fees and the costs of the CAP, are a further £ 20 or so billion. That's a massive drain on our economy, though Remainers have no proposals for improving our performance  and industry doesn't understand that with a competitive currency we can easily overleap a common external tariff  averaging around 3% .The only real gainers are in the City of London. 

The second set of myths, that the EU is  en marche with inconvenient populists and Theresa May back in their kennels and growth reviving  is equally vacuous. The EU is built on mirages and constantly needs new myths to keep members happy but this new one will be less than the last, on the birth of the Euro.  EU tails are up, Theresa's is down and that gives them the incentive to be even tougher. Nice words about how they love us, but nasty consequences if we go. 

The EU is certainly doing better  thanks to the ephemeral effects of the Euro Bank's massive money printing. Yet the hopes triggered by New Macron,New Europe can only be realised by further centralisation to make the Euro work. This is unlikely. The Euro is structured to benefit Germany and force austerity on the weaker economies. Germany won't  rush to give up that. Nor will it redistribute its huge trade surpluses draining  the weaker members. And us.

The new optimism doesn't help Greece or Italy and any improvement will be confined to strengthening the Euro zone which won't benefit  Britain. So if we stay we'll be even more peripheral, with no chance of returning to  the vaunted position of influence Remainers promise.The EU is ever ready to help new members and finance the transfer of British jobs to Poland ,at our expense, but offers nothing to failed prodigals slinking back because they've lost confidence in themselves.