The Bewilderness

People's Pledge

Camerons done so many U-turns. What is one more giving us a referendum over the vote for prisoners? Make it in-out...UK out EU in

The Old Lady inflates her title

The Bank of England has successfully resisted external scrutiny on its role in the financial crisis. Tory actions to erase Brown's legacy, combined with personable relations between the party's leaders and the Old Lady's executive suite, has led to excessive powers with little transparency or accountability. Such a paramount financial power has excited Parliament.

The Bank of England is culpable of debasing the currency, undermining thrift and engaging in 'not so stealth inflation'. Its managers have constantly underestimated the rate of inflation and, with the connivance of Treasury, ignored its hard won statutory duty to maintain that level. Such a policy suite, alongside QE, has contributed to stagnation and easing the pain of public sector cuts.  

Now, pushed by the House of Commons, the Court of the Bank of England has announced an inquiry into the role of the Bank from 2008. Such a move may meet some of the short tail criticisms but, if this institution is unable to maintain a hawkish stance on monetary matters, it should return its powers to politicians. Better that Osborne takes decisions, blatantly Tory-led, than have a figleaf of authority from the inflationistas of Threadneedle Street, whose hapless intervention has extended our decline.

Philip Stephens of the Financial Times is one of the misguided Europhiles on the pink organ. Quite the chronicler of Tory failure, his tome from the nineties: "Politics and the Pound", is a timely reminder, if read today, of the mistakes and misguidance that has afflicted this country. The concluding remarks in his book sum up the erroneous assumptions underlying Europhilia and the ideological compass that underpins their reasoning:

Sterling is a useful indicator and an instrument of economic management but the currency markets can be as destructive as they are powerful. For now there seems only the slightest prospect that Britain will join EMU in 1999. A re-elected Conservative government would not survive such a decision. Tony Blair would almost certainly have more pressing priorities. But if the rest of Europe does create a single currency, sterling's future will look bleak. Once again Britain is likely to follow Monnet's advice.  It will watch from the sidelines to see if the venture works and, if it does, will join. Until then politics and the pound are destined to remain dangerously entangled.

The emphasis is upon British reticence, hesitation and cowardice, not upon the pros and cons of a currency union. When your magnetic north is inverted to Brussels, your reasoning does not look ahead but back, from out of your arse. The 'guilty men', who supported this disastrous venture have found any number of excuses for not amending their opinions.

This does not prevent our pygmies from another failure at the G7 (no Putin, so no G8). Strong leadership would demand the orderly dismantling of the currency union into convergent groups. Instead, isolating Angela Merkel, the Anglo-Saxons called for further integration, the mutualisation of debt and the monetary debasement of the Euro. The only response they can give is their own pisspoor stealth inflation and austerity spin. (The UK government is not on the austerity treadmill).

Why should the Germans pay for the debts of others? Their political elite may subscribe to a 'European Germany' and wish to avoid causing the gimps who gave all of their deposits in bad loans from facing the consequences of their actions. The German government have tried to stop bailing out their own banks. Merkel may have forced this poison on Ireland, Portugal, Greece, Spain and the periphery. Now that poison is being thrust upon her.

From Grexnix to Grexit

In 2000AD lore, a grexnix is a churlish person or an ignoramus. It is not clear if they are lower or higher on the list than nonscrots (redefined as nonscrotes, if drunk): nonreaders of 2000AD. For our purposes, the European political classes, as individuals, can be insulted as grexnixes. Why? Because, through their political decisions, they have ruined the lives of Greek nonscrots and forced them into an inevitable Grexit from the Euro. Their status as Grexnix leads inevitably to Grexit.

The backwash from this event is incalculable. Not in the exaggerated drama of overwhelming damage but a practical observation concerning the vast number of overlapping and contradictory warnings handed out about the Eurozone. Believe the best and prepare for the worst?

A Greek exit will cause economic damage. It will destroy confidence in the currency union and a deep recession in the UK. The greater the contagion and subsequent disruption, the more that we should fear the consequences on these islands.

One can muse at the irony. Greece was a latecomer to the welfare state and, like its peers, used debt to fuel its payments. Now, the crisis of late social democracy has been accelerated by the Greater Depression and the downfall of sovereign debt. Welfare liabilities are no longer possible. It is not possible to discern the new forms of government as yet. We can only chart the downfall of the old. 

They did not even mention the FTT...

On Francois Hollande's first day as French President, his goal was to meet with Chancellor Angela Merkel, reaffirming the relationship between France and Germany underpinning the European Union and the Eurozone. One should emphasize relationship, rather than partnership. The latter is fruitful, the former can be abusive.

The two leaders met for talks and a dinner, holding a press conference on their discussions. It is clear that neither was willing to give ground, politely stating their differences. Hollande made the case for Eurobonds, a lender of last resort and renegotiation of the fiscal treaty. Merkel stood her ground on the figleaf of austerity, already clear that the liabilities will overwhelm Germany if the Eurozone falls.

On the day that economic news highlighted the widening divisions within the currency union, both leaders noted that they would agree to disagree. Their sole point of unity was a plea for Greece to remain within the Eurozone and a plea to provide further support; perhaps this formed the majority of their discussion. Growth and austerity become minor points in the maelstrom that would result if contagion flowed through the markets.

To sum up, the discussions confirmed that Hollande and Markel are now bystanders like the rest of us. They have no solutions and the future of their currency union resides in the Greek electorate. They didn't even mention the financial transactions tax (don't want to piss UK and US off?). 

It is now a matter of faith

Under the treaties governing the European Union, I am not aware of the clause that states "In a dire emergency, Germany may force a country out of the single currency area or out of the European Union". Such a clause does not exist. So why are the Christian Democrats in Germany pretending that one exists?  

This would be your impression if you read the Eurosceptic Torygraph headline: "Merkel tells Greece to back cuts or face euro exit". Except really, she did not. Just another example of lazy reporting. The German government can opine until it is blue in the face, but it is the decision of a Greek government (as long as one exists) whether to stay in the € or not.

The country is now moving towards a new political situation: new elections for an extremist government that rejects debt repayments, 'barbaric bail-outs' and austerity. Yet they wish to remain in the €: Margaret Thatcher's description of the single currency cloud-cuckoo land is alive and well in Greece.

But British and European politicians have failed yet again in truly understanding their situation. Their problems cannot be resolved by government action, although politicians can certainly make matters worse. Resolution will be achieved by the actions of people. When they lack confidence, a credit cruch follows. If this worsens, they lose faith in their economy, their currency, their banks. The signal is clear. When the Greeks lose faith, then the edifice will finally fall. It is in the hands of the people, or as we sometimes call them, the market.

The green gravy train

David Cameron tacked to the left when he was campaigning to win the general election of 2010. This included pandering to the environmentalist NGOs and the green movement. Cameron crooned to them with a husky voice and green slogans, betting that a wealthy country could bear the extra costs of bad policy based on uncertain science.

The Independent of Sunday rounds up the usual sources from the World Wildllife Fund, Greenpeace and other interested parties in the green lobby to 'assess' the government. It appears that the coialition have not fully signed up to their demands. This is a black mark!

None of the green movement considers the impact of their policies upon the economy or the poor. Their goal is to obtain subventions for their objectives, without debating the impact that such policies have upon low income families and economic growth. The green gravy train must keep running, whatever the cost.

Disarmed by their own critique

The Eurozone is in crisis. It is a crisis that will last several years, unless you are a blind decrepit Europhile. Stating the obvious should be commended in a politician, even it if it is Cameron. This description, seen in most British newspapers, has been condemned by Lords Ashdown and Oakeshott, with lurid images of diplomatic arson, sabotage and distraction. 

But the good Lords did not proffer their own description of events: a deflating balloon perhaps, a mere bagatelle, or sensible policies of unemployment and immiserisation, undermined by pesky democrats. Alas, they are silent.... 

Singularity Society

The Royal Society issued a report recently on overpopulation and resources. An unwelcome sequel to the Limits to Growth, the authors managed to confuse economics, ignore technology and subscribe to the anti-humanist authoritarianism of the green movement.

Every new mouth is a burden. Everny new mind is a curse. Extra people should be discouraged. And then we have the Singularity University:

"He [Peter Diamandis] talks about "three billion new minds coming online" in the next few years, Silicon Valley-speak for "being born". These minds are an opportunity, he insists, because "the rate of innovation is a function of the number of people actually communicating and this is growing explosively with the internet". 

Ironic that the article on the Singularity University appears in the Guardian. Not a newspaper renowned for its techno-progressivism. But progress is marching forward all the time: and it looks like the Greens are wrong every time. The tsunami of progress should overwhelm their Cnut like ways.

Perhaps the Singularity University could take over the Royal Society, since it appears to have taken on the role that the oldest scientific association has abandoned...

Left hand saved by the right hand in France

The financial crisis is spawning political surprises. The hard left did less well than expected in the first round of the French presidential campaign. The drift from communism to National Front was the clear winner, driving Marianne Le Pen to third place.

Unless Sarkozy can draw on the reservoir on far right voters (deemed very unlikely), Hollande and the Socialists will win the vote. The Left is saved by the Right. The Eurozone is tipping towards the Latins.