The Bewilderness

Scottish independence: a single issue country?

I dislike the acronym that could come into play if Scotland voted for independence; this, more than any other element of the charade, disturbs me. I do not wish to live in the Former UK.

When one hears Salmond and the Scottish National Party intone on these matters, there is a hint of complacency. They took a literal view of the Scottish electorate. If you are voting for a Scottish Nationalist party, then you are voting for a positive vote in the forthcoming referendum. The party could not shake its single issue mentality: focusing on independence at a time of economic upheaval and forfeiting trust in their governance. (An example of their complacency is lowering the voting age to 16 in the belief that teenagers are more inclined to support independence. An assumption not borne out by the polls). Parallels with the Tory focus on Europe at a distraction to the greater worries of the economy or health have surely preyed on the mind of the Scottish voter.

The SNP has difficulties in explaining why the risk of independence is worth taking. Instead of governance, questions now focus on how matters will be undertaken in a separate country. The Scottish administration states that everything will be fine and assumes that the rest of the UK will sign for their package withoutr preconditions. Hmmm....Fears of change are becoming entangled with everyday questions of performance. The Scottish voter: Why should we vote for you if you can't solve skoolzanhospitals because you are too busy dreaming of a future with more capability to boss us around

Can they square this circle? 

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?). 

Balls in the air for Scotland

The Liberal Democrats have attacked Alex Salmond in a speech from Danny Alexander, Chief Secretary to the Treasury, to the august corpocracy, the Scottish CBI. He opined on the level of debt that Scotland could expect (only £65 billion) and that the country would not benefit from independence. But England would, heh!

This is part of the 'mutual respect agenda'. Still, his illiteracy is countered by the SNP's who, in grand Brownstanding, calls for more government expenditure as a Plan B stimulus. Is Samond modelling Balls?

Obviously not enough social workers or diversity officers

For years, they turned a blind eye to the development of gang mentalities in London. Ineffectual efforts to ameliorate gang difficulties were undermined by a criminal justice system that released criminals and penalised victims. No doubt any of the looters picked up will bleat their 'rights'. Armed with a redistributionist concept of retail, most will live off some form of state benefit or illicit activity.

A softly-softly approach was adopted yesterday, trading public safety for some insane theory that this would blow itself out. A complete and unmitigated disaster. When others saw that such actions were treated with impunity, it was a wildfire incentive. Now riots are leaping across the capital.

These riots are the outcome of a progressive consensus: a state that has inverted the value of work and fetishized consumption at the expense of others. These looters are the effect of a welfare state: exercising entitlements by breaking windows and seizing goods. Grab the playstation for deferred gratification and burn the shop to the ground, with no regard for life or limb, even their own.

You put riots down, like savage dogs. You take out the ringleaders. You ensure zero tolerance for all involved. Time to bring out the water cannon and the plastic bullets. Make sure short-term pain is high and long-term gain is non-existent. And how will our 'vote blue/red/yellow, get shit' politicians respond? Hand-wringing, check. Ample rhetoric of concern and cut holidays short, check. Increase number of social workers: coming down the line.

Coming to the crossroads

What will be the price of a further bail-out for Ireland? The end of their autonomy and tax crucifixion. Today, we have heard a number of voices from the European Union opine that Ireland will have to become a "normal" tax country if it wants further monies from other members of Euroland.

The eurozone has become a trap for peripheral countries. They are crushed by debt, unable to compete against the core, saddled with austerity and facing long-term stagnation.

The external view divides Euroland between the core and the periphery. Current policies will not allow the periphery to compensate for it slack of competitiveness and the result is a debt deflation trap. Ireland is clear evidence of this.

Enter the insidious powers who will use the crisis to further particular goals. The Commission and the core countries have promoted tax harmonisation and minimal rates to neuter fiscal competition. Ireland may find that it has to drink a poisoned chalice: sacrifice the competitive elements required to crawl out of its hole in return for remedial action on its finances.

The European Commissioner for Economic and Monetary Affairs, Olli Rehn, has said that 'it is a fact of life' that Ireland will no longer be a low tax economy over the next ten years 'after what has happen

But he 'didn't rule out any option' since we know that 'Ireland in the coming decade will not be a low tax country, but it will rather become a normal tax country in the European context.'

Given the exposure of British banks to Irish debt and the damaging roll-over fo a liberal ally, should we not entertain the possibility of drawing the Republic back into the sterling area, or recommend dollarisation. Both options appear to be more palatable than the political crucifixion embarked upon by the Eurofanatics in power, who prefer the impoverishment of their people to losing face on a shared currency. The madness of Europe persists, extends and deepens.

Labou's client state commences its death rattle

What should we call this sovereign debt crisis? There does not appear to be one overall name that we can apply to the phenomenon. Even in the year after the downturn, the consensus is revolving around the Great Recession. Markets are still not reacting with confidence to the Special Purpose Vehicle designed to issue debt shoring up the PIGS. It will allay the crisis and delay the reckoning.

Of concern is the lack of decoupling between Britain and the Eurozone. Despite Cameron's scaremongering speech yesterday, Fitch has greeted the latest well-trawled measures with some scepticism.

The FTSE 100 also closed down 0.8pc at 5028.15 as the uncertainty in Europe continued, and after Fitch, the ratings agency, issued a veiled warning that the Coalition Government would have to do more than was currently implied to reduce the deficit, or put Britain's AAA credit rating at renewed risk.

Within hours, the Chancellor announced that he was running his sliderule over benefits, tax credits and public sector pensions, as Labour's client state commences its death rattle.

A respite in the Frankfurt salient

I suppose this is what you call a respite. Even though markets fell and the € remained below the significant $1.20, the Eurozone was committed to its hairshirt, a puritanical straitjacket of catastrophic proportions. Whilst I argued for reform of their welfarism for many years, they wish to self-destruct their Ponzi schemes as quickly as possible for small pieces of paper. This is Hitchhiker's Guide madness.

European finance ministers attempted to calm nerves by finalising details of a safety net for the eurozone and moving to tighten up budget discipline. Ministers from the 16 nations that share the single currency were due to agree arrangements to allow a Special Purpose Vehicle to raise up to €440bn (£363bn) to lend to eurozone nations that run into Greek-style problems, officials said.

They were also due to discuss ways of avoiding another Greek debt crisis by tightening surveillance of national budgets and introducing earlier and tougher sanctions against countries that breach EU deficit limits or misrepresent their statistics.

Call in the IMF now

I watched the Chancellors debate with some unease; the unease that one always feels when the statists get round a table. Why am I not surprised that they did more to agree than disagree? When George Osborne robbed New Labour of its rhetoric, clothing himself in the guise of the "many" rather than the "few", I knew that the cycle of crossdressng was complete.

A faint echo of fiduciary duty is not the same as a debate about liberty and the size of government. The ideological roots of popular capitalism had been replaced by token managerialism. And was the populist Vince Cable, his stance redolent of the shallow roots within the Liberal Democrats, channel MacMillan in his reference to the "family silver"?

On reflection, he annoyed me most of all. For he was the most reactionary, perhaps due to his age, harking back to some golden era of Butskellite consensus: the last time we got into this farce.

But we sat three statists who have to cut the state back. A crisis seems inevitable.