PoliticsConsidered

Changing the Voting System

2011-04-18T09:07:00.000Z

Changing FPTP to AV

A Briefing on the AV Referendum 5th May 2011.

Professor Bill Jones, University of Liverpool Hope

‘The time for change is when it can be no longer resisted’? Duke Cambridge

Why has the Referendum been called?
The vote originates with the agreement to form the Coalition government in May 2010 in the wake of an election which denied any party an overall majority. Labour had already floated the idea of a referendum on the Alternative Vote as bait for Lib Dem voters’ support but following the inconclusive election result, any Labour-Lib-Dem collaboration would have left a gap which could only be made into a majority by unreliable smaller parties like the nationalists. So Nick Clegg’s party looked to the Conservatives to whose 305 seats, their added number of 57 made a very workable majority- assuming they could agree a deal.

Voting Reform: Like their predecessors the Liberal Party, the Lib Democrats railed against a voting system which gave scant reward to a party with thin national support; in 1983 the Liberal-Social Democrat Alliance won 26% of the vote but barely 4% of the seats. Reform of the voting system was therefore the Holy Grail sought by the third party and Cameron was forced to equal Labour’s offer to tempt Nick Clegg to enter the Conservative embrace. For Liberal Democrats, winning the AV referendum is a very big deal. For over half of Labour MPs however, and probably an equal number of Conservative ones, First Past the Post(FPTP) is still their preferred choice. The debate between the ‘No’ and the ‘Yes’ campaigns will escalate until 5th may when the vote will resolve it- at least for the time being. This briefing outlines the arguments for and against FPTP and the mooted Alternative Vote (AV).

The Two Systems
First past the Post (FPTP): employs a simple plurality: the candidate receiving the most votes- made by an X alongside the candidate’s name on the ballot paper- wins.

Alternative Vote (AV) entails use of numbers to list preferences among candidates. Any candidate polling over 50% first choices is elected. If no candidate gets 50% then lowest scoring one is eliminated and their second preferences are distributed as if they were ‘first’ choices. This continues until someone crosses the 50% line.

FPTP Ballot Paper:

AV Ballot Paper:

The ‘Yes’ Case

First Past the Post System Considered

A System for a Bygone Age?

‘March of Democracy’ Argument: A thousand years ago Britain was ruled by and
absolute monarch who controlled the making, implementation and interpretation of
the law. An embryonic parliament gradually acquired influence and power until it
challenged and overthrew the monarchy in the 17th century Civil War, after which
parliament exercised the upper hand over a fading monarchy. In 1832 came the Great
Reform Act, its preamble stating its objective was to ‘take effectual measures for
correcting the diverse abuses that have long prevailed in the choice of members to
serve in the Commons House of Parliament.’. The Act made voting less corrupt and
the right to vote was extended gradually until all citizens over 21 became owners of
the vote, including women after 1928. Some argue that this historic advance of
democracy still has some way to go, given the shortcomings of our present voting
system, and that further reform is necessary. The Guardian newspaper, champion of
left of centre opinion has argued that the conditions which made FPTP
democratically appropriate, have now passed.

“When every voter was either Labour or Conservative, the first-past
the-post (FPTP) system of election caused few serious injustices. With only two main parties to choose from, and with most loyalties seemingly immutable, a swing in the national mood was easily – and reasonably fairly – replicated on the opposing benches of the House of Commons. For most of the 19th century, and for several decades in the middle of the 20th, British politics was a two-horse race. If the Tories were up, Labour was down. If Labour soared, the Tories sank. Those times are over. Those circumstances no longer exist. The old Britain has fragmented and its politics have fragmented with it. Voting is more shaped by things like education, gender, age, ethnicity and cultural identity, and less by class and locality alone.” (Guardian editorial 4th April 2011)

Focus of both systems: while AV is focuses on fairness within a constituency, FPTP is concerned with overall fairness and effectiveness for the UK as a whole.

Critique of FPTP according to the ‘Yes’ campaign:
i) FPTP enables candidates to be elected on a minority-less than 50%- of the votes. Two thirds of MPs were elected in this way in May 2010, arguably ‘wasting’ the votes of each majority and rubbishing the notion of FPTP’s supposed glory: the ‘constituency-MP link’.
ii) It doesn’t eliminate coalition governments: as numbers of smaller parties grow in number and size big parties cannot gain overall majorities. Coalitions are now much more likely even under FPTP because smaller parties now regularly win around 85 seats and to govern alone a party is much less likely to win the required landslide. .
iii) FPTP means smaller parties gain only a few seats e.g. the SDP-Alliance won 26% votes in 1983 but only 4% of the seats. This means large numbers of voters who support, say, Greens, do not have MPs in the legislature, a highly undemocratic outcome.
iv) Under FPTP barely 1% of the electorate in a handful of marginal contests, decide who forms the government, while millions of voters in safe seats see their votes count for nothing. This means this small number of voters exercise disproportionate power and influence.
v) FPTP has made half seats in UK ‘safe seats for life’ unlikely to change hands.
vi) FPTP doesn’t necessarily ‘kick out’ unpopular governments; only one government with a working majority has been so dealt with in the last 100 years.
vii) It is not necessarily a barrier against extremism as BNP councillors have been elected all over the UK.

AV’s Alleged Advantages
i) Would ensure elected candidate represented the majority view of voters.
ii) Under AV every vote of every voter counts in a contest, even in safe seats.
iii) Because other preferences can be crucial candidates are obliged to reach out to other voters.
iv) However, voters do not have to list preferences for all candidates.
v) Because of the above, candidates are less likely to engage in negative campaigning.
vi) Because voters can actually vote for their second preferences, tactical voting is pre-empted.
vii) AV would not assist extremist parties as they rarely attract 2nd preferences and their small numbers of 1st choices would not win them seats.
viii) As evidence of vi) above, the BNP oppose AV.
ix) Under AV parties ‘will not be able to ignore a large number of people that they ignore at the moment’ (John Denham, Labour MP)
x) AV will encourage a convergence of views; as Denham argues further, parties: ‘will need to appeal beyond their base, politicians will be forced to look for consensus, to be more open-minded, less tribal, not so slavishly loyal to party whips.’
xi) AV does not give some voters two votes, as argued by No2AV and even Douglas Hurd. Lib Dem Jo Swinson put it his way: ‘If I ask you to buy me a mars bar but a mars is not available and I suggest you buy a Twix instead, I will not receive two bars of chocolate. A transferred vote is not a multiple vote.’
xii) AV would not cost an extra £250m as claimed by No2AV. Pencils on ballot paper would be the system not expensive voting machines from Australia.
xiii) Listing preferences is not complex; Irish voters have no difficulty in understanding their much more complex Single Transferable Vote (STV) system.
xiv) It is not an ‘alien’ system: ‘AV offers an incremental, moderate improvement and that is a terribly British way of reforming our constitution.’ ( Andrew Rawnsley, Observer, 3rd April 2011.
xv) This is the system used in clubs and societies all over the country as well as the Speaker and chairs of Select committees..
xvi) Political parties also use it widely, including the Conservative party which elected David Cameron in this way. If his election had been run via FPTP then David Davis, receiving 31% of the first vote, would now be leader and presumably prime minister!

The ‘No’ to AV Case
Alleged strengths of FPTP
i) FPTP creates strong government with coalitions uncommon.
ii) It is clearly based on ‘one person one vote’.
iii) It is simple both to understand and implement.
iv) It makes it very difficult for extremist parties to succeed.
v) It is the most widely used system in world-50 countries, including USA, Canada and India, use it.

Critique of AV according to No2AV
i) By contrast to v) above, only three countries use AV: Australia (and only for its House of Representatives), Fiji and Papua New Guinea.
ii) AV will cost an additional £250m- money which could be better spent on public services.
iii) AV is complex to understand.
iv) AV is not proportional as many people insist in believing.
v) AV is unfair in that the candidate who comes second can go on to win.
vi) AV will lead to more hung parliaments with their attendant backroom deals between politicians and not involving voters.
vii) Most voters in Australia do not list any preferences meaning that many MPs win without 50% of the votes. Rallings and Thrasher say, ‘more than 4 out of ten MPs would still be elected with the endorsement of less than half the voters.’
viii) AV would not reduce the nearly 300 ‘safe seats’ where MPs have more than 50% of the vote.
ix) AV won’t stop elections being won by swing voters in a few constituencies.
x) Silly to say votes ‘wasted’ when one’s candidate is defeated; taking part in an election always carries such a risk.
xi) AV would, if anything, accentuate ‘tactical voting’ in that 2nd and 3rd preferences would be wooed.
xii) AV would not end negative campaigning

Celebrity Backing
As in USA celebrity backing for a cause is influential. So far celebs are as follows:

For AV include: Colin Firth, Joanna Lumley, John Cleese, Helena Bonham Carter,
Stephen Fry, Billy Bragg, Edddie Izzard, Tony Robinson, Richard Wilson, Art Malik,
Kris Akabussi

Against AV and for FPTP include: Peter Stringfellow, Julian Fellowes, Darren Gough, David Gower, Tony Hadley, Michael Howard, Margaret Beckett, John Prescott

‘Winning’ if first- ‘losing’ if anything else? Several more sporting celebrities oppose AV as they think, as Cameron has argued, it denies victory to the ‘winner’, i.e. the person gaining the most 1st choices. A letter to The Times(15/4/11) denied a ‘race’ was the appropriate metaphor for an election; rather, ‘more accurately the electorate should be seen as an outsize selection panel given the task of appointing someone to work for all of us’.

Political Aspects
Oddly, this is the referendum few really want. Liberal Democrats ideally want a form of Proportional Representation, like STV or AV Plus as recommended by the 1998 Jenkins Commission or as installed for the devolved UK assemblies. Nick Clegg called it, before the election, ‘a baby step in the right direction’ and also a ‘miserable little compromise’. Conservatives oppose it as they fear a near permanent alliance between Labour and the closer soul-mates, the Lib Dems, which might lock them out of power indefinitely. Labour too fear the loss of a system whereby their power had always been gained; conservatives traditionalists on the one hand and left-wingers on the other who hope one day to capture the party and lead it in a radical direction. Some, like Austin Mitchell and David Owen, advise a vote against AV on the grounds it will delay achievement of the ‘real’ objective of proper PR.

Professsor Vernon Bogdanor in The Guardian, 12h April, however, pointed out that
even if passed and implemented, AV would ‘make little difference in most general elections’. David Sanders at Essex University ran a simulation suggesting that in May 2010 AV would have resulted only in 32 extra seats for the Liberal Democrats: 22 at the expense of the Conservatives and 10 from Labour. This is not to say that the outcome of the referendum will not have far reaching consequences Lord Rees-Mogg wrote that the Conservatives are under the most pressure on the referendum: they vcan accept council losses but ‘AV would be forever.

Andrew Rawnsley tended to agree in The Observer, 10th April:

“The outcome of the referendum on voting reform is potentially explosive for one of them whichever way it goes. A No vote will cause tremors under Nick Clegg. A Yes vote will see members of his own party accusing Mr Cameron of making a catastrophic mistake when he conceded the referendum in the first place. My guess is that a win for AV will cause more trouble for Mr Cameron than defeat would mean for Mr Clegg.”

Voting in the referendum will definitely be a worthwhile activity for people who care about their governance. At present the polls are not giving clear indications as both camps have had periods in the lead. The Times’ recent Populus poll showed a drop in ‘yes’ voters from 41% in February to 33% first week April. But on 16th April The Guardian declared the ’Nos’ to be in front.

Bill Jones April 2011

Tony Blair's 'Journey'

2010-11-18T11:25:00.003Z

An Analysis of Tony Blair’s period in office based on his book, A Journey, Hutchinson (price varies but big discounts usually offered)

‘I voted Labour in 1983. I didn’t really think a Labour victory was the best thing for the country and I was a Labour candidate.’ Tony Blair, A Journey.

Tony Blair has been a feature of British life for almost two decades but still manages to be highly controversial; his 3 year in the writing, 700 page memoir- A Journey- has underlined this point emphatically. The fact that it made the bestseller lists before even being published is further evidence of an enduring public fascination with the man. Personally I have met countless people who confess how they at first perceived him as the nation’s saviour after 18 years of Conservative misery, then became disillusioned after Iraq and his ‘poodling’ to Bush, but could never quite extinguish a degree of interest or even regard for this fluent and charming public figure. I am particularly taken by this, I suppose, as I occupy a similar category. How readers react to the book I guess will more than usually with an author, depend on how they view him: friend or foe, villain or hero.

Before addressing the memoir itself it has to be said that since leaving power, Blair
has not won many additional friends by appearing to have an inordinate interest in
matching the fortunes of the super-rich whose company he seems so much to enjoy.
His property portfolio now comprises: five homes including a £3.7m des res in
Connaught Square, subsequently ‘knocked through’ to absorb an adjacent mews
property, itself worth close to a million pounds; two posh London apartments for sons
Euan and Nicky and there is, of course the $5.7m country pad, once the home of that
other great actor, Sir John Gielgud.

In addition to this there is: the hugely remunerative part-time work for the likes of JP
Morgan and Zurich Financial Services and all those after dinner speeches in USA,
China and elsewhere, at £150-200,000 a pop. Tony Blair Associates has been
shown to have a structure of such byzantine complexity that it seems clear he did not
want his financial affairs to be especially transparent. Given that Cherie was brought
up in relative poverty, it could be that his tastes were to some extent influenced by a
wife who sought the security of relative riches; I tend to think, however, it was as
much his tendency as hers. Those Labour supporters, like me, who think their party
leaders should opt for modest lifestyles(one thinks wistfully of Attlee and Bevin or
even the tea-drinking Tony Benn), not a Grand Canyon’s width from those of
ordinary voters, have deplored this tendency whereby Blair became a ‘celebrity’
prime minister, aiding and abetting the ‘filthy rich’ and losing much moral authority
in so doing.

Blair sheds some light on why he entered politics and on the side of Labour. His
Political epiphany, when the bolt of lightning struck him was shortly after he met
Cherie andvisited the Commons to meet Tom Pendry MP. Waiting in the

‘Cavernous Central Lobby…’he writes, ‘I was thunderstruck. It just hit me. This was
where I wanted to be…I had a complete presentiment: here I was going to be.’

So Blair, never seen as a ‘House of Commons man’, owed his lifetime obsession to
the magic of the place. Later on a piece of Tony Benn’s leftwing oratory also inspired
him. Why Labour and not the other side, less guilty about the high life and the party
too for which his own father aspired to be an MP? One story is that two leading Tory
MPs rather thought the same and when Blair arrived in the Commons took him out to
dinner to sound him out. Their conclusion was that the answer, on this occasion was
indeed his wife, Cherie, daughter of the leftwing actor, Tony Booth. Her own
ambitions to enter the House, were reflected in her candidacy for Thanet South in1983
but thereafter, says her husband:

‘As I became more passionate, she saw herself more as a barrister’.

Blair soon made his mark in shadow roles and when John Smith tragically died in
1994, he had to decide whether to stand for the leadership or to defer to the man who
had so effectively stood in for Smith following his earlier heart attack. His reaction to
this dilemma expressed vividly why he became leader and Brown did not.:

‘The truth is I was out in front, taking risks, and this was a time for risk-takers. I
spotted that; he didn’t.’ More on Gordon later.

Blair allows an insight into his psyche when he relates a scene in Schindler’s list, a
film which moved both him and Cherie. In it, the commandant, played by Ralph
Fiennes shoots dead a camp inmate while chatting to his girlfriend. She continues
chatting as if not involved.

‘Except that she wasn’t. There were no bystanders in that situation. You participate
whether you like it or not. You take sides by inaction as much as by action. Why were
the Nazis able to do these things? Because of people like him? No, because of people
like her.’
This story, in effect a variation on Edmund Burke’s "All that is necessary for the triumph of evil is that good men do nothing." helps explain his attitude towards ‘humanitarian intervention’; laid out in his Chicago speech in 1999. This was a plea to ‘bring down a despotic regime on the grounds of the nature of that regime’ and is, I think, a key to understanding this complex politician. He argued that, providing it is doable and all other expedients have been tried, it behoves peace-loving states to remove tyrants and liberate otherwise benighted peoples. His memoirs relate the examples of Kosovo, which brought down Milosevic and Sierra Leone, which helped bring down Charles Taylor, dictatorial leader of adjacent Liberia.
Both forays into military usage involved risk but both proved successful and seemed to fulfil Blair’s views on the duties of principled bystanders to evil. Blair’s account of the Iraq decision and subsequent events serve to add it to his ‘enlightened’ line on the morality of states. He tries hard, and with some success I thought, to convince us that his available intelligence on WMD was wholly convincing at the time and that the chances of it being true were too great to ignore. He also seeks to argue that, given the atrocities inflicted on Iran, the Kurds and his own people, the human costs of the war can be justified by the removal of a vile and monstrous dictator.
The impression I get from his book is that after his earlier successes, he somehow thought he had discovered the means to fulfil his ‘destiny’ to reshape the world for the better; some have described this as his ‘messianic tendency’. But Iraq, tragically, proved a case where massive risk failed to come off, producing extended tragedy instead of heroic success. He doesn’t either satisfactorily explain why he was so content to follow the lead of George Bush. That he liked and admired him is clear to see but to follow the American president’s judgement so blindly many of his supporters see as his greatest crime. I also wondered why he did not deflect some of the blame-either in his book or evidence to Chilcot- for the awfulness of Iraq onto the way in which the war was planned and implemented.
Rumsfeld’s naïve belief the job could be done with half the troops advised by his own military plus his ignoring of advice regarding the need to retain internal security in the wake of victory not to mention the requirement to rebuild the shattered country, are surely more culpable than anything Blair might have done or not done. Blair does not really address the ‘poodle’ accusation. Journalists like Andrew Rawnsley (see The End of the Party (2010, Viking) argue that, apart from urging Bush to involve the United Nations he never threatened to withhold full support of what the US went on to in Iraq.
Rafael Behr, reviewing George Bush’s Points of Decision in the Observer 14th October 2010, makes a shrewd point about these two authors of the Iraq invasion:
.” It is easy to see how he and Tony Blair got along so famously. Their memoirs, published weeks apart, corroborate each other's accounts of characters that clicked easily together. Both men have an evangelical sense of grace within that makes their choices immune from criticism because, whatever the outcome, the intention was honest. It is a brilliantly circular and impregnable defence – the test of a policy is not whether it works, but whether it is morally authentic, and the arbiter of authenticity happens also to be the author of the policy.”
Blair’s account of the domestic agenda is inextricably entangled with his relationship with Gordon Brown. Both men had evolved the idea of New Labour along with Peter Mandelson and Philip Gould but whereas some saw it as political expedience, with Blair, it seemed New Labour achieved the status of strongly held principle. It had begun with an acceptance of Thatcherite economics regarding tight control of inflation plus minimal regulation of market forces, thus advantaging the City and related financial sector. After Labour’s failure in the 1970s this was adopted as the new bedrock of the party’s economic thinking, embraced by both Blair and Brown. However, once funds were being channelled into the public sector Blair was keen to attach it, make it conditional upon thorough-going reform.
This is where the mantle of ‘New Labour’ seemed to pass on to Blair and be almost disowned by Brown. Blair wanted to introduce choice, competition, flexibility and the involvement of the private sector both to access new funding and add discipline to public sector activities. So we saw the introduction of Foundation Hospitals and Academies, both exercising greater autonomy, competition for resources and collaboration with the private sector. Universities, for their part, were to be financed via tuition fees to help them maintain high academic levels and keep up with the superior performance of fees- funded US universities.
For a variety of reasons Brown chose to oppose this direction as a ‘marketisation’ of
public services. Cynics concluded this was merely a political ploy to undermine Blair
and force him to surrender occupancy of number 10 sooner rather than later. The truth
is that his motives were so skewed by personal ambition that clear analysis is
impossible. For this reason Health minister Alan Milburn clashed violently with
Brown in pursuit of Foundation Hospitals and, according to Blair’s account eventually
stood down from government partly through frustration at Brown’s spoiling tactics
at the Treasury.

Historians are bound to identify the Blair-Brown feud as the dominating political
feature of New Labour’s decade in power. The 2005 election witnessed it reach a new
climax in terms of acrimony and bitterness. It had not always been like this. Writing
about their earlier friendship Blair describes how they were almost locked together:

‘Our minds moved fast and at that point in sync. When others were present, we felt
the pace and power diminish until, a bit like lovers desperate to get to love
making but disturbed by old friends dropping around, we would try to bustle them
out, steering them door-wards with a hearty slap on the back.’

It is clear Brown felt he was the senior partner, as indeed he was in terms of status in
the Labour Party as well as experience in the jungle of Scottish and Westminster
politics. But these were two very different men with different qualities. Blair was
naturally more optimistic and prepared to put himself on the line while Brown was
innately more cautious, less extrovert and confident; Blair felt the friendship losing
some momentum even as the 1990s began By late 1992, Blair felt they ‘took another
small yet significant step apart.’ when some rooms became available in Millbank
Tower.

‘At that time Gordon and I were both in 1 Parliament St, just opposite Westminster by
the bridge. Gordon decided to move to Millbank and wanted me to join him. Cherie
emphatically told me I shouldn’t. Rather to my surprise, Anji(Hunter, close aide and
lifelong friend) said the same. I didn’t go. It was no big deal; but it was another
indicator.’

Elsewhere in the memoir Blair calls his friend ‘maddening’ with ‘zero’ emotional
Intelligence but also praises him as:

‘Someone of immense talent, ability commitment. And in the end his contribution
was enormous.’

The chapter on ‘Domestic Reform’ is shot through with complaints of Brown’s sulky
intransigence over tuition fees- when his choreographed opposition within the party
nearly brought Blair down- Foundation hospitals and the rest.. Blair resolved to break
the impasse over when he would stand down. In November 2003 the two men met in
Prescott’s flat in Admiralty House. Blair told him ‘bluntly’ that he was prepared to go
after two terms ‘but the constant obstruction and wilful blocking of the reform
programme had to stop’. According to Blair, this was now the deal: Gordon
behaves, supports the New Labour reforms and he could step up to the leadership for
the third term with Tony’s support. Blair argues that after this ‘deal’ Gordon began to
feel an ‘entitlement’ to the succession and played down or ignored any compliance
with policy directions. Blair feels this arrangement, in retrospect, was unwise: it was
not their place to ‘apportion power like that’.

In the event when Blair’s aides soon told him Brown was not keeping his side of the
agreement, Blair decided to stand for a third term, thus ratcheting the feud up another
few notches. Blair discusses why he did not decisively sack Brown or move him to
another ministry. His reasons are understandable. First, Gordon had huge support in
the party, many of whom felt the travails of the party could be remedied should he
become leader. Second, sacking him would have riven the party and maybe caused a
civil war. Finally, Blair could not think of anyone better and felt ‘He gave the
government ballast, solidity and strength.’ Blair himself however, seems sometimes to
blame himself as if he is not quite sure it was cowardice on his behalf which allowed
Brown to dominate the agenda and frustrate his objectives.

While keen to talk up his successes and, as with Iraq to minimise some of his failures,
Blair candidly admits to some without reservation. Of these the Millennium Dome
was probably the major one; ‘In this day and age it wasn’t really a suitable project for
government and it never quite struck a note sufficiently attuned to the millennium.’
Also up there with the turkeys was the Hunting Ban: ‘I was ignorant about the sport. I
thought it a bit weird that people wanted to gallivant around hunting a fox, but having
read my Trollope I understood it to be part of our history. What I didn’t understand
but boy, I understood it later- was that it was a rather large part of our rural present.’
He admitted it had been a ‘disaster’.

Finally, there was the Freedom of Information Act. Many of his critics might allow
this was one of his progressive achievements but he would seek to disagree. He thinks
important decisions about the nation have to be made in private without the
fear that publicity will destroy frankness and truth.

‘The truth is that the FOI act is not used, for the most part, by ‘the people’. It’s used
by journalists. For political leaders, it’s like saying to someone who is hitting you
with a stick, ‘Hey, try this instead and handing them a mallet.’

Julian Glover’s Guardian review of the book 2nd September 2010, is mixed; he saw it
as:

‘Honest, confused, memorable, boastful, fitfully endearing, important, lazy, shallow,
rambling and intellectually correct.’

But it was also littered with genuinely revealing insights into his own actions and
Political action in general. For example, his own:

‘Tendency to think I could persuade anyone of anything provided I truly believed it
(not even experience ever quite eliminated this trait of mine).’

He is also perceptive on the place of personal attacks in politics. He explains how he:

‘Defined Major as weak; Hague better at jokes than judgement; Howard as an
opportunist; Cameron a flip-flop not knowing where he wanted to go. Expressed like
that, these attacks seem flat, rather mundane almost, and not exactly inspiring- but
that’s their appeal. Anyone of those charges if it comes to be believed, is actually
fatal.’

And again, this astute manipulator of the media had spotted something most of us had
not quite realised about it, regarding the nature of protest:

‘Let’s say a politician attends a meeting at which there are a thousand people present
and one of them shouts something. The other 999 people can be supportive or at least
reasonable in their opposition, but the lone disruptive voice is offered as
representative when the chances are it isn’t. Most people don’t make a scene, so by
definition the lone protester is atypical not typical.’

On balance I tend to see the book rather as Glover assessment above: a mixture of
contradictory, good and bad qualities. Andrew Rawnsley’s Observer review has a go
at the written style: ‘for a ‘brilliant communicator… he can be a ghastly writer’. He
then lists a sample of the clichés which abound in the book: ‘Derry was like a dog
with a bone’ Diana ‘captured the essence of an era’. ‘Lights appear at the end of
tunnels’, writes Rawnsley, ‘and wounds are rubbed with salt’.

I think this is over harsh. Blair has always striven after the common touch and this
highly personal, slightly blokish style makes the book very accessible and
authentically his book; Rawnsley is closer to the truth when he diagnoses a ‘faux
intimate style of the autobiographies of footballers or models’ The Observer
columnist does however allow that this is also a very honest book-‘this is a more
honest political memoir than most’. I was struck by the sections regarding his own
fears, his pervading, sobering fear in the wake of his landslide 1997 victory and his
palpable terror at taking PMQs:
"PMQs was the most nerve-racking, discombobulating, nail-biting, bowelmoving, terror-inspiring, courage-draining experience in my prime ministerial life, without question."
I would also agree with Rawnsley that the book is not especially well organised, the
aspect any academic first looks for in coursework student essays. I’d give Blair a B+
for aspiration- pursuing themes rather than a chronology- but only C+ for delivery as
his ‘themed’ chapters often slide lazily into chronological narratives.

Finally, I was intrigued by Dominic Lawson’s 5th September analysis in the Sunday
Times who was struck by the comment towards the end of the book: ‘Personally, I
have never felt a greater sense of frustration or indeed a greater urge to leadership’
Combine that with Blair’s comment elsewhere to a journalist that ‘I feel a
great urge to participate in my country’s political life’ and Lawson reckons ‘it adds up
to a charmingly open expression of continued ambition to return to the highest level
of domestic political power.’ The last former prime minister, arguably, to harbour
ambitions of a great return to the fray was Harold Macmillan; he never succeeded and
it would be a shame if Blair is to live out the rest of his life yearning for something
beyond his grasp, or like one of his heroes, David Lloyd George, too devalued by his
flexible relationship with the truth ever to be trusted again.

Bill Jones November 2010.

The Coalition Considered

2010-10-16T14:13:00.003Z

The Conservative-Liberal Democrat Coalition So Far

If Gordon Brown's fate has been to resemble not just one but several Shakespearean tragic heroes – cursed in his relationship with Tony Blair by a jealousy worthy of Othello, racked in the first months of his premiership by the indecision of Hamlet – then today he was Macbeth, seemingly playing out his final act. Like the embattled Scottish king holed up in his castle, watching Birnam Wood march on Dunsinane, Brown sat in No 10 knowing that, a few yards away, enemy forces were gathered, preparing to combine and seize his crown. Jonathan Freedland Observer, 9th May, 2010

Party Outcomes:
During Friday 7th May, the exhausted principal players in the election drama must have surveyed their respective positions with an admixture of feelings. All must have been disappointed, though Labour must have felt a combination of emotions. Since mid 2009 most Labour people, apart from the congenitally naive or optimistic, had expected the coming election to end in defeat. Pessimistic supporters feared a wipe-out: Labour perhaps destroyed for a generation. To return 260 seats was a substantial reassurance that the party was still in business.

The Conservatives, conversely, had long expected to cruise grandly into office, with a tidy majority. To end up in a hung parliament therefore appeared a disaster to some, a condemnation of Cameron and Osborne’s campaign strategy to others. The decision to allow televised debates when well ahead in the polls was especially the object of derision by some disaffected Conservatives. Most of them tended to be of the more traditional variety who thought Cameron’s ‘Big Society’ theme had sounded impractical and was impossible to sell on the doorstep.
But maybe it was the Liberal Democrats who were most keenly disappointed. After steady but unspectacular progress after 1992, the party had played very much a peripheral role in British politics, seeking hard to make an impact and leaning mostly towards support for Labour. Their expectations however had been electrified by the televised debates. From being a 20 per cent polling element in a ‘two and half party system’, they suddenly were an equal part of a three-way contest. Of course the voting system would not deliver them power unless they won over 40 per cent of the vote- almost unthinkable- but a 30 plus share would have given them a slew of more seats and a more powerful moral case to demand crucial voting reform. The end result however revealed that ‘Cleggmania’ had delivered virtually nothing: only one percent more of the vote than in 2005 and several seats lost besides. It was ‘so unfair and undemocratic’ many party members must have raged. But the arithmetic of the election had created a number of intriguing possibilities.

Constitutional rules:

In the event of a ‘hung’ parliament, where no party has an overall majority, the rules drawn up, based to some extent on the last time this occurred back in February 1974, lay down that the prime minister remains in office while he seeks to form a government which can command the House of Commons. In practice this means the PM tries to do a deal with another party which will facilitate a majority in the House. In 1974 Edward Heath, while having polled the more votes but was four seats short of Labour’s total of seats, tried to persuade Jeremy Thorpe’s Liberals to add their weight. Thorpe was interested but when his party insisted on voting reform as a condition, Heath backed off and Wilson took over at the head of a minority administration. Gordon Brown, therefore, accused of ‘squatting’ in Number 10 by The Sun was in fact performing his proper role to the letter. But, as he pondered his quandary, the numbers did not look promising for Brown.

The Post Election Arithmetic

The figures ended up as: Conservatives, 307; Labour, 258; Lib Dems 57; and Others, 28 (Plaid Cymru- 3, SNP 6, Greens 1, DUP, 8; Sinn Fein 5 SDLP, 5 Alliance 1). This meant that, with no overall majority available to any party two main options offered themselves: an agreement from a pact not to vote down major bills ranging to full coalition; or a minority administration in which the Conservatives, as the largest party, sought to pass their major measures, while daring the other parties to precipitate a second election in which they might be punished by the voters for bringing down the government. This feat had been achieved by Wilson in 1974 when his minority government had held on until the autumn when a second election delivered him a small majority of six.

Coalition Options

Conservative-Liberal Democrat:

This one was easily envisaged as both sets of MPs added up to a comfortable 364, easily able to survive all but the most massive backbench revolts. On the plus side: Clegg and Cameron, both public school and Oxbridge, seemed to get on well personally; both believed in robust approaches to dealing with the deficit; and both shared antipathy to Labour’s record on human rights. Against it however was a formidable list of disadvantages: Lib Dem and Conservative activists, whilst they cooperated on some councils, were frequently at daggers drawn over bitterly disputed local issues; most of the former were naturally closer ideologically to Labour; and many Lib Dem MPs had only been elected through persuading Labour voters to vote for them in order to keep Conservatives out, not put them in.

Moreover, Lib Dems feared a coalition might absorb their smaller party via a new realignment of centre left and centre-right- as had happened to the ‘National Liberals in 1931. In addition, the Conservatives were mostly opposed to the EU while Lib Dems were essentially committed to it. But the crucial bone of party contention was reform of the voting system. Once again the ‘third party’ had done badly, garnering nearly a quarter of the votes yet less than 10% of the seats. Lib Dems were desperate to achieve a more proportional system of voting while the Conservatives, aware that some 60 per cent of voters were left of centre feared such a system would lock them out of power possibly indefinitely.

Labour-Liberal Democrat:

The above realignment possibility made it very dangerous for Labour to sit back and watch it happen, with the chance it might become permanent; especially as Blair and Ashdown had both wanted such a ‘progressive alliance’ in 1997 but had been vetoed by senior figures in Labour’s Cabinet. At the end of election night, thirteen years on, something similar was to happen: a number of Labour Cabinet ministers, like Mandelson, Hain and Johnson, were openly suggesting a deal could be done on voting reform. The Lib Dems knew Labour was more sympathetic but were wary of a number of factors: Clegg had declared he did not think he could work with Labour as long as Brown was their leader; a number of Labour’s influential figures like Ed Balls, were not happy about voting reform (Brown, in addition, was believed to have been the main opponent back in 1997); and both parties disagreed on things like ID cards. But the biggest disadvantage lay in the arithmetic.

To assemble a majority Labour would need to construct a ‘rainbow’ coalition comprising themselves, the Lib Dems, plus the nationalists and the Green to achieve anything like a very slim and probably unworkable majority. The DUP might have been persuaded but their natural allies lay in the blue not red corner. Hard-headed realists on both sides doubted if such a coalition could be sustained for long. The SNP would be likely to demand a high price and any major reform of the voting system might have led to revolts in the Labour ranks. Finally, a referendum cobbled together by such an assorted collection of forces might have been perceived as opportunistic and voted down.

The End Game

The day after a desperately close fought election campaign must have left Nick Clegg exhausted. And he must have been hugely disappointed when viewing the wreckage of his hopes for a massive increase in seats turned into a net loss of five. But, so baffling and confusing had the whole process been, he suddenly found himself the much courted centre of a bidding war. Gordon Brown, still prime minister in Downing St remember, announced he would offer a referendum on the Alternative Vote system and Cabinet seats to Clegg’s party. He said he was prepared to talk to the leaders of ‘all parties’ and provide civil servant support for any negotiations.

Cameron countered by announcing a ‘big, open, comprehensive offer’ to the Liberal Democrats, recognising the differences but emphasising the common ground plus an ‘all party inquiry into electoral reform’. Clegg had said before the election that if he held the balance of power after it, he would talk to the party with the biggest mandate. Clearly the Conservatives were this party and negotiations ensued with William Hague spokesman on the Conservatives side. The media interest was intense with 24 hour news channels receiving constant attention. Rumours abounded that the EU and voting reform were proving to be sticking points but Hague and other Tory voices spoke of great good will and a substantial meeting of minds.

The next day the rightwing press were aghast to hear that Clegg had been talking secretly to Labour on Sunday. This was followed by Brown’s final attempt to keep Cameron out of his home for the past three years: he announced his resignation as Labour leader, offering to step down after a period of five months once a new Labour leader had been elected by the party. It was rumoured senior figures had urged Brown to stand down with dignity having effectively lost the election. Clegg thereupon announced he would enter into negotiations with Labour, while the country waited on tenterhooks. The day before the Observer had followed the likes of Polly Toynbee in Saturday’s Guardian in urging the negotiation of a ‘rainbow coalition’. ‘To Seize this Historic Moment, the Lib Dems Must Turn to Labour’ cried the Sunday’s editorial, backed up by columnists Will Hutton and Nick Cohen.

Labour’s resolve soon broke down however, with both sides blaming the other of not really wanting to come together and an extraordinary series of attacks on the proposed deal by a number of senior Labour figures including former Home Secretary John Reid, Lord Falconer, Andy Burnham Dianne Abott and several others. Their objections ranged from an opposition to changing the voting system to a strong sense that a ‘coalition of the losers’ would be unstable, undemocratic, short-lived and against the party’s long term interests. Clegg and his colleagues fled to the open arms of his first suitor and a coalition agreement was soon announced.

Perhaps stung by the thought Labour might steal capture the prize, Cameron upped his offer on voting reform to a promise of a referendum on the AV system. Shortly afterwards a new coalition Conservative-Liberal Democrat government was announced. Gordon Brown came out of 10 Downing St to resign with dignity and walked off with his wife and family to return to Scotland before beginning a new life, presumably not so focused on politics. David Cameron followed Brown to the palace to ‘kiss hands’ and become Britain’s 52nd prime minister. On Wednesday 12th May Cameron and Clegg appeared at a joint press conference in the garden of Number 10 Downing St, displaying an almost indecent degree of enthusiasm for each other and the new coalition.

Progress of the Coalition:

By August the coalition’s position was not looking too bad.

One thing one can say about the Coalition: its PR has been good. Anyway, The Economist's verdict, 12th August 2010, of the government's first 100 days could scarcely be improved upon; indeed a reforming incoming administration in 1997 would have been delighted with such an accolade. It's obvious the journal does not regard as the enforced imminent assault upon the city walls of Labour's public expenditure an altogether unalloyed disaster. Under Gordon Brown the UK became the Napoleonic home of dirigisme. A chart shows its spending by central government at 70% of all government spending as second only to New Zealand and above Germany (20%) and France(35%).

Labour ran a deficit even during the boom years, and stuck to its expansive three-year spending plans after recession hit. Fiscal stimulus on top of this took the deficit to a record high of 11% of GDP in 2009-10; the IMF forecast in May that it would be the biggest this year among G20 economies. Whoever won the election would sooner or later have to slash the deficit.

Osborne aims to pay off the deficit by 2014-5, less intense than some EU countries, like Ireland or Greece, but a big ask by any standards. But the journal praised the radical energy of both parties in their desire to shrink the state: 'Decentralisation has now found a home'. Education, the police and healthcare face major restructurings to make them more accountable to their local communities. Whilst aware of the dangers of precipitating the collapse of a fragile recovery, The Economist, offers a warm round of applause:

Yet with all these caveats, the new government’s vision of a looser state, and its determination to reform virtually all the public services at once, is boldly outlined. Add in the even more daring plan to cut the fiscal deficit, and Britain is in for a breathless and convulsive few years. Now and then, British elections are epochal, setting the tone for other countries, too. One such took place in 1945, when the modern welfare state got going. Another, in 1979, loosed Margaret Thatcher on a waiting world. By producing a ruling coalition that is as radical in redefining government as it is in cutting it, the election of 2010 may prove another turning point.

Policy areas:

Banking and Business-Lib Dems wanted to split retail from investment banks but Tories sceptical of this move. Result has been a commission to examine options; banks are still not lending enough. Cable is willing to fully privatise post office.

Deficit Reduction: Conservative plans dominate though Lib Dems increase of tax free allowance accepted. Otherwise latter have abandoned earlier manifesto position of not cutting too deep too fast. Eradication of the ‘structural(as opposed to ‘cyclical’) deficit’ in four years is something LDs still feel nervous about. The CSR 20th October will see LD Danny Alexander’s proposals for wholesale spending reductions. The big risk is that such cuts will slow the economy and expert opinion is still strongly divided on this point. The June Budget was criticised by the IFS for being ‘Regressive’ while the coalition claimed it was ‘fair’.

Political Reform: DPM Clegg is in charge of this, the key measure being the referendum on AV scheduled, according to the bill for next May together with equalisation of constituency boundary sizes (LDs not happy about ‘mere’ AV but Tories to campaign against it-Labour unease about it too). In addition there are: fixed term parliaments bill and an elected House of Lords bill (by end of year); plus one or two other items.

Education: Michael Gove is making the running here with his plans for more academies and to allow groups to set up ‘free’ schools. However, in both cases the number of serious take-ups has been very disappointing. LDs think along similar lines and both agree on ‘pupil premiums’, a scheme to give additional funds to schools taking on disadvantaged pupils so that they can be supported additionally. However, a major conflict is in the offing about university tuition fees which LDs oppose but Tories want to allow to rise much further. The recent Browne report supports this emphatically- average rises in tuition fees should rise to £6K- and Cable, a little shamefacedly, said he agreed w2ith the main recommendations.

Foreign Policy: LDs less keen on Afghanistan war than Tories but are ‘critical supporters’ of it. Both support Obama’s ‘surge’ and promise to withdraw troops by 2012. Cameron also wants to withdraw troops by time of next election. Obama welcomed him warmly when he visited. The Coalition is to inquire whether UK allowed torture to be used on suspects.

Defence: Trident replacement is a big issue with Tories in favour, despite £20bn cost, but LDs have won right for alternatives to be considered. It is likely replacement will be delayed until deficit has been removed. Service chiefs fighting to minimise cuts and Liam Fox not happy about imminent defence review. Simon Jenkins has called for the total abandonment of defence budget and dismissed it as ‘posturing’.

Europe: LDs launched biting attacks on Tories before election on their leaving mainstream EU grouping in parliament for a rightwing one allegedly racist and homophobic. Tory right acutely sensitive on this issue so it is potentially very divisive. Tories abandoned any attempt to rewrite EU treaties, as their rightwing wishes, as part of the coalition agreement. Cameron has made it clear he wishes to cooperate with EU partners and, while it has pleased LDs and EU partners, it has infuriated right-wingers.

Welfare: earnings link restored for pensioners as LDs wanted but public sector pensions being closely scrutinised for savings and affordability. Universal benefits have already been eroded by withdrawal of child benefit for higher rate tax payers- a policy which has won public support but enraged Tory supporters. IDS wants to introduce a new credit system which will not penalise those on benefit who return to work. LDs keen to retain Sure-start. Incapacity benefit to be made accessible only via a more stringent.

Home Affairs and Civil Liberties: LDs claim 14 of the policies in this section of the coalition agreement, many of which have been ‘actioned’. Tories have won annual immigration cap for non EU workers though Cable has objected to this. ID cards scrapped to LDs delight. Ken Clarke seems liberal on sentences and wants more, stiffer community ones and less shorter prison ones.

NHS: this has been surrendered by LDs to Tories who have introduced a big reorganisation, whereby commissioning of health services will be taken from primary health care trusts and devolved to committees of GPs. Many doubt GPs will be able to administer such a big task and that private companies might have to be called in.

Future Prospects of Coalition

LDs: Several commentators have predicted doom for the LDs. Simon Jenkins is by no means a leftwinger, despite his weekly Guardian slot, but had nothing but woe to predict for Nick Clegg(17/9/10). He starts off, amusingly, by describing Clegg as being 'in love' with Cameron:

You scurry early to the office, practising the phrase that will please him, the gesture he will notice. When you first see him in the corridor … you can't help it. The knees go. He is adorable

Unfortunately there is an angry family at home waiting to call you to account for your philandering behaviour. Jenkins praises the coalition as a 'coup' by Cameron 'worthy of Walpole': inventing a majority via a party which would die in consequence. The key question is:

'How can the Lib Dems fight the Tories at the next election when they will be defending a joint record?

The question is rhetorical of course. Clegg will have to forestall this fear at his conference... but how? Merger of the two parties possibly looms as lip-smackingly anticipated by some Tories. Jenkins suggests the coalition was a step too far. He should have agreed to stay indpendent and support what measures his party thought fit; that way he would have kept the party's integrity pure. Instead, he chose the big offfice, the car, the red boxes: the intoxication of power. He'd better enjoy it as it won't last for ever; as Jenkins grimly notes:
As leader of the Liberal Democrats, he has booked a ticket to oblivion.

Jenkins is a little too hard on the LDs maybe. In May 2010 the country faced an economic crisis, made worse by the euro crisis climaxing in Greece. The election was inconclusive but the chance to form a government lay with the LDs. If they had shirked it they would have lost credibility, they feared and argued they had a duty to step up to the plate. Maybe they will pay a heavy price but according to this view they had no choice, even to commit ‘suicide’. LDs seem happy to be in government at their Liverpool conference and they will have to lose much more support than they have so far for oblivion to beckon.

Tories: As for Cameron and the Conservatives, the future is perhaps a little less unsure. It is all dependent on two hugely important factors. First is public reaction to the CSR in a week’s time. Everyone knows it’s coming yet until the cuts bite everyone hopes it’s someone else who’ll take the hit. There has been an odd kind of ‘phoney war’ since the emergency budget 22nd June but that will soon end. The Conservatives stand at 38 in the polls, Labour at 34% and LDs at 18 but this could change rapidly. Given the shrill reaction within Tory ranks to the withdrawal of child benefit for upper rate tax payers, the reaction could be stunningly negative. Athens saw violent street demonstrations and such things might be mirrored on our streets, though Ireland has survived worse without such a dislocation.

Second, it depends on the economy. So far the recovery is fragile and some authorities have reckoned the chance of renewed recession is high. Keynesian economists, like Nobel Laureate Paul Krugman, have wondered at UK’s cavalier extraction of demand through impending expenditure cuts. Labour suggested a less drastic route to cut the deficit at about half the rate favoured by Osborne. If public opinion fastens onto the idea that the cuts were not necessary and could have been avoided, the coalition could very soon be ‘toast’. The figure below shows UK debt as substantial but not as large as some other countries.

Cameron as Prime Minister:
Even his mortal enemies would have to admit Cameron has shaped up very well to the job of being PM. Clearly his Eton background- born to rule and all that- has stood him in excellent stead. But his success has not been without rumbles in his own party, unhappy that he muddied campaign waters with his vague Big Society theme and worried he seems too liberal and too pro his coalition partners:

The right’s grievances with David Cameron are not only about policy. They have long regarded the prime minister’s leadership style as aloof and cliquey, and have neither forgotten nor forgiven his failure to win a general election they believed was eminently winnable. He aggravated this anger by retaining almost all the advisers responsible for the election campaign, while asking some Tory frontbenchers to make way for Lib Dems in the cabinet. (Economist 9/10/10).

At the party conference Cameron was keen to invoke a national, almost wartime spirit, reminiscent of the last time there was a coalition. The attempt is to place Cameron above party as a national figure. But over-personalising has dangers if the key person loses popularity- remember Blair- so Tories must be careful.

One final point needs to be made about the Conservative led coalition: its tone is nothing like earlier Tory governments. There is no hectoring shrillness, and, more significantly, no plonking, patronising upper-middle class voices, characterised, memorably by Simon Head (Guardian 2/10/10) as ‘the sneer of cold command’.

Bill Jones 14th October 2010

The Nordic Model of Government

2008-11-26T15:10:00.000Z

The Nordic Model of Government: Is it Still Relevant?

Note: this briefing draws heavily upon the superb Scandinavian Politics Today by David Arter, the foremost scholar in this area of study.

‘Up to date statistics and common sense observation depict a society that has found a viable mean between equitable distribution and solid economic performance.’ Henry Milner 1989, p16.

‘Majority building is the whole point of Swedish politics.’
Jan Bergquist, Social Democrat parliamentarian

Almost certainly the so-called ‘Nordic Model’ is based to a large extent upon the Swedish social democratic system of government which has been impressing and horrifying, according to taste, since the thirties. In 1936 the American journalist, Marquis Childs, wrote a book called Sweden: The Middle Way and it became a best seller. This was because it was written at a time when 20 million Americans were out of work while countries like Germany and the USSR provided full employment but no political liberty.

For the left the Soviet Union was especially difficult to comprehend as in theory- having abolished private property- it was ‘socialist’ and represented the shape of things to come. US journalist Lincoln Steffens visited and returned to pronounce: ‘I’ve seen the future and it works’. Others on the left like GB Shaw, visited to praise the new system and the Webbs’ Soviet Communism: A New Civilisation, was the high point of leftwing naivety But despite the carefully shepherded trips around the new ‘utopia’, many on the left distrusted a system which curbed so many democratic powers and accorded its leader the same adulation as Hitler.

Sweden, then, was seen as a salvation: a form of socialism which was midway between the two extremes, producing material plenty while preserving democratic liberty. Since the 1930s it became a Mecca for those looking for the secret of the ‘Nordic Model’ of socialism, welfare and democracy.

‘A Harmonious Democracy’: this term was used by Herbert Tingsten in 1966 to describe Sweden’s ability to resolve conflict and maintain a high standard of living. Thomas Anton in 1969 discerned how he thought how Sweden avoided conflict:

i) Policy preparation ‘extraordinarily deliberative’ via the utredning or pre-legislative commission. These were dominated by experts and fed into autonomous central boards rather than individual ministerial decision-making.
ii) Policy-Making is ‘highly rationalistic’ based on extended, thorough investigations and conducted, according to Arter in a ‘pragmatic, intellectual style… Broadly the view was that the government was established to do things, not to talk about doing things or think about doing things.’(Arter 153)
iii) Policy process is ‘very open’: all interested parties are consulted. There is a ‘remiss procedure’ whereby draft proposals are distributed to any party or group likely to be affected by them. Anton argued that while this procedure did not remove conflict, it ‘domesticated’ it and helped remove it from public view.
iv) Policy-making is consensual, with the agreement sought and reached with ‘virtually all the parties to them’ with even the dissenting statements of a commission not challenging the consensus.

Elements of the Swedish Model : David Arter discerns four of them:

a) A dominant Social Democrat (SAP) party which controlled government but not all political power. The SAP ruled Sweden from 1936, apart from a few months right up to 1976, meaning their vision had an excellent chance of being realised, though, it has to be said, they could not have done so without demonstrating a high degree of success as that vision unfolded. It should also be remarked that Swedish history for the century before the SAP came to power was one of grinding poverty; so much so that one third of its population emigrated to the USA during the first decade of the century. Sweden was known as the ‘poor house of Europe’ and it’s possible it was only mass emigration which headed off famine and rebellion. This suggests that any improvement in material conditions must have been deeply appreciated. Arter also points out that, despite being in ‘power’, other parties had a good degree of ‘policy influence’ of a kind denied to oppositions in the UK where they are almost entirely excluded from government. One explanation of the left dominance is that Sweden industrialised rather late by European standards and the traditionally elitist hierarchical society began to be transformed as the weak middle class could not resist the demands of the enfranchised proletariat. Consequently the SAP was able to gain power unencumbered by a strong middle class Liberal party. Finally, SAP prime ministers seemed to rule for a long time. Per Albin Hansson was leader of four governments; Tage Erlander was PM 1946-1969 and if Olof Palme had not been assassinated in 1986, he might have managed more than his seven years in power. Since then prime ministerial reigns have not been so extended.

b) A system which gave precedence ‘to representative over accountable government.’ By this he means, relating to the point above, that instead of holding governments to ‘account’ every four or five years, the inclusivity of the Swedish system, enables people to feel ‘the government is representative of the people as a whole. The notion of accountability, by contrast, is weak’ (p155).

c) A system which also was: founded on a historic compromise between capital and labour: organised by the social democratic party; and had established close relations with the major economic groups in society. The 1938 Saltsjobaden Pact between industry and labour was a crucial underpinning of the ‘compromise’. In effect the government invited in business representatives to advise on the economy and finance, leading to good relations between the SAP and business. This was strengthened by the informal Thursday Club discussions in the 1950s (a search on the web suggested this is now a dating agency!). ‘In short’ comments Arter, ‘neo-corporatism’ was at the heart of policy-making in the Swedish model.’

d) A political culture based upon consensus: traditionally Sweden has had a disposition to agree rather than disagree. Olof Peterson wrote(1994) ‘the aim of political decision-making has been to avoid divisive conflicts; and emphasis on compromise and pragmatic solutions has led to a political culture based on consensus’. Arter quotes Einborn and Logue to the effect that while parliamentary institutions are not dissimilar to other countries, it is the informal aspects, corporatism and political culture which make Sweden ‘more unique’. Arter explains that such a culture facilitates and reinforces a ‘bargaining democracy’ whereby ground is given in exchange for reciprocation, or as Stenelo and Jerneck suggest: ‘negotiations do not as a method of conflict resolution predominate over voting but naturally do not exclude it.’

Arter considers the deviations from this ‘Swedish model’ in other parts of Scandinavia:

Norway: this is the ‘closest fit’ in that: the Labour Party served for long periods after the war apart from a short time in 1963 and, unlike Sweden, never in coalition. Einar Gerhardsen was another long serving PM, leading four governments 1945-1965. Labour was careful to involve a wide range of group interests in the country. Again like its neighbour, using the commission device to prepare policy was traditional dating back into the 19th century, averaging about ten a year. It has been used along with the ‘remiss’ procedure to ensure new laws have been built on consensus. Group representatives are regularly co-opted onto planning committees. The Norwegian political scientist Stein Rokkan distinguished between the electoral channel determining the party in power and the corporate channel, determining what actually happens; as he pronounced: ‘votes count but resources decide’.

Denmark: here the social democratic hegemony was not present as this party had to rule in coalition for some of the 1960s but nevertheless they ‘could… be said to have exercised decisive influence on the policy agenda.’ Here again pre-legislative consultation was a feature of Danish politics long before the growth of the welfare state. ‘Corporatism’ was also a feature of Danish political practices since the 19th century, as the famous September Compromise in 1899 between unions and employers illustrated; in fact this was the first agreement of its kind in the world. On balance most students of Danish politics discern a ‘co-operative parliamentarianism in which pragmatism, tolerance, willingness to negotiate and competence are key behavioural norms’ (Fitzmaurice, 1981); all these recognisable as elements of the Nordic Model.

Finland: this country was not so famous for a consensual political culture but there was agreement for many years on keeping the USSR sweet. Also, in 1977 a meeting had established the Korpilampi Spirit when as gathering of leading pressure groups agreed to work together to stimulate the economy. Arter, however, points to clear deviations from the Nordic Model:
a) the existence of two parties on the left: the communist dominated Finnish Democratic League and the Social Democrats. The Agrarians were the party of government for many years before the rise of the Social Democrats.
b) Pre-legislative consultation was less open and less usual than elsewhere in Nordic countries. Instead interdepartmental working groups filled the gap.
c) Nor were there any significant examples of remiss and commissions of inquiry.
A kind of labour-employer compromise was agreed during the Winter war in 1940, renewed in 1946 but it was far from effective in surviving the 1950s and 60s. However a series of income policy agreements emerged from the 60s and an era of a more consensus political culture.

The Benefits of the Nordic Model
Economy: constantly expanding economic growth together with high-wage standards of living. Keeping business ‘onside’ meant there were few industrial disputes and satisfaction with their way of life, with their shining public services was high-some accused them of being ‘smug’ and ‘holier than thou’. But the economic system was most definitely capitalist, not ‘command’ as under communism or state -owned/nationalised as in UK. However the profitable outcome of the state’s business activities was translated into tax revenue and distributed to fund those excellent public services. An OECD report recently concluded a study on Nordic countries with:

“Income equality and poverty rates were lower in Denmark and Sweden than in any other OECD country, and they were below OECD average in Finland and Norway.”

Welfare Benefits include:

Medical free medical and dental treatment,
Education- free at all levels
High unemployment benefit-up to 80% of former wage plus plentiful retraining progammes for the unemployed.
Wage solidarity- worker differentials were initially reduced deliberately.
Parental leave: Gwladys Fouche in the Observer 16th November 2008 praises the benefits which return to Swedish citizens in return for their 60% tax rate:

“But the most eye-catching benefit is probably parental leave. Parents enjoy a joint parental leave lasting 480 days. For 390 days they receive 80 per cent of their income, capped at 440,000 kronor a year (£35,800), while for the remaining 90 days they receive 180 kronor (£14.60) a day. In theory the leave is split fifty-fifty, but it is up to the couple to decide how they want to organise it. One partner can give as many days as he or she wants to the other so long as each parent takes up to 60 days at the minimum. A single parent is entitled to the full 480-day period.”

The Nordic Model was and still is for many the envy of large parts of the world who felt it represented a viable ‘third way’ of material plenty plus

The Costs of the Nordic Model
These include:
High taxation, in many cases over 50% of take home pay. In the mid seventies the rightwing parties briefly were in government as anger at taxation was expressed in the ballot box.
Low Job Creation: Johan Norberg claims Sweden is good at making things but not good at creating jobs.
Economic Decline: from 1975-2000 per capita income grew by 72% in the US; 64% in Western Europe but only 43% in Sweden. By 2000 Sweden was only 14th in the OECD rankings, down from 4th in 1970.
Exploitation of the System: it was hard to prove but it widely felt to be the case: i)10% of retired people claiming invalidity benefit was more than was justified. ii) Even though Swedes are very healthy, in 2004 sickness benefits absorbed 16% of the government budget.
iii)One member of the Swedish union movement calculated that real unemployment when all the ‘hidden’ pockets were included, amounted to 20%.

Stultifying Conformity? Critics of Nordic countries focus on the conformity of their inhabitants. Madeleine Bunting, for example(Guardian August 2008) expresses it this way:

‘On successive visits to Denmark, Norway and now, just back from two weeks in Finland, I've kept bumping up against the same puzzling phenomenon: a kind of unquestioning assumption of how things should be, a form of social control about the way to behave and one's responsibilities to others. The point when it became starkly apparent in Finland was at Sunday family lunch in a country barn restaurant; every table was full but all you could hear were murmured whispers and the scrape of cutlery on china - until our families arrived, anarchic, squabbling and full of chatter, despite my Finnish friend's attempts to get us to be quiet.’

Andrew Brown, author of a charming book on Sweden called Fishing in Utopia, puts it thus:

“Everyone knows exactly what you have to do in every circumstance, everyone tries to do it, confident that everyone else is doing it and anyone who fails will be subjected to the justified scorn of everybody,"

Jante’s Law: this is a cultural phenomenon which is widespread throughout Scandinavia and it means simply:

Don't think you're anyone special or that you're better than us.

It has ten subdivisions including:
1. Don't think you are anything
2. Don't think you are as good as us.
3. Don't think you are smarter than us.
4. Don't fancy yourself better than us.
5. Don't think you know more than us
Given the ubiquity of this attitude it is hardly surprising there is such a pressure to conform to modest, discreet behaviour, not to seek to stand out or deviate from the norm.
Bunting concludes her critique with the advice that whilst we might admire the Nordic Model we should not ‘try to import it’:
“One Swede in Brown's book talks about the need for 100% "social control" in which "everyone works together": you could call it consensual authoritarianism, and it is profoundly foreign to most Britons. Despite the persistent illusions of the liberal left, it's part of why the Scandinavian welfare state has been one of the region's least successful exports.”
The next day letter writers begged to disagree: ‘what’s wrong with a remarkable degree of mutual trust and expectation’? asked one, Another pointed out at Finland has the highest number of people in higher education and the lowest number in prison. Yet another asked how we could criticise Finns for ‘not imposing their private conversations on everyone else in a restaurant’? Finally someone wondered if we might not benefit from a dose of ‘egalitarian conformity’.
Can We Transfer Nordic Model to UK?
Writer Johan Norberg comments:
‘To say that other countries should emulate the Swedish social model is about as helpful as telling an average –looking person to look like a Swedish super model. There are special circumstances and a certain background that limit the ability to imitate. In the case of the supermodel it is about genetics. In the context of economical and political models it is about the historical and cultural background.’
Sweden’s is political culture so much more consensual than the historically class divided British one.
Sweden is more unified with a small population of 9 million.
Sweden has a tradition of viewing their country as ‘The Peoples’ Home’ and trusts government to spend tax-payers’ money wisely on welfare benefits for all.
These problems however have not deterred Conservatives from urging a version of Sweden’s ‘free schools’ on the UK. When the Tories talked about a ‘voucher’ system, it failed to make much headway as the proposed values were so much less than fees for public schools. However, the success of the not dissimilar Swedish innovation has emboldened them to recommend imitation. Since 1992 Sweden has been funding private schools to educate children on behalf of the taxpayer. 900 schools, teaching 15% of children have opened up, with, it seems considerable success. Michael Gove is convinced, as The Economist (2/10/08) has it, of such

‘innovative entrants “selling themselves to parents” and driving up standards to previously unimagined heights.’
Has the Nordic Model Faded?
The articles quoted above suggest the Nordic Model is still alive and well and arousing all the old reactions of drooling jealousy on the left and sneering ridicule on the right. Arter’s analysis focuses more on the analytic:
1. Social democracy is not as strong now in Sweden where the rightwing Fredrik Reinfeldt rules; the Liberal Anders Rasmussen in Denmark; Mattie Vanhanen of the Centre party is in charge in Finland though Jens Stoltenberg sustains Labour in Norway.
2. The practice of widespread consultation is showing signs of decline. The number of commissions in Sweden is reducing; more single civil servant inquiries are being carried out; but inquiries including interest groups has remained steady at about one third of the whole. In Norway something similar is under way and a process more akin to British-US lobbying has taken its place.
In 1990 Kjell Olof Feldt, the Swedish Finance Minister regretted the failure of the unions to cooperate with its own government and predicted the ‘collapse of the Swedish model’. In November 2006 The Economist declared “ Farewell Nordic Model” judging that high taxes and inefficient public sectors made them in appropriate and old fashioned. Other articles cited in this briefing suggest these gleaming welfare utopias in northern Europe, have not lost their ability to fascinate and encourage imitation however inappropriate.

Reading
David Arter, (2008) Scandinavian Politics Today, MUP
Andrew Brown(2008), Fishing in Utopia, Granta.
Roland Huntford (1972) The New Totalitarians.
Johan Norberg, Swedish Models, National Interest Online, 6/1/06
Gwladys Fouche Where tax goes up to 60 per cent and everybody’s happy paying it. Observer, 16/11/08
Madelaine Bunting, ‘We may admire the Nordic way, but don’t try to import it.’ Guardian 15/8/08
Economist, 2/10/08, Swedish Lessons: the Tories assume the mantle of social democracy.
Bill Jones, 24/11/08 htttp//skipper59.blogspot.com/

Obama's Victory Analysed

2008-11-10T21:48:00.002Z

‘I draw the line in the dust and toss the gauntlet before the feet of tyranny, and I say segregation now, segregation tomorrow, segregation for ever’ George Wallace, when Alabama candidate for governor 1962.
[in 2008 Alabama Democrats chose Obama as their candidate]

‘If there is anyone out there who still doubts America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy- tonight is your answer’ Barack Obama Victory Address, 5th November 2008

A Historic Victory

1. Democratic Renewal: In The Guardian, 5th November 2008, Gary Younge wrote (surprisingly, given his expertise) that blacks did not even get the vote in the US until three years after Obama was born. This was not the case as the 1870 15th Amendment delivered this right. This is not to say that at the time of his birth Obama’s parents would not have been able to marry in certain southern states where segregation was in full swing and blacks could not eat with whites or ride on the same bus. However, many African Americans failed to register for voting for a number of reasons and continued to do so right up to the present day. Obama’s campaign however, focused on mobilising this section of the black population and encouraged hundreds of thousands to vote and to believe it mattered.

2. Primacy of the Spoken Word: when Obama first appeared as a candidate, few gave him much chance (including this writer)- he was too inexperienced, America was not ready to vote in a black man, he was opposed by the mighty Clinton machine and so forth. However, right from the start, in the Iowa Caucuses, he showed that, in his own phrase: ‘something’s going on’. His rallies were attended by thousands and the atmosphere was ecstatic, like revivalist religious meetings but adapted to politics. Obama’s gift for the language was soon revealed to be natural- he did not employ speech writers or autocues- and drawing on a deep well of intrinsic oratory .

3. Healing of Racial Divide: anyone familiar with the USA, knows its racism runs deep; even ordinary liberal apparently families could shock with the ferocity of their views on their black minority and the fears they felt of the threat they posed to the white population. Ever since the ending of slavery blacks have been a poor and often impoverished minority of some ten percent, its members frequently comprising the urban underclass and being disproportionately involved in crime. The Oscar winning film Crash, directed by Paul Haggis, 2004, centred on this theme, suggesting all aspects of US life were affected by its racism.

4. US People Becoming Multiracial: the US has always been a melting pot of different races, all of whom had been attracted by the freedom and opportunity America offered. African Americans had no choice in the matter but successive waves of immigrants from Europe, Asia and Latin America, chose to join this society in the belief they would achieve prosperity and freedom for themselves, families and their future descendants. Much immigration from south of the Mexico border was and remains illegal but once in the country, there is a strong tendency for immigrants to find their niche, become established and eventually become legal. White Americans are being out produced biologically and by 20409 will be in the minority. Obama’s victory is one of the first manifestations of this transformation. Rove urged Bush to woo Hispanics if the Republicans were to have any future and he even supported, against his instincts, a liberal immigration policy to do just that.

5. Recapture of the South: the Civil Rights Act of 1964 split voters in the south away from their traditional Democratic loyalties so that southern states became solidly Republican. This has damaged Democratic chances for several decades but now this seems to be reversing. Danny Finkelstein in The Times attributes this to an emergent ‘chattering’ middle class- richer and more educated than before which has markedly different views than previous recent generations.

6. Republican Agenda Outdated: this agenda of cutting taxes, fighting crime, reform social security, oppose abortion and support marriage, seems to have run its course. 29 million pay no taxes anyway, prosperity has taken the edge off crime worries and women generally tend to be opposed to the party’s stance on abortion. To even have a chance in the election Republicans needed to select a ‘maverick’ not associated with this old agenda.

7. Obama had Near Perfect Conditions for his Run: Obama would probably have lost had it not been for the huge unpopularity of Bush with 70% unhappy with his performance and only 30% giving him a positive rating. 50% believed McCain would continued Bush policies. The Republicans moreover, had eased American into the idea of black authority with Colin Powell and Condoleeza Rice. Moreover the 80% in polls who felt the country had lost its way, indicated a huge majority for Obama’s famous but comfortably nebulous notion of ‘change’. 60% felt McCain was more experienced but the positives outweighed the negatives for Obama in this contest. Finally, there was no credible third party candidate this time, unlike 2000 when Nader arguably cost Gore the contest.

8. The Campaigns: Obama’s campaign is being hailed by some as the most masterful of recent times. Based on his extraordinary inspirational appeal, he was able to show ecstatic rallies every night on the television and gather huge amounts of funding via internet campaigns: 3.1 million donations and volunteers contributed to the campaign, a huge mobilisation which will help Democrats for years to come.. The bitter fight with Clinton probably did little harm, giving the lesser known Senator precious airtime and name recognition. He was amazingly courteous, steady and calm in the debates, compared to a jittery, volatile and mostly negative McCain. His trip to Europe to speak to 250,000 in Berlin did little to help him as at that time voters were undergoing ‘Obama fatigue’.

But his strategy of contesting every state enabled him to pull off some surprising wins and forced McCain to divert resources he could have used elsewhere.
McCain’s name recognition was good as he had tried for the presidency before and been around US politics for three decades. However, he seemed to be impulsive and indecisive at times and overly negative in his style. While less experienced than Obama, he was clearly les intelligent, except to the totally committed.

Sarah Palin: his decision to adopt Sarah Palin as his running mate proved initially a huge success then a disaster as voters realised she was so raw, eccentric and ill informed. It seems, according to an article in the ST that she was known to have hugely impressed a group of senior Republican ideologues on a cruise to Alaska in 2007; the obvious thought was that the maverick McCain needed someone to firm up the core vote. McCain had only spoken to her twice before her selection and relied on the views of others. However, Nicole Wallace, given responsibility for looking after Palin by the campaign, could not prevent her charge exposing her ignorance in foreign affairs in interviews and this hurt the Republican effort.

Nor could she stop her spending embarrassing amounts on clothes-‘tens of thousands’ above the $150,000 allowance made- behaving according to one aide like ‘small towjn hill-billies looting Nieman Marcus from coast to coast.’ Yet even after the disaster on poll shows 91% of Republicans have a good view of her and 64% think she would be the best candidate in 2012.

In 2000 and 2004 Republicans won by building a more effective campaigning machine but this time Obama had more money and more volunteers on the ground. In Ohio 53% of voters said they had been approached personally by Obama canvassers. Finally, events came to Obama’s aid: the economy came roaring into the campaign to make it by far the major issue while foreign policy, McCain’s strong-point declined in importance. Satire, via You-tube also played a role in ridiculing Bush and Palin throughout the campaign.

Tina Fey on Saturday Night Live did a brilliant impression of Palin and reinforced the idea that she was not really equipped to step up to the presidency should anything happen to McCain. It might be argued that anyone in a position of governing a state of the USA should, at the very least, know that Africa is a continent rather than a single country. The impression she gave of being exceptionally ill-informed was unfortunately reinforced by just about every interview she gave.

The Results Analysed

Final Polls: Obama 53-McCain 40

Votes cast: Obama 52 (first Democrat since Carter’s 50.1% to get more than half the votes; McCain 46. Obama managed to win Independents by 8 points, supposedly McCain’s power base.

Electoral College Delegates: Obama 364; McCain 174(270 is the winning number)

Gender: Men voted about 50-50 but woman were 56 to 43 in favour of Obama; some think it was the ‘choice’ or ‘no choice’ over abortion which was the chief factor.

Race: Obama, predictably won 95% of the back vote, 41% of the white male vote plus 50% of white women and, importantly, 75% of Hispanics [he won Florida with 15 points compared to Bush’s 12 in 2004]. Race was les of a factor among younger voters two thirds of whom voted Democrat. McCain garnered 55% of the white vote, suggesting a ‘Bradley Effect’ to some degree in that polls had shown Obama only one point behind his opponent among white voters while the result was a 12 point gap. [Bob Worcester, the Mori pollster, however, reckons that over the USA as a whole, the effect was not more than 2%.] However, Obama managed to collect a bigger slice of the white vote than Bill Clinton did. For the future the Republicans have to consider how they adapt to the multiracial nature of their country, otherwise they face a long period in the cold.

Age: 69% of the 18-29 cohort voted Obama; 32% McCain. Among the over 65s the Republicans won 53-45, but for the future, older voters in future elections will have been part of the ‘convert’ election of 2008. First time voters went 68-31 to Obama reflecting the intense effort put into winning new voters and encouraging black voters to register.

Religion: Generally McCain did well among religious people in that: he won Protestants 54-45 and evangelical Christians, 74-24. However, he lost the Catholic vote 45-54 and the Jewish vote 21-78.

Urban-Rural Dwellers: Obama won:
63-35 among urban voters;
50-48 suburban
and lost out:
Small Towns: 53-45
Rural Voters: 53-45 (a 5% increase for Democrats on 2004).

Income: as usual lower income voters went democrat and Republicans picked up more of the wealthy. Obama won 73-25 of those earning under $15000; 55-43 among the $30-50,000 bracket but lost 48-51 among the $100-150,000 earners and 46-52 among those earning over $200,000.

Education:
Not high School Graduate: 28-63 Obama
High School Graduate: 47-52 Obama
Some College Education: 47-51 Obama
College graduate or More: 45-53 Obama

Issues Judged ‘Most Important’:
Economy, 63;
Iraq 10;
Healthcare, 9;
Terrorism 9;
Energy 7

Battle ground states which went Democrat [9 Democrat wins]:

Nevada 57-43
Colorado 53-46
New Mexico 57-42
Iowa 50-46
Ohio 51-47
Indiana
Virginia 52-48[home of the capital of the old Confederacy]
Florida 51-49
North Carolina
Pennsylvania55-44
[of these Florida and Ohio were probably the biggest prizes]

Is a Corrective in Order? Some Democrats are envisaging the sort of swing to the right which Bush did even on his minuscule win in 2000, but others argue-for example Paul Harris in The Observer, 9th November, that whilst the right has been rejected the left has scarcely been embraced. Even with all his disadvantages McCain still managed to poll 46% of votes and some of the wins were by tiny margins. Only 22% of Americans describe themselves as ‘liberals’ and USA is still basically a right of centre electorate. This was no landslide like FDR’s 48 states in 1936 or Reagan’s 49 in 1984. Obama lost the white vote by 12 points and whites comprise 74% of voters. ‘I don’t think it’s a mandate for a New deal’ said Howard Dean of the Democratic National Committee. Obama indeed offered an essentially moderate programme and whatever he seeks to do wil be limited by the harsh economic climate.

President Palin in 2012? The Economist seriously thinks Palin is seen by many Republicans as a good bet for 2012. Despite her fluffing of lines and mistakes, she has ‘star power’ and is a ‘quick learner’. She is certainly the best known woman politician in the USA, rather than Hillary Clinton. The nearest challenge, thinks the journal, is Mike Huckabee, who now runs his own show on Fox News. What does seem possible is that the Republicans, traumatised by their rejection will withdraw to core values and enter a period in the wilderness. John Halpin, of the Centre for American Progress commented that the Republicans ‘will factionalise severely’, just as the Tories did in UK after 1997 and Labour after 1979.

Congressional Results: Good but not a ‘Landslide’

House of Representatives: Democrats held 235 and won 19 seats while the Republicans held 173.

Senate: The Democrats managed to improve on their previous standing by 6 seats leaving them with 56 seats to the Republicans’ 40, with 2 independents and 3 undecided.

Despite this excellent result for the Democrats, they did not get the landslide many had predicted. 60 seats are required to defeat a filibuster- the procedure which enables a single Senator to speak continuously until a measure loses time. However the democrats have enough seats to pass most things and so Obama faces an auspicious opening period as president.

Challenges facing Obama:

On 6th November, The Guardian’s leader read:

‘The weight of expectation that today rests upon the frame of a 47 year old senator with no real executive experience is too great for one man and, in all probability, too large for one term of office. The nearest parallels are Abraham Lincoln taking over on the brink of civil war or Franklin Roosevelt arriving in the Great Depression. America, it seems, often reaches for a great man in its greatest need.’

Foreign Policy

Russia: One of the most pressing challenges facing the new president must be represented by ‘Putin’s Russia’, if its former president can still be seen to be in charge of it. President Medvedev made a longish speech on 5th November which:

i) blamed the USA for the world’s economic crisis.
ii) Suggested it was the USA to make the first move in repairing relationships with Russia.
iii) Expressed his anger at the expansion of NATO-Russia has always had a fear of encirclement
iv) Challenged American placements of missiles in Poland and the Czech Republic-the claim that these are ‘defensive’ missiles must ring false in the Kremlin.
v) Suggested to one major expert on Russia, Alexander Golts, that Russia is deliberately to create a military threat to the west by placing its own 500 mile range Iskander missiles in Kalingrad on the border with Europe as well as installing a radio-electronic device to scramble US control communications.
vi) Attacked state bureaucracy interfering in the economy- pretty rich, says the Economist, considering the president is the creature of Putin, who did much meddling himself.
vii) The presidential term is to be extended from four to six years- a sure sign Putin is addicted to power and wants to consolidate it further. And the Duma’s terms are to be extended from four to five years. Putin will be allowed to stand for president again in 2012 and then can in theory look forward to another 12 years in power. The Duma’s extension is less significant as it is virtually a rubber stamp via the United Russia Party anyway.

Writing in The Guardian 7th December, Simon Jenkins, reckoned:

‘No service is done to Obama by overstating his revolution as a second coming.’

In respect of the Russian threat he went on to say:

“An early test will be his response to the extraordinary sabre-rattling by the Russian president, Dmitry Medvedev. Medvedev's proposal to station missiles in the Russian exclave of Kaliningrad between Poland and Lithuania is a crude reaction to George Bush's location of defence installations in a number of former Warsaw pact countries. It is so clearly a challenge to Obama's resolve that it demands an immediate reply. The opportunity is for a classic show of firmness combined with an openness to negotiate. Kaliningrad could yet be Obama's Cuban missile crisis - the geographical parallel is eerily similar - before he has even taken office.”

Middle East
Iraq: Obama plans to pull out of Iraq within 16 months but some argue that in practice this might be finessed differently. The idea then is to ‘surge’ in Afghanistan but some argue e.g. Simon Jenkins, that this too will end in many tragic tears for the west.

Syria: rumoured Obama will seek to separate Damascus from Iran with a deal seeking to give them Golan Heights in exchange for peace with Isreael.

Iran: Obama wants to open up dialogue with Iran once present president has moved on.

Climate Change: Obama in favour of emissions cap and charging system as advocated by Europe though including China and India as some experts argue should be exempted.

Nuclear Proliferation: seeks to prevent Iran from joining club and mutual reductions with Russian weaponry.

Challenges at Home

Economic: he must
i) Act to remedy the imminent economic recession which will probably be the worst for seventy years.
ii) Act to solve the world economic crisis set in train by US banks.
iii) Alleviate problems of unemployment and poverty at home which will accompany recession.
iv) He has promised to reduce taxes on the poor and increase them on the rich but no details have been offered as yet.

Health service: he is committed to extending the range of health insurance in US. This was the rock on which Clinton’s early presidential hopes foundered so it must be handled with real care.

Poverty: nowhere in US society is poverty more of a problem than within the black community. More than 70% of black babies born in America are to single mothers; a black baby girl is more than twice as likely to die in infancy than a white one; she is also more likely contract diseases like asthma and diabetes; more prone to obesity and to end up in an underfunded understaffed state school where grades do not compare with white schools.
His victory has enthused some blacks to think Obama will initiate a big payout for them but he made no special promises and any perception of special treatment will put his winning electoral coalition at risk. It seems clear the astonishingly successful Harlem Children’s Zone programme-where welfare services, combine with education, health and environmental programmes to transform a specific block to be followed by a contiguous one and so on- will be rolled out in a range of other US cities.

Conclusion
It seems Obama has worked hard to assemble a key group of advisers and aides to address these problems during the interregnum before 20th January; he will need all the wisdom his able team can provide.
Obama’s degree of success will depend on how the world responds to him. Right now he enjoys a honeymoon but this will soon end as problems emerge and people feel they have not been treated fairly. It is by no means unlikely that if we discuss US politics in a year’s time, President Obama will not be perceived in such a saintly light and that critics will be condemning his administration as a dangerous failure. That’s no more than politics.

Putin's Russia

2008-11-09T06:35:00.002Z

‘For Russians a strong state is not an anomaly that should be got rid of. Quite on the contrary, they see it as a source and guarantor of order and the initiator and driving force of any change….I am not calling for totalitarianism…A strong state power in Russia is a democratic, law based, workable federal state.

Vladimir Putin, 1999.

‘To grow further it [the Russian economy] will have to dismantle the lawless system Mr Putin has created’.

Economist, 1st March 2008

Historical Background: Russia has tended to have an authoritarian political culture, most popularly associated with Ivan the Terrible who became Tzar of all Russia in 1547. Ivan was intelligent and impulsive though some said mentally ill at times. He succeeded in expanding Russia into a major empire of a billion acres; Russia is still the biggest country in the world- 6.6.6mn square miles. His reputation has perhaps been unearned in respect of his character for, whilst he was a strong, autocratic ruler, he was not especially cruel. The same cannot be said for the man who eventually helped sweep away the machinery of the imperial court: Joseph Stalin.

Stalin: The son of an alcoholic cobbler in Gori, Georgia, Joseph Dzugashvilli, was an outstandingly bright young scholar and a charismatic leader of his peer group, [as well as, incidentally, a noted singer, often employed to sing at weddings]. Urged on by his resourceful and indefatigable mother, he managed to study for a time in the Tbilisi seminary as a trainee priest where studies resembled a form of highly programmed mind control- a precursor perhaps for his governing style from the Kremlin. He soon became engaged in gangster-terrorist activities-robbing banks and running protection rackets- to help finance those who would overthrow the Tzars in favour of a Marxist Russia.

He helped Lenin achieve this result and when Lenin died, cleverly manipulated his way into a position of power from whence he worked to eliminate his rivals until he had made his role of Secretary of the Soviet Communist Party, effectively that of dictator. He insisted his vision of ‘socialism in one country’ should be the template for the world revolution to be pursued in the names of Marx and Lenin.

Lenin had effectively retained the relatively well organised and established Tzarist police, the Okhrana- turning them into the ‘Cheka’ in 1917. The role of the secret police-more like an internal Bolshevik army- was to defend the revolution and police important parts of the new state like the forced labour camps. As Stalin’s rule evolved he used the secret police-now called the NKVD and later the KGB- to enforce his collectivisation of agriculture and suppress resistance to the resultant famine which accounted for hundreds of thousands of peasants. Vast numbers were employed, on flimsy punitive pretexts as virtual slave labour on state driven enterprises designed to establish the foundations of heavy industry in a mainly rural country.

There was no political freedom allowed in terms of democracy-despite an ostensibly highly democratic constitution- and cultural endeavour was kept rigidly to the support of the supposed ideological underpinnings of the state. The whole of the Union of Soviet Socialist Republics, the USSR, as it was christened in 1922, became the instrument for the fulfilment of a tyrant’s dream of ‘socialism’. During the war the Soviet people suffered to an even greater degree but they fought for the survival of their ‘Russian’ homeland rather than any worldwide revolution.

At the end of the war, the Soviet Union was now a great power which Stalin advanced into Eastern Europe and beyond, precipitating the ‘Cold War’ as the west mobilised to defend itself against what it feared might prove to be a military as well as ideological onslaught. Stalin died in 1953 of a stroke; amazingly, given the murderous nature of his rule, thousands visited his coffin in tears. He was succeeded by Khrushchev (1953-64) who, in a sharp departure from Soviet practice, denounced Stalin’s methods of governance, though did not do much to change them. Nor did his successors, Leonid Breznhev (1964-82), Andropov (1982-84) and Chernenko (1984-85). However, the next person in charge of the Soviet Communist Party was a remarkable man intent upon drastic change: Mikhail Gorbachev (1985-90).

Soviet Economy: the economy of the USSR was centrally planned, under its Gosplan agency, and a series of 5 year plans from 1928 laid the foundations of a modern economy. But the market had been excluded; all decisions were taken centrally: amounts to produce, amounts to consume, varieties of product and so forth. This worked well enough to establish the basic requirements of mining, iron smelting, basic manufacturing and so forth as the astonishing performance of the USSR in the 1941-45 war demonstrated. It also enabled high quality science based activities like nuclear weaponry and space exploration to progress to a degree which seriously worried the west in the 1950s. However, the Soviet economy was fundamentally weak as central planning is seriously flawed as a means of organising economics. Friedrich Hayek, in The Road to Serfdom pointed out that central planners just could not cope with their tasks.

‘Given that there were well over 12 million products in the USSR, some of which came in hundreds if not thousands of varieties, the volume of information within the planning system was- according to economists- exceeding the number of atoms in the universe.’
A Heywood, 1994, Political Ideas and Concepts, p272.

Decline of the Command Economies: Slowly the logic-or rather illogic- of this arrangement began to cause the economies of the ‘Eastern block’ of command economies, to slow down. Shortages were rife and western products highly regarded, so that visitors would be offered prices on the demin jeans and Beatles records. Because of waiting lists for wanted goods, shop assistants, a job with a low status in the west, had extremely high ratings in the east. Moreover, queuing was so ubiquitous a requirement in eastern block countries, that some people could make a living out of charging for queuing on behalf of others.

Inefficient operations were carried by the centralised system, fuel was wasted prodigally; no-one cared about their part of the economy as it was so vast and impersonal. An illicit black economy, of course, thrived in all communist countries. One other consequence was that politically driven targets, like defence, received priority, while consumers suffered. Potential dissent was contained by the dominance of the communist party, whose committees shadowed all the official ones. Nomination of candidates almost never extended beyond the single person favoured by the party. Democracy was a sham. But it was all overseen by the threat of the Red Army; the 1956 invasion of Hungary and the 1969 one of Czeckoslovakia proving the threat was real enough.

Slowly these economies ground to a paralysing halt, unable to compete with the more vibrant economies of the west. What was worse for the communist leaders was that their countries were now ‘more porous’; their citizens were aware of the west and the fact that the workers there did not live in poverty and desperation. Dissatisfaction was not long in asserting itself and throughout Eastern Europe in 1989, a series of revolutions occurred as former elements of the Soviet empire-sensing Soviet weakness, shrugged off Moscow’s control and resolved to become genuinely independent. This was the situation Gorbachev was forced to confront. Without the means to enforce any authority over former territories, or even over his own people, Gorbachev opted to compromise towards a liberal set of responses.

In his excellent book Russian Politics Today, Michael Waller, assesses the impact of communism in these Soviet dominated countries and notes that polls show that modern Russians still claim that life under the old regime was better. This is because over time the system did contribute some genuine benefits: everyone was in work, even if wages were low (differentials, moreover were nowhere near as great as in the west) and there was little in the shops to buy; the health service was good and was free; education was comprehensive and free; people living in towns and cities had access to more resources than when they lived in the countryside; and most people had access to cultural resources like libraries, books, television and even the theatre.

Moreover, prices of basic food were deliberately kept low while accommodation and fuel costs were ‘nominal’ according to Waller. Benefits like pensions, maternity pay, summer camps and the like were also free and administered by the trade unions. When looking back it seems citizens of the new post 1991 Russia forgot the very low levels at which living standards formerly rested nor the fact that several families often had to share the same small apartment.

Glasnost: the word means ‘voice’ in Russian, something for which Gorbachev called in March 1986. Initially Gorbachev intended merely to offer more transparency into government but this soon evolved into a spotlight on the past with Stalin’s victims like Bukharin rehabilitated and criticisms of the saintly Lenin made. Pressure grew to rename streets and towns by their pre-1917 names- e.g. Leningrad became St Petersburg again in 1991. Also circulation of political comment burgeoned and in March 1989 elections for parliament became genuine instead of prearranged. Debates in the Congress of People’s Deputies became unrestrained by fears of arrest and imprisonment.

Perestroika: meaning ‘restructuring’ is usually understood to refer to the economy;
most importantly it embraced the notion of choice. Enterprises were freed of ministerial control making them autonomous and responsible for their own success or failure. Additionally, all those small operations- moonlighting, illegal entrepreneurs, were made legal. A law in 1986 made it possible to be a private tradesman quite legally.

Federalism Unravels: Stalin’s 1936 constitution allowed substantial powers to the 15 republics of the USSR, including the right to secession. In practice this meant nothing; borders were ignored by the party and by state planners who treated the USSR as a unitary whole. Separatist tendencies were harshly suppressed. Gorbachev took steps to end the Cold War with the west, refusing to assist communist regimes as they faced domestic revolt. Within the more encouraging atmosphere initiated by Gorbachev, the constituent republics now experienced overwhelming surges of new found identity, leading to the eventual post- collapse creation out of the USSR of: Latvia, Lithuania, Estonia, Armenia, Azerbaijan, Kazakstan, Kirgyzstan, Moldava, Belorussia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Georgia.

Attempted Coup: in August 1991 some senior Soviet officials attempted to win back the Stalinist system by deposing Gorbachev. Ultra reformist Boris Yeltsin-newly elected president of the Russian Republic in June 1991- led the popular defence of the new order symbolised by the seat of the Russian parliament and presidency, the White House. The collapse of the coup ended any residual authority of the communist party and left Yeltsin poised to succeed Gorbachev as the USSR was dissolved 31st December 1991. Given his position as the main leader of Russia, once Gorbachev was cast aside, he was able to direct future reforms as he thought fit.

Economy: Yeltsin abolished Gosplan in January 1992 and freed prices from official control at the same time. The latter was part of a ‘shock therapy’ designed, with advice from western economists, to catalyse the new economy. However, it had novel impacts for former Soviet citizens. Queues were ended almost at once. But prices increased by 350% in the first month and many goods were now too expensive for ordinary citizens; income inequality suddenly became evident. During this transition period many state enterprises were privatised and:

‘There emerged a number of phenomenally wealthy financial operators, who were able to exercise a powerful influence on government, on the media and on Yeltsin personally. These ‘oligarchs’ were making their greatest influence on public life- and on public opinion-when, in the mid-1990s, the basics of life were becoming unobtainable for most of the urban population, who at that stage were too stunned and too busy seeking the means of physical survival to react to this pillaging of the nation’s wealth by a few individuals.’ Waller p14.

Privatisation: Often these people were the managers of the industries concerned. Quite often the route was for a director of a state enterprise to hive off the profitable bits of a state activity into a holding whose title they could later appropriate, leaving just the valueless shell for the state. Essentially these were criminal activities but during the 1990s under Yeltsin it was a relatively lawless time. Waller cites a study suggesting the state’s income from privatisation 1991-99 was no more than $9,7bn for the privatisation of 145,000 enterprises(waller, p195). Bankers like Vladimir Potantin and Mikhail Khodorovsky acquired assets through loaning money to the state in exchange for shares in privatised businesses. The latter acquired a 45% share of the major oil company Yukos for a ‘derisory sum’. Others who did fabulously well, like Boris Berezovsky were actually part of Yeltsin’s advisory team.

Yeltsin encountered severe political problems with his parliament- elected while the USSR existed- where some urged him onwards and others to be cautious. His personal style of living also became an issue with his family seeming to be involved in policy-making not to mention his frequent embarrassingly drunken appearances, which shamed the many Russians hoping their country could regain respect and influence in the world. Under this leader Russia declined in many ways so that taxes were not collected, government servants were not paid, the government became virtually dysfunctional. Many Russians looked back nostalgically to the time of Stalin and the discipline of a communist system.

Vladimir Putin
On 31st December 1999 Vladimir Putin became acting president of Russia and then in March 2000 was elected for a four year term; he was re-elected in 2004. He was born in Leningrad October 1952 to a factory worker mother and a naval officer later NKVD officer father; his grandfather had been personal cook to Lenin and then Stalin. Vladimir studied law at university in his home city. He joined the KGB and the Communist Party, working as an intelligence officer on internal dissent. After a spell in Dresden, East Germany, he returned to Leningrad to become international adviser to Anatoly Sobchak, former law lecturer and now mayor of his city. He was accused of issuing licences for $93m of ferrous metals in exchange for food aid from abroad which never came to the city. A commission investigated and recommended he be fired but this did not happen.

He continued as chair of the Committee for External Relations, from 1992 to March 2000. He was also on the advisory board of the German property holding Saint Petersburg Immobilien und Beteiligungs AG (SPAG), a company which investigated for money laundering by the German authorities.
In June 1997 Putin defended his thesis on Strategic Market Forces; the web entry on this event claims the thesis was substantially plagiarised. In July 1998 he was made head of the FSB by Yeltsin, the successor body to the KGB. In August 1999 Putin was made a deputy Prime Minister and Yeltsin said he wanted Putin to be his successor.

Putin’s emergence into the limelight coincided with the 1999 Chechnya invasion of Dagestan and his tough policy towards this war provided him with a convenient platform for popular election; his \KGB background proved no barrier to popularity. He became acting president in December 1999 and was well placed to fight and win the March 2000 presidential election, pledging support- but significantly not membership- to the newly formed Unity Party. Waller characterises Putin’s style as subtly indirect (p43). He managed to stay detached from political issues, never leading a party- though certainly supporting first the United Party and then its successor United Russia.

‘From his detached vantage point in the presidency he has was able to criticise the government without making himself vulnerable for its failures. Putting himself above party and sectional interests, Putin has been able to present himself as the People’s President, aware of a popular belief in a strong hand at the centre, and aware also of a popular mistrust of political parties and business people determined to appropriate portions of the common patrimony.’ P43

In the conclusion to his book Waller judges that under Putin the political pendulum, which swung to the liberal side of the spectrum under Gorbachev and Yeltsin, returned towards the authoritarian end.

• The media has been effectively controlled so that united Russia has untrammelled access to air its views. The Chechnya affair allowed Putin to force the exile of Vladimir Gusinsky, whose television channel was alone in criticising Putin’s ruthless approach. The media is virtually as controlled now as it was under communism.
• The democratic electoral system has been allowed to ‘atrophy’, as, in the wake of the Beslan tragedy Putin ‘revoked the direct election of regional governors and republican presidents.’ Elections to the Duma had already been sullied to divest them of ‘their free and fair nature’.
• Nominations of key political positions became controlled by the president suggesting a return to the Soviet ‘nomenklatura’ system of a ruling elite. The difference in Putin’s case was that such powers of patronage were written into the constitution, something which Waller suggests ‘clearly undermines the regime’s professed democratic aspirations’.
• United Russia set up ‘party schools’ in June 2004 along the lines of the old communist party.

Russian Political Culture: as has been already mentioned, Russia has been used to an authoritarian style of government. ‘Demokratskaya’ has always been viewed as a Western European concept, more than a little alien to the Russian way of doing things. Similar problems were encountered by the USA when it attempted to impose democracy on Iraq: citizens had not become used to the idea of participation in decision-making and found it hard to adapt to such a system. Maybe this is why there was so much chaos in the 1990s when Yeltsin was in charge and why Putin became so popular once he arrived on the scene with his secret police background and aggressive way of dealing with those who opposed him.

Putin’s Personal Wealth: officially Putin is someone of modest means, only just making it into the richest 100 members of the Duma. Unofficially however, there are reports of him owning a vast personal fortune including a 4.5% stake in Gazprom- the largest extractor of natural gas in the world and Russia’s biggest company-plus a 50% share in the oil trading company Gunvor with a turnover of $40bn. The aggregate value of these and other holdings could make Putin Russia’s richest man. Putin’s response to such an accusation was as follows:

"This is true. I am the richest person not only in Europe, but also in the world. I collect emotions. And I am rich in that respect that the people of Russia have twice entrusted me with leadership of such a great country as Russia. I consider this to be my biggest fortune. As for the rumors concerning my financial wealth, I have seen some pieces of paper regarding this. This is plain chatter, not worthy discussion, plain bosh. They have picked this in their noses and have smeared this across their pieces of paper. This is how I view this."

Russia’s Economy Now: The Economist 1st March 2008 ran a special survey on the Russian economy. It notes how the Russian economy ‘took off’ in 1999-2000, growing from 6% in 1999 to 10% in 2000. Four days before Putin was elected president the first IKEA store opened in Moscow. Listening to advice from liberal economist Andrei Illarionov, he took sensible measures, accumulating foreign reserves simplifying taxation and allowing a free market in land. Illarionov quit in 2005 but now, critical of recent economic policy, reckons the takeover of Yukos in 2003 was a ‘breaking point’; before Yukos had been growing its oil output at 9% a year- by 2007 this had sunk to 1%.

Khodorovsky, owner of Yukos, had been exiled but a new state elite had taken over and legal control over the economy made to look nonexistent: ‘After Yukos, nobody can feel safe’ says one businessman quoted in the survey. The state moved in to take over more and more private concerns. Once again it is the centre of political power which determines what happens; ‘it is easier to get a competitor into jail than to compete with him’ is another quote. Corruption is rife, both regarding bribes officials to ignore rules and also in respect of officials who have shares in business and so are directly involved in making money. The World Bank places corruption in Russia on the same level as Togo.
Corruption: the giving of bribes to reduce tax demands is standard procedure and sufficient profits are made by many companies in building or mining, to make this bearable. Yet investment earlier in this year remained buoyant-up 21% in 2007. The Economist acknowledges high rates of growth but argues it would be much higher if corruption were stamped out. Big companies dominate and smaller ones struggle to keep up; the costs of starting a business in Russia is set prohibitively high say some and competition is so poor productivity is not improving. Countries like Ukraine and Georgia manage tom outperform Russia even though they have no oil.
Indeed, the journal suggests Russia is too ‘addicted’ to oil which is forging ahead but this creates a dependency and domestic manufacturing has been neglected, the value of the rouble is much too high so that new wealth is sucking in imports. Quality standards are also low as evidenced by the return of 15 jets purchased by Algeria from Russia. In addition inflation is running at about 10%. Economists note that the Russian economy, over-reliant on oil, has its fortunes tied to oil prices and when this is unpredictable, stability is lost. Income and wealth differentials are growing; as long as average salaries are increasing at a fair rate this is overlooked but new conditions might change things. The Economist pints out that after a decade of growth, Russia is only back to the level it reached just before the fall of the Soviet Union. ‘To grow further it will have to dismantle the lawless system Mr Putin has created’.

Presidency of Dmitry Medvedev: In March 2008 Putin stood down after the two terms constitutionally allowed but was able to place his close friend Medvedev as his successor and also assume the role of prime minister for himself. This relatively young Russian politician is clearly not finished exercising power in his native land. Extensive publicity of his prowess at martial arts and his well toned torso have reinforced the message that he is still the power in Russia’s Kremlin.

Putin and the Oligarchs: the emergence of a group of mega-rich Russian businessmen, dubbed the ‘oligarchs’ has directed attention to their emergence and possible involvement with organised Russian crime. Oleg Deripaska, for example, somehow managed to deal with the Russian mafia in the 1990s in the so-called ‘Aluminium Wars’ when 100 people were killed. His company Rusal, dominates the industry which provides 12% of the world’s needs. As a result of his experiences he is not allowed to visit the USA. Yet he is close to Putin and his circle. Other oligarchs, like Khodorovsky and Berezovsky are most definitely not liked by Putin and it is widely believed, according to the latter named oligarch, that Putin was behind the death of Alexander Litvinenko in November 2007, poisoned by polonium 210, a substance impossible to acquire without access to government establishments.

Russo-Georgia War in Caucasus: on 7th August Georgia’s president Mikheil Saakashvilli decided to invade South Ossetia, an area friendly to Russia and reluctant to accept the authority of Tbilisi. Russia quickly sprang to the aid of its potential ‘satellite’ with tanks pouring across the borders by 12th August. Georgia was quickly overwhelmed and had to accept terms. More difficult was the position of the west. For some time Russian weakness has encouraged the west to seek to prize countries like the Ukraine and Georgia away from Russia into bodies like the NATO and the EU. Despite plentiful statements of diplomatic support however, the west was forced to stand impotently by as Putin called their bluff. It is obvious that Putin is seeking to rebuild the way in which Russia is regarded by the west to something closer to the days of the Cold War.

Russia and the World Financial Crisis: Russia suffered more than any other emerging economic markets, destroying Kremlin claims it was immune fro world turbulence. Investment, which had been so buoyant in 2007 has been affected by the war in Georgia and signs that the Russian economy is not as strong as it might be. Since May, the dollar and rouble indeces have shed two thirds of their value. Russia’s construction industry, dependent on cheap money has seized up. Even Oleg Deripaska, Russia’s richest man had to sell big stakes abroad to meet his debt obligations. He was also given a $4.5 bn loan to his Rusal company from the government to help him survive the credit crisis.

The Economist 18th October suggests that Russia’s stability is founded on a growing economy- if that fails it could have dire political consequences. The Kremlin has come up with a $200bn rescue plan for their banks, the disbursement of which is likely to increase still more, Russia’s growing government control over the economy. However, a report on 2nd November from a Moscow news agency showed a ‘stable rise’ in Russian shares during the previous week.

Reading
Ecomists 1st March and 18th October, 2008.
Simon Sebag Montifiore(2005), Stalin: the Court of the Red Tzar, Weidenfled
Simon Sebag Montifiore(2007), Young Stalin, Weidenfeld.
Michael Waller (2005) Russian Politics Today, MUP.

Poverty and Wealth in the United Kingdom

2008-11-09T06:18:00.002Z

"For the poor will never cease to be in the land; therefore I command you, saying, 'You shall freely open your hand to your brother, to your needy and poor in your land.'
Deuteronomy 15:11.

‘He who dies rich, dies disgraced’
Andrew Carnegie (major charitable donor)

‘The rich lists are lists of shame’
Ted Turner ( founder of CNN who gave a $billion to the UN)

Historical Background to Poverty in Britain: from medieval times to 1990s.

Slavery: The reasons why ‘the poor are always with us’ are manifold but date back, in some senses to the days when there was still slavery in Britain, beginning with Roman times and then continuing through the Saxon period up to Norman times when about 10% of the population were still effectively slaves. The group of people at the bottom of the occupational ladder in terms of skills and ownership have always made up the ranks of the poor. Ironically, perhaps, the Black Death 1348-49 which killed a third of the population, especially the poor and weak, had the effect of boosting wage rates. It also placed such a premium on labour that slavery was ended by the close of the 14th century.

1530 Poor Law: this gave licences to beg to the disabled and poor. But those without the licence were whipped cruelly and then forced to return to their home parish.

1536 Poor Law: this embodied the whipping but for a second offence part of the ear was cut off; for a third offence they were hanged. It was clearly judged as wrong to be poor and without a job. Echoes of such attitudes survive strongly into the present day. Every parish was obliged to build a workhouse for the old and disabled poor where they would work at whatever they could.

1597 Vagrancy Act: the death penalty for vagrancy was abolished.

17th Century Poverty: it was calculated that half the population ate meat every day; 30% 2-6 times a week and 20% only once a week or less.

1601 Act: Overseers of the Poor were appointed for each parish, empowered to levy a local rate to help pay for care for the poor. Refusing work would earn a whipping and children were apprenticed to local employers.

18th Century: the epidemic of gin drinking took its toll on the poor in this century; it was freely available and cheap until taxed in 1751. Maybe half the population lived on subsistence level. London was marred by incredible poverty whereby people dead from starvation were left in the street. Inevitably, in these circumstances, people were prepared to steal, rob and kill to survive and crime was a desperate problem. One answer was transportation of convicts to American and then Australian colonies: several hundred thousand were shipped out during the late 18th to mid 19th centuries. The fact that they provided the basis for new law abiding populations proves criminality is not hereditary but often related to living circumstances.

19th Century: numbers on subsistence level reduced to about a quarter, though 10% were bereft of even the basic requirements. The industrial revolution had created factories and huge towns in the north; workers lived in squalid courtyards with no sanitation, often with two or three families sharing a single basement. Often survival was dependent on retention of work and there were frequent recessions in manufacturing industries at this time.

Victorians had a conflicted view towards the poor: they wished to help out of chariable and religious motives, but still blamed the poor for being indigent, the assumption being that they could work if they tried hard enough to find a job.

‘If we shield people from the consequences of their folly, we shall people the world with fools’ said social Darwinist Herbert Spencer.

‘Self-Help’, by Samuel Smiles sold thousands of copies; it was described by Robert Tressel, in his novel The Ragged Trousered Philanthropists, as a book "suitable for perusal by persons suffering from almost complete obliteration of the mental faculties".

The workhouse was regarded as a place to avoid as the regimes were strict; intentionally so as it was felt any degree of comfort would encourage the poor to avoid work completely. So children could not live with their parents and all had to engage in physically hard work. Denizens had to work hard, lost their liberty and were not allowed to vote. British Army recruiters complained at this time that most applicants were too small, weak and sickly to make good soldiers to fight in the Boer War.

1878, Salvation Army: this helped change attitudes towards poverty and poor children were provided in some cases with breakfast. Boot funds provided money for shoes and boots for children who otherwise went barefoot.

20th Century Poverty:

Roy Hattersley’s The Edwardians, cites Seebohm Rowntree’s report into York which showed 10% in dire, helpless poverty and another 18% in effective poverty. PH Mann’s survey placed the poverty wage at 18s 4p a week and by this measure 41% of the working class lived in this category. Suffering was often greatest however, not in the cities but in rural areas, where average wages were fractionally above 17s a week. About a third of these comprised the old and young.

Nationwide, it is calculated, 25% lived in ‘absolute’ poverty in the early part of the century. Absolute Poverty is the complete absence of the means to live while Relative Poverty is in comparison with other incomes. A good 10% were living on subsistence income- barely surviving day to day. In 1906 poor children were given free school meals by the Liberal government. In 1909 old age pensions started to be paid: 5 shillings a week. There were also wages councils to set minimum levels in certain industries. In 1910 Labour Exchanges were set up and sickness benefits for workers in 1911.

By 1924 only 4% were living in extreme poverty though this varied from region to region. Pensions and unemployment benefit were slowly increased though they were cut during the Depression. However during the war thousands of children enjoyed a ‘proper’ diet as a result of rationing and health levels improved. This was a factor in increasing support for Labour in 1945.

Wealth in Britain: From Medieval Times to Early 21st Century
Initially wealth was based in the land and agriculture. Land distribution was essentially political and this explains to a degree why royal succession and positions in the aristocracy were so eagerly sought after. Palaces, manor houses and grand residences in the country were paid for out of rents from tenants for the most part or inherited wealth. Blenheim Palace, built in the early 18th century was funded partly by the Duke of Marlborough and partly by a grateful nation to its war hero.

During later centuries manufacturers were able to construct huge mansions in the countryside outside the squalid towns which generated their wealth as any visit to the outskirts of northern cities like Manchester, Bradford and Leeds easily demonstrates. This wealth reached its apotheosis in Edwardian times when rich plutocrats paraded their wealth proudly and lived lives of great extravagance, cruising around the world, living in huge houses, employing armies of servants (2m in London alone). Anthony Sampson observes that the rich suffered some reverses 1914-1990 as a result of: World War I; higher taxes combined with economic recession; World War II and its aftermath of austerity and rationing, not to mention fears induced by socialism and communism.

However, he argues, the advent of the 1980s saw a change of atmosphere and removal of constraints. The upper limit on income tax was reduced to 40% while the Big Bang of financial deregulation and the ending of the Cold War opened up a world market place unleashing riches of which the fabulously rich Edwardians could only have dreamed. New phenomena began to be identified:

Affluenza: this was a condition diagnosed by psychologist Oliver James, in the book of the same name in which: very high value is placed upon ‘having money and possessions; looking good in the eyes of others and wishing to be famous’

The Super Class: in his book A Class Act, Andrew Adonis (before he entered politics) identified a new group of beneficiaries of the new atmosphere of the 1990s.

‘The Super Class, like the medieval clergy and Victorian factory owners, has come not just to defend but to believe in the justice its new wealth and status. Buttressed by a revamped official ideology (which even New Labour does not dare question) lauding financial rewards as the hallmark of success and economic growth, and rejecting post-war notions of social cohesion, by the late 1980s the professional and managerial elite was unapologetic about the explosion of income differentials and prepared to concede few if any social disadvantages in the process.’

They enjoy a standard of living unimaginable only a few decades ago:

‘London; servants; second homes; globalism; the best of private education, health and leisure; exotic foreign holidays; modern art; and almost total separation from public life; intermarriage between professionals with both partners on large incomes- these are the dominant themes of the life of the Super Class.’

Richistan: this was defined by Robert frank in his book of the same name in which he identifies a small, but rapidly growing, group of mega rich people who seem to live beyond frontiers and national tax regimes; who live in protected mansions, have private health and personal travel facilities more appropriate to a suburb than an individual. They were:

‘Creating their own country within a country, their own society within a society and their economy within an economy’ (p3)

Frank was writing of an international phenomenon, but with London as one of its major hubs and showplace for aspiring new ‘citizens’.

Reluctant to give to charity: In the US the average given to charity is 2% while in UK it is 0.6%. In 1986 two leading businessmen Sir Hector Laing and Sir Mark Weinberg set up the Percent Club whereby they tried to encourage companies to contribute 1% of their pre-tax profits to charities. They soon had to reduce this to 0.5% but after ten years the average given by top companies was the same percentage as in 1976: 0.42%.

Unjust Rewards, by Polly Toynbee and David Walker: Toynbee and Walker present their case, basically in the first 35 pages of their book.

'Parental income pretty accurately predicts whether a child will win or lose in life: the more unequally income is, the tighter the link becomes.'

They observe that 19,000 people declared annual income of more than £500,000 2003-4. Over the next two years another 30,000 joined them and the incomes of the top 1% grew at double the rate of the average income. New Labour, having accepted the tenets of liberal economics, or ‘Thatcherism’, also seemed to like the company of rich people, or at least the PM did. While Brown’s style was more austere, he encouraged rich people to live in the UK, on tax lenient terms, on the assumption that they would be spending their money in the UK and that must be good. He had no objection either to remuneration committees allowing big salaries for directors.

Toynbee uses her (now famous) analogy of a camel train crossing the desert. If the whole represents society then, she points out, if the front part travels significantly faster than the rear part, there will come a time when it cannot be said the latter is part of the train, and hence the poor part of society. They are than ‘excluded’. She fears that the yawning gap between rich and poor had reached this point in the months before the banking crisis: ‘increasingly we do not belong to the same community’; ‘a canyon divides moneyed and sub-median income Britain and the bridges across crumb le and collapse’. The rich were getting ever richer while the chances of the poor to ever acquire any assets ‘diminish further’.

The Economist (1/2/07) noted how income was ‘distributed more unequally than in almost any big rich country except America.’ The top 10% of income earners get 27.3% of the cake; the bottom 10% get 2.6%. In 1988 'the average chief executive of a FTSE company earned 17 times the average employees pay; 20 years later the ratio was closer to 70-1. An ICM poll in February 2008 showed 75% of respondents think the gap between rich and poor is too wide. Grant Thornton Accountants calculated that the UK’s 54 billionaires paid only £14.7m in tax in 2006 on fortunes totalling £126 billion. At least 32 paid no tax whatsoever and few paid capital gains tax. Toynbee and Walker calculate that if the ST’s Rich List paid all the taxes they should on income and assets, the Treasury would harvest a further £12bn per year. If tax avoidance by accountants was included this figure would rise to £25bn. £3.4 bn a year would lift enough families out of poverty to reduce it by half by the year 2020.

Worryingly social mobility seems to have ground to a halt in that the middle classes have ensured the lion's share of the good jobs are occupied either by them or their children. Alan Sugar might have emerged from a poor background, but he is very much the exception and few broad conclusions can be drawn from his experience regarding the fairness of the social system. Everyone is now aware of the mega, US-style salaries being earned by top executives, some earning more money than they could ever spend in a lifetime. Toynbee points out that the super-rich can employ super accountants to minimize their tax liabilities. Out of the 54 billionaires living in the UK, thirty two pay no income tax at all and the whole group paid only a tiny fraction of their earnings. Thereby, calculate Toynbee and Walker, the Treasury and the rest of us taxpayers are denied some £12bn a year.

On the poor the authors argue those on low incomes are despised, whether in or out of work. Such work-cleaning, looking after the elderly, working check-outs- is necessary for society to function properly, yet ‘their paltry pay devalues the work they do- the poor have been excluded. They live in an archipelago of estates where there is frequently no law and order and their children have nom option but to avoid the schools middle class people take pains to avoid. They are no longer buttressed by a strong trade union movement and are mocked by the middle classes for being vulgar ‘chavs’-Wife Swap, Shameless- and feared for their potential disorderliness. Many middle class people will cross the road when approached by more than one shell be-suited, base-ball hat wearing or ‘hoodied’ denizens of the sink estates.

‘A child from a family getting by on around £200 a week has known from the first day at school what it feels like to be worthless. This child has no birthday parties, no holidays, no plane or even train rides, no Xbox games that other children talk about and no computer for online chatting. Face-book is a closed shop. Shop windows, television images and playground conversation all painfully remind this child that he/she is excluded from the mainstream. Is it any surprise that a few of these children will devise for themselves the private gang culture that causes a national outcry?’

In the next chapter the authors report on two focus group meetings with a clutch of lawyers and bankers on the subject of wealth and poverty. They displayed an astonishing ignorance of salary levels, claiming that their own salaries were way down the top 10% of earners when they were easily in the top 1%. While they earned over £15K each, they had no idea that 90% of people earn less than £39, 825, the higher tax limit. They seemed locked in a denial that they were even rich in the first place. When questioned on the morality of their high incomes they justified them by citing their extraordinarily hard work and desire to get ahead, especially compared to teachers.

They also seemed to accept unquestioningly the traditional Tory justification of the 'trickle down' theory- that more riches for the rich equals more ‘cascading’ down to the poor; even the Conservatives have recently admitted that it's wrong to 'pretend a rising tide raises all boats'. They reckoned a ‘poverty wage to be £22K, closer to the average income of course. When asked in surveys the general public have reckoned the level to be around £11K and under.

‘Here were professionals who deal daily with money, yet how little they turned out to know other peoples’ incomes.’

Toynbee and Walker conclude:

'Here were people who may be technically adept, or good at deal making, but as a group-with one or two exceptions- they were less intelligent, less intellectually inquisitive, less knowledgeable, and, despite their good schools, less broadly educated than high flyers in other professions. With minds this coarse they wouldn't succeed in the higher ranks of the civil service, as heads of hospital trusts or good comprehensives, nor would they match up to the level of good junior ministers. Most dismaying was their lack of empathy and their unwillingness to contemplate other, less luxurious lives.

No doubt the recession will introduce some changes in attitude and awareness. Already most people have realised the house price increase bonanza has ended and high street stores are reporting reductions in spending. No doubt the rich will carry on spending, as the4 ST reported regarding socialite Nicky Haslam’s 800 guest bash on 16th October. In anticipating the recession everyone expects, Will Hutton, Observer 19/10/08 argued that the rich will have to make every effort to cross and reduce the wealth gap:

‘This is going to change the politics of the next few years. In recessions there is always a renewed impulse for fairness. In good times when everybody is doing well, the super-rich can be indulged. In bad times the shared view quickly becomes that the pain should be fairly distributed; those who are wealthy should help to alleviate the distress of those suffering the bad luck of unemployment through no fault of their own.’

Reading
R. Frank(2007), Richistan, Piatkus
O.James, Affluenza,(2007) Vermillion.
R. Hattersley(2004), The Edwardians,Abacus
A.Sampson (2004).Who Runs this Place? Headline
P. Toynbee and David Walker(2008) Unjust Rewards Granta

Bill Jones October 2008
http://skipper59.blogspot.com/

Wealth and Poverty in United Kingdom

2008-10-21T08:40:00.003Z

This briefing on wealth and poverty has been done for my Wednesday morning current affairs class

"For the poor will never cease to be in the land; therefore I command you, saying, 'You shall freely open your hand to your brother, to your needy and poor in your land.'
Deuteronomy 15:11.

‘He who dies rich, dies disgraced’
Andrew Carnegie (major charitable donor)

‘The rich lists are lists of shame’
Ted Turner ( founder of CNN who gave a $billion to the UN)

Historical Background to Poverty in Britain: from medieval times to 1990s.

Slavery: The reasons why ‘the poor are always with us’ are manifold but date back, in some senses to the days when there was still slavery in Britain, beginning with Roman times and then continuing through the Saxon period up to Norman times when about 10% of the population were still effectively slaves. The group of people at the bottom of the occupational ladder in terms of skills and ownership have always made up the ranks of the poor. Ironically, perhaps, the Black Death 1348-49 which killed a third of the population, especially the poor and weak, had the effect of boosting wage rates. It also placed such a premium on labour that slavery was ended by the close of the 14th century.

1530 Poor Law: this gave licences to beg to the disabled and poor. But those without the licence were whipped cruelly and then forced to return to their home parish.

1536 Poor Law: this embodied the whipping but for a second offence part of the ear was cut off; for a third offence they were hanged. It was clearly judged as wrong to be poor and without a job. Echoes of such attitudes survive strongly into the present day. Every parish was obliged to build a workhouse for the old and disabled poor where they would work at whatever they could.

1597 Vagrancy Act: the death penalty for vagrancy was abolished.

17th Century Poverty: it was calculated that half the population ate meat every day; 30% 2-6 times a week and 20% only once a week or less.

1601 Act: Overseers of the Poor were appointed for each parish, empowered to levy a local rate to help pay for care for the poor. Refusing work would earn a whipping and children were apprenticed to local employers.

18th Century: the epidemic of gin drinking took its toll on the poor in this century; it was freely available and cheap until taxed in 1751. Maybe half the population lived on subsistence level. London was marred by incredible poverty whereby people dead from starvation were left in the street. Inevitably, in these circumstances, people were prepared to steal, rob and kill to survive and crime was a desperate problem. One answer was transportation of convicts to American and then Australian colonies: several hundred thousand were shipped out during the late 18th to mid 19th centuries. The fact that they provided the basis for new law abiding populations proves criminality is not hereditary but often related to living circumstances.

19th Century: numbers on subsistence level reduced to about a quarter, though 10% were bereft of even the basic requirements. The industrial revolution had created factories and huge towns in the north; workers lived in squalid courtyards with no sanitation, often with two or three families sharing a single basement. Often survival was dependent on retention of work and there were frequent recessions in manufacturing industries at this time.

Victorians had a conflicted view towards the poor: they wished to help out of chariable and religious motives, but still blamed the poor for being indigent, the assumption being that they could work if they tried hard enough to find a job.

‘If we shield people from the consequences of their folly, we shall people the world with fools’ said social Darwinist Herbert Spencer.

‘Self-Help’, by Samuel Smiles sold thousands of copies; it was described by Robert Tressel, in his novel The Ragged Trousered Philanthropists, as a book "suitable for perusal by persons suffering from almost complete obliteration of the mental faculties".

The workhouse was regarded as a place to avoid as the regimes were strict; intentionally so as it was felt any degree of comfort would encourage the poor to avoid work completely. So children could not live with their parents and all had to engage in physically hard work. Denizens had to work hard, lost their liberty and were not allowed to vote. British Army recruiters complained at this time that most applicants were too small, weak and sickly to make good soldiers to fight in the Boer War.

1878, Salvation Army: this helped change attitudes towards poverty and poor children were provided in some cases with breakfast. Boot funds provided money for shoes and boots for children who otherwise went barefoot.

20th Century Poverty:

Roy Hattersley’s The Edwardians, cites Seebohm Rowntree’s report into York which showed 10% in dire, helpless poverty and another 18% in effective poverty. PH Mann’s survey placed the poverty wage at 18s 4p a week and by this measure 41% of the working class lived in this category. Suffering was often greatest however, not in the cities but in rural areas, where average wages were fractionally above 17s a week. About a third of these comprised the old and young.

Nationwide, it is calculated, 25% lived in ‘absolute’ poverty in the early part of the century. Absolute Poverty is the complete absence of the means to live while Relative Poverty is in comparison with other incomes. A good 10% were living on subsistence income- barely surviving day to day. In 1906 poor children were given free school meals by the Liberal government. In 1909 old age pensions started to be paid: 5 shillings a week. There were also wages councils to set minimum levels in certain industries. In 1910 Labour Exchanges were set up and sickness benefits for workers in 1911.

By 1924 only 4% were living in extreme poverty though this varied from region to region. Pensions and unemployment benefit were slowly increased though they were cut during the Depression. However during the war thousands of children enjoyed a ‘proper’ diet as a result of rationing and health levels improved. This was a factor in increasing support for Labour in 1945.

Wealth in Britain: From Medieval Times to Early 21st Century
Initially wealth was based in the land and agriculture. Land distribution was essentially political and this explains to a degree why royal succession and positions in the aristocracy were so eagerly sought after. Palaces, manor houses and grand residences in the country were paid for out of rents from tenants for the most part or inherited wealth. Blenheim Palace, built in the early 18th century was funded partly by the Duke of Marlborough and partly by a grateful nation to its war hero.

During later centuries manufacturers were able to construct huge mansions in the countryside outside the squalid towns which generated their wealth as any visit to the outskirts of northern cities like Manchester, Bradford and Leeds easily demonstrates. This wealth reached its apotheosis in Edwardian times when rich plutocrats paraded their wealth proudly and lived lives of great extravagance, cruising around the world, living in huge houses, employing armies of servants (2m in London alone). Anthony Sampson observes that the rich suffered some reverses 1914-1990 as a result of: World War I; higher taxes combined with economic recession; World War II and its aftermath of austerity and rationing, not to mention fears induced by socialism and communism.

However, he argues, the advent of the 1980s saw a change of atmosphere and removal of constraints. The upper limit on income tax was reduced to 40% while the Big Bang of financial deregulation and the ending of the Cold War opened up a world market place unleashing riches of which the fabulously rich Edwardians could only have dreamed. New phenomena began to be identified:

Affluenza: this was a condition diagnosed by psychologist Oliver James, in the book of the same name in which: very high value is placed upon ‘having money and possessions; looking good in the eyes of others and wishing to be famous’

The Super Class: in his book A Class Act, Andrew Adonis (before he entered politics) identified a new group of beneficiaries of the new atmosphere of the 1990s.

‘The Super Class, like the medieval clergy and Victorian factory owners, has come not just to defend but to believe in the justice its new wealth and status. Buttressed by a revamped official ideology (which even New Labour does not dare question) lauding financial rewards as the hallmark of success and economic growth, and rejecting post-war notions of social cohesion, by the late 1980s the professional and managerial elite was unapologetic about the explosion of income differentials and prepared to concede few if any social disadvantages in the process.’

They enjoy a standard of living unimaginable only a few decades ago:

‘London; servants; second homes; globalism; the best of private education, health and leisure; exotic foreign holidays; modern art; and almost total separation from public life; intermarriage between professionals with both partners on large incomes- these are the dominant themes of the life of the Super Class.’

Richistan: this was defined by Robert frank in his book of the same name in which he identifies a small, but rapidly growing, group of mega rich people who seem to live beyond frontiers and national tax regimes; who live in protected mansions, have private health and personal travel facilities more appropriate to a suburb than an individual. They were:

‘Creating their own country within a country, their own society within a society and their economy within an economy’ (p3)

Frank was writing of an international phenomenon, but with London as one of its major hubs and showplace for aspiring new ‘citizens’.

Reluctant to give to charity: In the US the average given to charity is 2% while in UK it is 0.6%. In 1986 two leading businessmen Sir Hector Laing and Sir Mark Weinberg set up the Percent Club whereby they tried to encourage companies to contribute 1% of their pre-tax profits to charities. They soon had to reduce this to 0.5% but after ten years the average given by top companies was the same percentage as in 1976: 0.42%.

Unjust Rewards, by Polly Toynbee and David Walker: Toynbee and Walker present their case, basically in the first 35 pages of their book.

'Parental income pretty accurately predicts whether a child will win or lose in life: the more unequally income is, the tighter the link becomes.'

They observe that 19,000 people declared annual income of more than £500,000 2003-4. Over the next two years another 30,000 joined them and the incomes of the top 1% grew at double the rate of the average income. New Labour, having accepted the tenets of liberal economics, or ‘Thatcherism’, also seemed to like the company of rich people, or at least the PM did. While Brown’s style was more austere, he encouraged rich people to live in the UK, on tax lenient terms, on the assumption that they would be spending their money in the UK and that must be good. He had no objection either to remuneration committees allowing big salaries for directors.

Toynbee uses her (now famous) analogy of a camel train crossing the desert. If the whole represents society then, she points out, if the front part travels significantly faster than the rear part, there will come a time when it cannot be said the latter is part of the train, and hence the poor part of society. They are than ‘excluded’. She fears that the yawning gap between rich and poor had reached this point in the months before the banking crisis: ‘increasingly we do not belong to the same community’; ‘a canyon divides moneyed and sub-median income Britain and the bridges across crumb le and collapse’. The rich were getting ever richer while the chances of the poor to ever acquire any assets ‘diminish further’.

The Economist (1/2/07) noted how income was ‘distributed more unequally than in almost any big rich country except America.’ The top 10% of income earners get 27.3% of the cake; the bottom 10% get 2.6%. In 1988 'the average chief executive of a FTSE company earned 17 times the average employees pay; 20 years later the ratio was closer to 70-1. An ICM poll in February 2008 showed 75% of respondents think the gap between rich and poor is too wide. Grant Thornton Accountants calculated that the UK’s 54 billionaires paid only £14.7m in tax in 2006 on fortunes totalling £126 billion. At least 32 paid no tax whatsoever and few paid capital gains tax. Toynbee and Walker calculate that if the ST’s Rich List paid all the taxes they should on income and assets, the Treasury would harvest a further £12bn per year. If tax avoidance by accountants was included this figure would rise to £25bn. £3.4 bn a year would lift enough families out of poverty to reduce it by half by the year 2020.

Worryingly social mobility seems to have ground to a halt in that the middle classes have ensured the lion's share of the good jobs are occupied either by them or their children. Alan Sugar might have emerged from a poor background, but he is very much the exception and few broad conclusions can be drawn from his experience regarding the fairness of the social system. Everyone is now aware of the mega, US-style salaries being earned by top executives, some earning more money than they could ever spend in a lifetime. Toynbee points out that the super-rich can employ super accountants to minimize their tax liabilities. Out of the 54 billionaires living in the UK, thirty two pay no income tax at all and the whole group paid only a tiny fraction of their earnings. Thereby, calculate Toynbee and Walker, the Treasury and the rest of us taxpayers are denied some £12bn a year.

On the poor the authors argue those on low incomes are despised, whether in or out of work. Such work-cleaning, looking after the elderly, working check-outs- is necessary for society to function properly, yet ‘their paltry pay devalues the work they do- the poor have been excluded. They live in an archipelago of estates where there is frequently no law and order and their children have nom option but to avoid the schools middle class people take pains to avoid. They are no longer buttressed by a strong trade union movement and are mocked by the middle classes for being vulgar ‘chavs’-Wife Swap, Shameless- and feared for their potential disorderliness. Many middle class people will cross the road when approached by more than one shell be-suited, base-ball hat wearing or ‘hoodied’ denizens of the sink estates.

‘A child from a family getting by on around £200 a week has known from the first day at school what it feels like to be worthless. This child has no birthday parties, no holidays, no plane or even train rides, no Xbox games that other children talk about and no computer for online chatting. Face-book is a closed shop. Shop windows, television images and playground conversation all painfully remind this child that he/she is excluded from the mainstream. Is it any surprise that a few of these children will devise for themselves the private gang culture that causes a national outcry?’

In the next chapter the authors report on two focus group meetings with a clutch of lawyers and bankers on the subject of wealth and poverty. They displayed an astonishing ignorance of salary levels, claiming that their own salaries were way down the top 10% of earners when they were easily in the top 1%. While they earned over £15K each, they had no idea that 90% of people earn less than £39, 825, the higher tax limit. They seemed locked in a denial that they were even rich in the first place. When questioned on the morality of their high incomes they justified them by citing their extraordinarily hard work and desire to get ahead, especially compared to teachers.

They also seemed to accept unquestioningly the traditional Tory justification of the 'trickle down' theory- that more riches for the rich equals more ‘cascading’ down to the poor; even the Conservatives have recently admitted that it's wrong to 'pretend a rising tide raises all boats'. They reckoned a ‘poverty wage to be £22K, closer to the average income of course. When asked in surveys the general public have reckoned the level to be around £11K and under.

‘Here were professionals who deal daily with money, yet how little they turned out to know other peoples’ incomes.’

Toynbee and Walker conclude:

'Here were people who may be technically adept, or good at deal making, but as a group-with one or two exceptions- they were less intelligent, less intellectually inquisitive, less knowledgeable, and, despite their good schools, less broadly educated than high flyers in other professions. With minds this coarse they wouldn't succeed in the higher ranks of the civil service, as heads of hospital trusts or good comprehensives, nor would they match up to the level of good junior ministers. Most dismaying was their lack of empathy and their unwillingness to contemplate other, less luxurious lives.

No doubt the recession will introduce some changes in attitude and awareness. Already most people have realised the house price increase bonanza has ended and high street stores are reporting reductions in spending. No doubt the rich will carry on spending, as the4 ST reported regarding socialite Nicky Haslam’s 800 guest bash on 16th October. In anticipating the recession everyone expects, Will Hutton, Observer 19/10/08 argued that the rich will have to make every effort to cross and reduce the wealth gap:

‘This is going to change the politics of the next few years. In recessions there is always a renewed impulse for fairness. In good times when everybody is doing well, the super-rich can be indulged. In bad times the shared view quickly becomes that the pain should be fairly distributed; those who are wealthy should help to alleviate the distress of those suffering the bad luck of unemployment through no fault of their own.’

Reading
R. Frank(2007), Richistan, Piatkus
O.James, Affluenza,(2007) Vermillion.
R. Hattersley(2004), The Edwardians,Abacus
A.Sampson (2004).Who Runs this Place? Headline
P. Toynbee and David Walker(2008) Unjust Rewards Granta

Bill Jones October 2008
http://skipper59.blogspot.com/

The Race for the White House 2008

2008-10-18T14:54:00.002Z

‘He(McCain) hasn’t lost it, but it is slipping away’ Frank Luntz, Pollster, 9/10/08

‘If the election were held today, yeah, he’s toast’. David Johnson Republican strategist, 9/10/08

Only once in the past 50 years has a party won three terms on the trot to the presidency: 1988 when G. Bush Snr won. Then a popular president , presided over a strong economy. Now a hugely unpopular president approaches his last few months in office and the economy is close to possible extinction-though fingers crossed this won’t happen. The contest to take over the White House from George W Bush has been the most enthralling for fifty years. The Democrats managed to honour the attempted replacement of the most unpopular ever US President with two unique categories of candidate; a woman and a black man.

One alone would have been unusual but two at the same time was truly remarkable. Those who claimed the USA was not ready to vote in either for the highest position in their land have had to rethink their positions as Hillary Clinton pushed her candidature to the brink of nomination while Barack Obama, the Democratic candidate, is now in a position when he can create history on 4th November. Inevitably, where politics is so personalized, biographies are of key importance.

Barack Obama: born 4/8/61 in Hawaii, where his Kenyan father was a foreign student and his mother, Ann Dunham, was a white American from Wichita. His parents divorced when he was two and then his father died in a car accident in 1982 His mother remarried a man from Indonesia where the family moved in 1967 and Obama attended school there until he was ten. Then Obama moved to live with his grandparents, moving to Los Angeles to complete his schooling in 1979. [His mother died of ovarian cancer in 1995]. Obama admitted dabbling with drugs and alcohol during these years but it did not stop him from attending Columbia University where he studied political science with some distinction.

He then moved to Chicago where he worked as a Community Development Organizer, achieving much in a short time. He entered Harvard law School in 1988, doing very well and then, astonishingly at the time, selected on the basis of his grades and written work, to be the first black editor of the prestigious Harvard Law Review. He was later elected as the first black president of the Review, in charge of 80 editors. He was appointed to Chicago University in 1992, as a professor, lecturing in constitutional law. He married fellow lawyer Michelle Robinson in 1992. In 1995 he wrote a book on race relations which morphed into a memoir, Dreams of my Father. He also worked for a number of private law firms before being elected to the Senate for Illinois in 1996, re-elected in 98 and in 2002. In 2004 he was elected to the US Senate. In July Obama ‘arrived’ nationally when he wrote and delivered the keynote address to the Democratic Convention in Boston. It was a huge success and boosted his campaign for the US Senate. He was only the 5th black Senator to have been elected. He became a candidate for the presidency in Feb. 2008. Obama’s biography is necessarily shorter than that of his opponent John McCain.

John McCain (born 1936)
He was born in Panama where his father was serving at the time as a naval officer. He has Scotts-Irish and English ancestry. He comes from a military family with his father and grandfather as 4 star admirals. He attended 20 schools as service child but excelled as a wrestler and boxer as a young man. He attended Anapolis Naval Academy in the 1950s but his volatile temperament meant he had a chequered career there and finished only 894 out of 899 cadets, despite, as his wikipedia entry says ‘having a high IQ’. He then trained as a naval aviator, gaining a reputation, in the process, as an extroverted party going person-fond of drink and girls and with a quick temper.

He completed training in 1960 as naval pilot ground attack pilot on aircraft carriers. He crashed two of his planes in his early career but became a competent, if somewhat reckless flyer. He married a model, Carol Shepp, in 1965 and had a son to add to her two step children. He was involved in the severe fire on USS Forrestal in 1967, when he was almost killed but managed to save a fellow airman involved. His bravery cannot be questioned. In October 1967 he was shot down over Hanoi and taken prisoner in Hoa Lo prison (the ‘Hanoi Hilton’ as it was called by US troops).
Dragged out of a lake he was beaten and stabbed by North Vietnamese and further very badly treated in captivity, though wounded. But his treatment improved when his captors discovered his father was a senior admiral. He lost 50 pounds in weight and his hair turned white. In March 1968 he was placed in solitary confinement -for shouting obscenities at his captors- where he stayed for two years. However, he refused early release unless those captured ahead of him were also first released. In August 1968 a programme of torture was initiated, with frequent beatings every two hours. He actually attempted suicide but guards prevented this. Finally he signed a ‘confession’, having reached his breaking point, as he later admitted. Injuries sustained left him permanently disabled, unable to raise his arms above his head.

He was released March 1973. He required months of therapy for his injuries but resumed his career, being made commander of a training establishment in Florida. During this time he admits to extra-marital affairs initiated by him. In 1977 he served in the Navy’s liaison to the Senate and absorbed his first taste of politics. In 1980 McCain met heiress Cindy-Lou Hensley whom he married after an amicable divorce from his first wife. His children did not attend the wedding and were not reconciled for some years. In April 1981 he retired from the navy with the rank of captain, heavily decorated from his war service.

McCain initially worked for his father in law’s car dealership but ran for Congress, being returned for the Republicans in 1983, serving out his term as a staunch Reaganite. He and his wife had two children and adopted a Bangladeshi child as well. He was elected to the US Senate for Arizona in 1987. He soon made his mark but became enmeshed as in the ‘Keating Affair’ as one of 5 Senators who gave assistance to a private businessman who had given them favours. His career in the Senate has not been conventional and he has done much in collaboration with Democratic senators. His reputation as a ‘maverick’ stood him in good stead when it has been necessary to distance himself from the Bush presidency, over issues like abortion and global warming for example.

In September2000 McCain ran for the presidency against GW Bush and it was dirty primary campaign with smears re McCain fathering a black child and other accusations e.g. that he was gay and his wife a drug addict. He declared his candidacy for the presidency in April 2007.

Obama’s Primary Campaign: this was dominated by his battle with Hillary Clinton, wife of Bill and part of the Democratic ‘establishment’. He surprisingly won Iowa but Hillary came back in New Hampshire. However, Obama did better at raising money for his campaign and it was obvious he had struck a chord with his emphasis on ‘change’; his meetings were like revivalist religious meetings with vast audiences responding to his oratory. Hillary could not compete in terms of charisma though she won most of the debates held with other candidates. Obama however, established good fundraising via the internet and mobilized young people as no-one has since the Kennedys; millions more are now on the electoral register as a result of Obama’s participation.
One by one the others dropped out but Hillary insisted she could still make it. However, husband Bill, proved less than an asset with his interventions tending to be negative and alienating to his audience within the party. Slowly it became apparent that Obama would win and he even reneged(19th June) on a former pledge to accept state aid for his campaign as he was now able to exceed official limits and wished to avoid the constraints of federal aid. On 23rd August, 40 years to the day after Luther king’s ‘I had a dream’ speech, he accepted the nomination of the Democratic Party at Denver with Joe Biden becoming his running mate. The Economist (23/8/08) rated Obama’s achievement in beating the Clinton machine as ‘monumental’.
Positions
Obama inevitably began to tack to the centre once adopted as candidates tend to, but his liberal positions on opposing Iraq, urging action on Darfur, introducing health insurance for the 50 million without it in the USA, taking collective action against global warming and reforming the tax system to advantage the poorer people. He would close down Guantanamo Bay and pour cash into alternative energy.

John McCain Primary Campaign
McCain faced tough opposition from rivals like Rudy Juliani and Mitt Romney in the primaries and had some difficulty in raising the millions needed to win the long primary road to nomination. Indeed, in January 2008, McCain’s campaign seemed dead in the water and many expected him to give up in favour of the stronger candidates, especially that of the former mayor of New York who had a national hero’s status. However, his only moderate speaking skills and his lack of name recognition compared to the former mayor of New York did not prevent him from making his mark as the most impressive as his party’s would-be successors to George W Bush’s disastrous reign in the White House. By going for the early primary contests he improved his name recognition and established some momentum while Juliani’s decision to hold back until later in the process proved a fatal error. By winning Super Tuesday contests in February McCain never looked back and by early March, with Mike Huckabee beaten, he was confirmed as the winner.

Political Positions
McCain had long been seen as a maverick Republican with policies opposed to his president re immigration –he was more in favour of illegals being given a route to legality; global warming- he agreed man-made actions were responsible and on abortion and gay marriage he was less inflexible. He was also less inclined to follow the religious right in their various extreme ‘culture wars’ positions. However, he agrees with Bush on being hawkish in Iraq and towards Iran and regarding terrorists. He would also close Guantanamo as a blemish on the US reputation. His unconventional background has proved an advantage as US voters decide Bush inclined Republicanism has taken USA on the wrong road.

Mutual ‘attack’ positions
McCain attacks Obama for being inexperienced, rather as Clinton did. He tries hard to avoid even the slightest suggestion of racism, though, as with Bill Clinton, on behalf of his wife, there have been occasions when he has failed. Referring to him as ‘that one’ in a televised debate was seen as openly disdainful though not racist. Republican outriders have tried to suggest Obama is variously, a Marxist, a Muslim and a terrorist but with no real purchase for any of these slurs, none has so far stuck.

Obama attacks McCain mostly for being ‘more of the same’, seeking to identify him with the discredited Bush. His age-72- is also a factor as he would be the oldest president ever, though Reagan was older beginning his second term. Otherwise Democrats seem not to have used slurs overmuch as there is evidence that voters begun to react negatively to such approaches.

The Campaign Proper since August
Given that the Democrats were favoured by 10 clear points over the republicans, it was not surprising Obama held a lead over his rival early August but there were danger signals for Obama at that time. At that time he took a break home in Hawaii to allow a lower profile for a while. Polling evidence was suggesting voters had overdosed on Obama news. Worse, news that close ally John Edwards had had an affair while his wife was suffering from cancer, had not pleased potential Democrat voters. His ecstatic public meetings had allowed Republicans to pin the tag of ‘over confidence’, even arrogance, on Obama. 51% of voters in a Pew poll said they had been hearing ‘too much’ about the man. McCain’s ads compared his rival to Paris Hilton i.e. a brainless ’celebrity’ figure.

Given the fading of Al Gore in 2000 and Kerry in 2004 at about this stage in the proceedings, Democrats were understandably worried. They were also annoyed that a man with a huge fortune and six houses (he didn’t know how many when interviewed on TV) could portray their man as a member of the privileged elite when he was the one who came up the hard way, raised by a single mother and his grand -parents.. Obama’s visit to Europe, designed to improve his low profile on foreign policy produced some amazing footage of 200,000 enthralled by his speech in Berlin but failed to impress US voters who tend to be ethnocentric and the right wing of whom regard Europeans as virtually communist anyway. On 10th August, Obama’s lead over McCain was down to a single point.

Sarah Palin as VP Candidate
In late August McCain chose 46 year-old Sarah Palin, governor of Alaska as his running mate. Compared with Obama’s safe choice of Washington veteran, Joe Biden, this was a bold and possibly rash decision. Palin had been a beauty queen, a mayor of her home town and was known to hold ultra conservative religious right views which were unreconstructed ‘Bushite’ in content. Democrats hoped for skeletons in the cupboard and teams departed north to dig for dirt. However, Palin’s address to the Republican convention was a sensation as this straight-talking handsome woman, with five children with weird names, offered her unabashed Americana aimed at ‘hockey moms’ and ‘Joe six-pack’.

Her arrival ignited the often moribund Republican campaign. It had been high risk but it appeared to have come off. Before her nomination McCain stood at 41% in the polls to Obama’s 49%; afterwards the figures were, respectively: 48% and 44%. Palin delivered a huge shot in the arm to McCain and seemed to havde mobilized the rightwing coalition which had placed Bush in the White House. Things looked very bad for Obama in the second week of September.

Presidential Debates
When the polls are so close, as they were in the two previous elections, the televised debates play a key role in presenting the candidates to the public in a direct form. Obama is more intelligent and intellectually accomplished then McCain but much less experienced. Voters anyway do not always warm to cleverness or Reagan and Bush would never have been elected. At the time of writing two debates have been held and the single VP one. McCain has performed well in both debates, appearing relaxed and confident as well as being mostly courteous but signs of tension and aggression have been evident on the Republican side. Michael Tomasky, US editor of the Guardian, reached a significant conclusion on 6th October: it was ‘substance’ which was proving decisive in these debates.

Convention has it that appearance and demeanor count for more than content in these artificial confrontations but Tomasky points out that these have been different:

‘McCain had more zingers and one-liners than Obama did and was generally speaking the aggressor. And Sarah Palin, with her repeated winks at the camera, had far more folksy ‘I’m just like you Joe-Six-pack’ approach than Joe Biden did. One liners, aggression and emotive warmth are supposed to win these contests, we are told, and they usually do. But literally every poll I have seen show voters think Obama and Biden- who were direct and substantive and between them barely said one folksy or zingy thing- won the debates and handily so. ‘

Interestingly media experts rated the debates narrow draws or wins for McCain but the public disagreed. The USA Today poll poll showed that after the 30th September debate respondents divided 46-34 in Obama’s favour. CNN had it 54-30 and CBS 39-27, with similar numbers saying Obama came over as more likeable. Palin also has not impressed in interviews, trying too hard perhaps to mug the camera and gush feminine charm rather than intelligence. There was some evidence by early October that Palin’s magic was beginning to fade. The satirists made hay with her gauche performances in the media. In response to a question about the banking bail-out on TV she replied:
‘That’s what I say that like every American I am speaking with we’re ill about this position in that we have been put there where it is the taxpayers looking to bail-out, but ultimately what the bail-out does is help those who are concerned about the healthcare reform that is needed to help shore up the economy, um, helping the, oh, it’s all got to be about job creation, too, shoring up our economy and, putting it back on the right track, so healthcare reform and reducing taxes and reigning in spending has got to accompany tax reductions and tax relief for Americans and trade we have got to see trade as opportunity not a, a , competitive, um, scary thing, but one in five jobs being created in the trade sector today we, we’ve got to look at that as more opportunity, all those things under the umbrella of job creation, this bailout is a part of that.’

Economic Crisis Hits McCain’s Campaign
Soon after the problems with Fannie Mae, Freddy Mac and AIG, where Bush was seen regularly on television trying to explain why tax-payers’ money was being used to assist the richest group in society, it became clear that McCain’s campaign was being badly hit by the crisis. The Republicans, as the party of business, banking and rich people, was being blamed for the crisis. Steve Lombardo, long time Republican campaign runner is quoted in an October 8 Guardian article that:

‘The dynamics of this election race are being driven almost entirely by the financial situation here in the USA and globally, and that works for Barack Obama.’

He saw no comeback for McCain as ‘voters have decided that the base of the problems they face are the Republican party, George Bush and by extension, John McCain.’
On this day Bush registered a new ratings low of 25%, one point above Nixon in 1974 just before he resigned. Lombardo also argues that attacks on Obama’s character are inappropriate now and will ‘smack of desperation’. No amount of tactical maneuvering over the next 29 days will change anything. 15th September, when Lehman Bros filed for bankruptcy was the crucial day: McCain told a rally: ‘the fundamentals of the economy are strong’. Veteran Republican Senator, Chuck Hagel’s wife did not help much by coming out for Obama as well on the same day.

Issue Standings in early October
The Economist 4th October gave national standings on a variety of issues for both candidates.
1. Economy: O-44; M-36: % placing issue in top 3 concerns, 84.
2. Regulation of economy: O-32; M-29: 6%
3. National security: O-31; M-48: 40%
4. Foreign policy: O-31; M-47: 40%
5. Iraq/Afghanistan: O-40; M-44: 44%
6. Healthcare: O-44; M-27: 44%
7. Immigration: O-30; M-31: 27%
8. Energy and Environment: O-45; M-19: 15%
9. Education: O-44; M-24: 16%
10. Crime: O-29;M-32: 5%
11. Culture wars(values): O-33; M-39: 15%

Current Standings in Polls
Now staunch Republican states like Indiana, which has always voted for a Republican president, both candidates are tied on 48%. Moreover, the key state of Florida, where Bush won in 2004 by 537 votes, it is now too close to call. Poll trends analysed in the article suggest electoral college votes would allocate as follows:
Solid for Obama……..196
Solid for McCain……..143
Too close to call………111
When the ‘leaning towards’ numbers are added from state polls and translated into delegates to the electoral college the numbers are:
Obama………264
McCain………163

When it is realized Obama needs 270 delegates to win, it must be obvious McCain faces a tough uphill fight to win from here.

Palin Scandal: Into this unhappy situation came the announcement on 12th October that the officasl Alaskan inquiry into Palin’s dismissal of a senior official who had refused to sack a trooper from whom Palin’s sister was obtaining an acrimonious divorce. It concluded that Palin had abused her position of power in this instance, a devastating judgement for someone seeking election to the second highest office in the land and who, because of McCain’s age, might have more expectations than most to have to step up to the presidency over the next four years, should McCain be elected.

Conclusion
To return to the opening remarks in this briefing, circumstances are far from favourable for a Republican victory and McCain is far from being a perfect candidate, aged 72, with a history of cancer. But the polls have been close enough to suggest Obama cannot assume victory. The man whom a Pew poll showed was the firm favourite of majorities in 22 countries might well succeed in healing race relations in USA and offer a gleaming role model to young blacks of a successful black man with a happy and intact family. But life is not so simple. He is such an untried novice politically that despite his dazzling gifts as a speaker, voters are still unsure for what he stands. It is by no means assured that he will win.
It is also a fact that he is to an extent a divisive figure. Those who will not vote for him because of his colour, would never admit it but up to 10% of voters might well fall into that category and in the privacy of the ballot cubicle many voters may choose to vote according to their prejudicies. However, if McCain does get elected he will find it virtually impossible to get his proposals past Congress which will be solidly Democratic after 4th November.

Prospects: The Economist is sure that whatever the outcome the future of the USA will be much different under either Obama or McCain. Both favour multilateral solutions for foreign policy. Both want to close Gauntanamo Bay Prison. Both want to join worldwide efforts to combat climate change. Both would travel the world as Bush has never done and both would receive a better welcome: Obama especially so. Both will achieve more with Congress, for which Bush showed open contempt. McCain in particular has a record of bipartisanship; Obama would have useful majorities in both houses. McCain is a classical economic liberal who wants tax cuts and less intervention to stimulate economic growth. Obama has complex intervention plans involving subsidies of various kinds; he aims to reduce the weight of tax on the average person. Obama wants to spread health care comprehensively while McCain wants to reduce costs to improve affordability. On foreign policy, there seems to be more difference than there is. Obama would stand up to Russia and China and not roll over in the Middle east either.
Bill Jones October 14th 2008

Apportioning Blame for the Crisis

2008-10-09T08:05:00.002Z

Occasionally a time happens- and this is probably one of them- when you feel a watershed in being passed. The global financial system has ben found wanting and no-one quite knows what will happen; it seems nothing will be quite the same again. So I thought I'd try to identify the reasons why things have gone so irrevocably pear-shaped over the past year or so. I have written a longer briefing on this topic elsewhere but here I'll confine myself to pointing fingers at a few culprits, some well known, others less so.

Ideology
The 1970s were a turbulent and unhappy time for the left: high inflation, unemployment, union power excessive and living standards in decline. Thatcher and Reagan came into power determined to allow market forces to 'work their magic'. Over here this meant crushing the unions, privatisation, slashing taxes and deregulating financial dealings via the Big Bang. These steps helped to launch trading in shares and securities to phenomenal heights and racked up levels of debt in the way investment banks operated. These changes also introduced the City bonus culture and the arrival of the 'super-rich'.

Subprime Loans
Faced with a glut of investment during the 1990s US banks hired it out to initiate a boom in home buying. Urged by government to help the low paid, just about anyone qualified. Some loans were given on the basis of 'no income, no job, no assets' or 'ninja' loans. Often they came with 'teaser' discounts of 4% or below, set to double after a couple of years. It followed that irresponsible lending like this caused an avalanche of foreclosures, rising from a quarter of a million in early 2007 to three quarters of a million in mid 2008.

Securitization
The secondary mortgage market has long existed. This entails mortgages being sold on, like IOUs, to investors abroad who hope the income stream of payees will realise a profit for them. In the past this has worked perfectly well. However these subprime loans loans were dodgy so financiers wrapped them up with good loans in Collateralised Debt Obligations which were so complex few could separate the good from the bad. By now, the 'build my bonus' culture was such that few bothered to look too closely and these toxic CDOs flooded the world's financial system. As debtors in the US began to cease paying, however, the extent of the problem slowly became obvious.

Underwriting High Risk Mortgages
Underwriters are the people who assess the degree of risk attached to loans regarding the borrower's ability to repay. Assessments used to take a week but a near automatic electronic system was introduced in the USA which completed the job in 30 seconds. These guys carry a heavy burden of responsibility in the wake of the crisis.

Credit Agencies
These bodies assess the credit worthiness of issuers of securities plus the securities themselves. Their incompetence was fully demonstrated by the case of Enron but in the euphoria of constant growth and huge bonuses they alolowed their eyes to be taken way off the ball and the CDOs were often given triple A ratings. These agencies also carry a heavy responsibility.

The Bonus Culture
Finally, as we all are now aware, bankers became transfixed by the ridiculous sums they could make if they acquired sufficient business for their firms. Close scrutiny and caution- the once hallmarks of bankers- gave way to a desperate desire to acquire that parking space beneath the skyscraper HQ in Wall St or Canary Wharf, for the new Ferrari. The super-rich thought nothing about spending a £100mn on new yachts or even private submarines to swank their way around the world's pleasure spots during vacations or a hugely early retirement, funded by all those bonuses, companies bought and sold.

Simon Jenkins suggested a week or so ago that a tribunal into the crisis was required. Well, he could fill up his dock from the above three categories with no trouble and if public executions were still allowed many would gather at Tyburn to watch those responsible breath their last. However, there is a problemette here. There is another group of people responsible and this is a huge one: all those people who exploited cheap money by loading up with chronic debt, which they now find they cannot sustain by further borrowing. We are all complicit, to a degree in what has happened and, I'd guess, will have to return to a much more sober and cautious way of spending from hereon. If you need a mortgage, you might even have to spend an awkward hour or so in the bank manager's office, as my generation had to back in the 1960s and 70s.

Explaining the Banking Crisis

2008-10-09T07:57:00.002Z

The Collapse of Capitalism? The World Banking Crisis Examined

‘Greed is good. Greed is right, greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed in all its forms: greed for life, for money, for love for knowledge, has marked the upward surge of mankind.’ Gordon Gekko, Wall St 1987.

‘Crisis, what crisis? Enough kerfuffle, it’s just a slowdown.’ Bill Emmot (former editor Economist), Guardian, 12th August, 2008

‘No need to worry, this crisis will probably turn out to be another storm in a tea-cup’ Anatole Kaletsky, The Times, 6th September 2007[and many similar statements since…]

Slow Realisation
It took a while-well over a year- for the world to wake up to the fact that the crisis was indeed a serious one and that it had to get much worse before it would get better. Kaletsky, for example, wrote, ‘a US economic recovery is now assured’ on 8th September 2008. Since then even he has realised this is the worst crisis since the Great Depression. For most of us these developments have been ‘noises off’, something happening to a much envied and much disliked group ‘fat cats’. However, the repercussions of plummeting shares, bankruptcies and non available credit will hit everyone soon enough in the form of unemployment and recession.

Sources of the Crisis

1. Eighties Reagan-Thatcher Economics
During this decade a reaction set against what was seen as the ‘over-regulation’ of the left-leaning seventies: union power was confronted and reduced; state owned operations were privatised; prices and incomes policies abandoned; upper tax rates slashed. More crucially, for the present crisis, the financial system was progressively deregulated. All this was reinforced by the fall of the USSR which seemed signal that ‘capitalism’ had won all the arguments. All over the world countries began to open up their economies to liberal capitalism: the new technology made globalization possible.

2. Big Bang 1986: this removed the distinction between stockjobbers, who were intermediaries when any stock was sold between stockbrokers, the professional financier who buys and sells on behalf of investors. It also made redundant the system whereby shares were traded via ‘open outcry’ through moving most trading to electronic processes. These changes had a dramatic effect making London the centre of world finance and helping to boost enormously the volume of world financial trade. Financial flows grew exponentially now that constraints had been loosened or scrapped; as in the 1920s debt levels grew to astonishing levels.

3. Abundance of Credit: From the early nineties investors, from Europe and especially Asia, believed a good return on their money could be gained by buying shares and securities from US banks. This meant that these banks had huge amounts of cash to lend out as capital to earn them even more money. Americans wishing to fulfil their dreams of owning their own homes constituted a large part of those seeking to take advantage of this glut of money.

Such availability of funding led to a price rise in housing and it was commonplace for homebuyers to exceed what they could afford in the knowledge that prices were soaring and that they could refinance their mortgages on more favourable terms once the discount period had expired. While the bubble of confidence lasted it seemed impossible for investment in the property market to be a poor judgment. These were golden days for builders, estate agents and property financiers.

4. Prices Ease Down and Interest Rates up: Homeowners increased from 65% to 70% of the whole and house prices more than doubled 1997-2004. Many remortgaged their refinanced properties to generate funds for consumer spending; something similar was happening in the UK as well. However, by 2005-6, when it became evident that house prices were falling and interest rates edging up; refinancing became problematic.

Notwithstanding, these developments, confidence in property was such, even at that date, that builders overestimated demand and produced surplus stock, which in turn led to reductions in values. This meant that many homeowners, overextended financially on adjustable mortgages, were prevented, through loss of equity, from refinancing, as before, when the higher rate kicked in. The result was a rising number of defaults. But worse, much worse was in store.

5. Subprime Loans: this was the practice of giving mortgage loans to bad risk customers. In some cases they had poor credit histories, insufficient deposits and poor or no employment. Some have been dubbed ‘ninja’ loans for which ‘no income, no job no assets’ were required. Companies often used ‘teaser’ rates-often 4% or even less- to acquire the business which then leapt up several points or doubled after a year or so. This often caused payment failure and subsequent repossession. It was adduced by some critics that banks and loan company staff were encouraged to sell to such risky customers because they were keen to gain the commission paid on each mortgage contract signed.

Many such sales went through in 2005-6 until by 2007 the value of such mortgages was $1.3 trillion, 20% of the whole. In March 2008, 11% of homeowners had zero or negative equity: their homes were worth less than their mortgage. By the middle of 2008 a quarter of such mortgages were not being repaid. In the first quarter of 2007 there were 239,770 foreclosures; by the fourth quarter 527,740 and by the second quarter of 2008, 739, 714, more than double the figure in just over a year.

6. Securitization: This innovation also proved toxic in that financiers devised a system whereby rights to mortgage repayments(a bit like IOUs) could be sold on to investors as ‘asset (or mortgage) backed securities’(MBS) or, a more complex formulation, ‘collateralised debt obligations’ (CDOs). These new financial products were often so complex, few could understand them, but in the atmosphere of the time, they were bought up by investors convinced they would reap a good reward. Those selling the products were, like the mortgage vendors, intent on maximizing their cut: their end of year bonuses.

Consequently these products, cleverly designed so that the ‘dodgy’ mortgages were wrapped up together with sound ones, were accorded good credit ratings and were sold far and wide to investors overseas. ‘Derivatives’ are complex products whereby a buyer agrees a priced at which something can be bought back in the future. Those embodying mortgage debts were often so complicated few could disentangle the ‘toxic’ elements of the product.

These products were often bought up by Structured Investment Vehicles (SIVs). An SIV is like a bank in that it borrows money at the standard rate from other banks and uses it to buy mortgage backed securities (MBSs), thus providing funds for mortgages, credit cards and student loans. The SIV would typically earn 0.25% more on these purchased bonds than it would pay on the money originally borrowed from other banks, thus accruing profit.
In consequence the ‘subprime’ crisis in USA was exported all over the world, especially, perhaps to the UK, where we have similar attitudes to home ownership and the centre of world securities trading: the City of London.

7. Inaccurate Credit Ratings: CDOs and MBS securities were given high investment grade ratings by the relevant agencies, thus fuelling the housing boom and encouraging the viral spread of the crisis. The US Securities and Exchange Commission, in June 2008 resolved to assess the rules governing such ratings.

8. Mortgage Fraud: this phenomenon, misrepresentation of mortgage information, hugely increased, by over 1000% 1997-2005.

9. Underwriting of high-risk Mortgages: Underwriters are the people who assess the risk of loans for banks and establish the criteria of lending, regarding the ability of the borrower to repay the loan. In 2007 40% of all loans were underwritten automatically via an electronic process. A process which took up to a week was reduced to a mere 30 seconds. Many point the main finger of blame at the underwriters who did not do their jobs properly.

10. Government Policies: critics claim the regulatory machinery is outdated and helped cause the crisis. There is much debate and accusations are being made regarding who is culpable, including the following candidates:

i) Repeal of the Glass-Steagal Act in 1999. This enabled banks like Citibank to operate outside conventional banking activities like taking deposits etc.; the most important consequence was that they were able to set up SIVs and buy the dodgy MBS and CDO securities.
ii) US Dept Housing and Urban Development Mortgage Policies assisted the issue of risky loans, it is alleged. In 1995 Fannie May and Freddy Mac began to receive housing credit for purchase of loans by low income borrowers.
………………………………………………………………………
Explainer: Fanny Mae and Freddy Mac: what are they?
‘Fannie Mae was founded as a government agency in 1938 as part of Roosevelt's attempt via the New Deal to provide liquidity to the mortgage market. For the next thirty years, Fannie Mae held a virtual monopoly on the secondary mortgage market in the United States.
In 1968, to remove the activity of Fannie Mae from the annual balance sheet of the federal budget, it was converted into a private corporation. Fannie Mae ceased to be the guarantor of government-issued mortgages, and that responsibility was transferred to the new Government National Mortgage Association (Ginnie Mae). Freddy Mac was invented in 1970 as a further vehicle to assist the function of Fannie Mae.
In 1995, Fannie Mae began receiving affordable housing credit for buying subprime securities. In 1999, the Clinton administration and Fannie Mae shareholders encouraged the lender to increase the number of mortgage loans offered to those of low and moderate income, both to improve rates of home ownership among those groups and to increase profits.’
How do they operate?
They buy up mortgages from banks, building societies and the like. It then repackages them by ‘pooling’ the accounts and sells them on as ‘Mortgage Backed Securities’ on the ‘secondary mortgage market’. But these huge national institutions provide a guarantee that the loans will be paid whatever the borrowers’ circumstances. So they provide both a guarantee that mortgages will be paid and, with the money they pay to banks, a hugely increased liquidity with which they can offer yet more loans.
Critics of the two institutions pointed out how they received financial support from government and then repaid in the coin of political contributions. In April 2006 Freddy Mac was fined $3.8m for making illegal campaign contributions with much of them going to members of the House Committee on Financial Services, which has some responsibility for the mortgage providing bodies.
…………………………………………………………………………

Progress of the Crisis

1. Stock Market falls: these had been in progress since July 2007 when the Dow Jones Index had stood at a record high of 14,000 by August the decline had begun and it continued throughout 2008, with builders and mortgage lenders suffering the most. All over the world investors withdrew from mortgage bonds and invest in ‘safe havens’.

2. Investment Banks: In March 2008 investment bank Bear Sterns, in desperate trouble, was the object of a bale-out, assisted by the Federal Bank. The rescue attempt failed and the bank, founded in 1923, bit the dus when it was taken over by JP Morgan. The Guardian reported:
In London, leading City figures said the scale of the crisis was virtually unprecedented: "It does scare me," said veteran trader Terry Smith, chief executive of specialist inter-bank broker Tullett Prebon.
"I have been working in finance in the City and worldwide for 34 years and I have never seen anything like this," Smith told BBC Radio 4's Today programme.
"I don't think anybody alive has seen events of this seriousness and magnitude affecting the financial markets."

3. Fannie Mae and Freddy Mac Nationalized, 8th September 2008
Fannie Mae and Freddy Mac guarantee half of all US mortgages, worth $5.3 trillion so their role is crucial to the US economy. Given their remit to assist lower income house purchasers, it was unsurprising that they should have been in the firing line as the subprime housing crisis developed. When it did, shares in the two institutions plummeted and rumours spread that they were no longer able to provide guarantees as foreclosures had reached such a crisis point.
On 7th September the Federal government stepped in to take over -i.e. nationalised- the ailing giants. George Bush explained their risk of failure was ‘unacceptable’ to the overall economy, affecting home loans car loans and consumer credit, not to mention business finance. The crisis was now exposed to the whole world and the battle by politicians to pre-empt panic and construct solutions had begun.

4. Related Failures: Shares in other investment banks, especially those known to have invested in the toxic mortgage securities, now tumbled. Investment banks were vulnerable as they do not carry large cash deposits but are dependent on big inflows of credit. Once banks stopped lending to each other this made their position desperate. On September 15th Merril Lynch’s shares, $97 in January 2007 were bought at $29 each in a takeover by the bank of America. Four days earlier shares had been only $17. 16th September AIG, the huge insurance concern was bailed out to the tune of $85bn. On 22nd September The Guardian reported:
‘The concept of a Wall Street investment bank was in its death throes today as Morgan Stanley and Goldman Sachs succumbed to a collapse in confidence in their financial stability by converting themselves into lower risk, tightly regulated commercial banks.
Beset by plunging share prices and alarmed by the demise of competitors, the two remaining standalone Wall Street banks accepted licences from the Federal Reserve which allow them to take deposits from the public backed by federal government guarantees.’

5. 25 September, the biggest bank failure yet: Washington Mutual closed by authorities. No government however, could allow a really big bank to fail as the knock-on effects could bring the whole system down in ruins.

6. Paulsen Plan: Within a few weeks the phenomenon of investment banks, vehicle for huge incomes for their board members and CEOs, had been virtually wiped out. The world’s financial system had become frozen, with banks unwilling to lend to each other in case they also began to slide. This was the situation in which US Treasury secretary, Hank Paulsen, former CEO Merril Lynch and someone personally worth £700m, announced his hastily constructed rescue plan for the US economy, an injection of a $700bn bail-out to purchase bad debts from banks.

7. 29th September: House of Representatives throws out the Paulsen plan, at the direction of their constituents who vocally point out in media interviews and elsewhere that these Wall St ‘fat cat’ bankers had only themselves to blame for the crisis and that the little guy on Main St had traditionally been allowed to go bust, or become unemployed in the case of millions of former Rust Belt industries. Around the world shares go into free-fall as an air of panic takes hold.
Ist October: Revised plan is passed by Senate
3rd October: House of Representatives also passes the revised deal.

The Crisis According to the UK

Britain had been keen to ape the deregulation of markets pioneered in the USA, with Gordon Brown as cheerleader for New Labour. Financial services flourished; the City now contributes about 10% of the economy. As important banking is an ‘enabling’ function, allowing business to function. Without credit, business is like a body without oxygen. Debt increased within a decade to an average of 180% of disposable income, the highest proportion of any member of the G7: £1.44 trillion (equals million millions).

12th September 2007: Northern Rock sought emergency help from Bank of England causing a run on their reserves. Government steps in to guarantee all deposits in the bank.

17th February 2008: Northern Rock nationalised.

21st April: Bank of England announces it will swap risky mortgages for up to £50bn government debt or ‘liquidity scheme’.

17th September: Lloyds-TSB buys HBOS, the owner of the Halifax, for £12bn. Gordon Brown has encouraged the sale.

28th September: Bradford and Bingley nationalised.

The days of cheap credit are now over: mortgages issued have shrunk to a fraction of a year ago and formerly extravagant consumers have opted to tighten their belts. The number of mortgage products on the ,market has reduced from 30,000 in 2007 to 6300 now. Shopping has ceased to be a national obsession as more discriminating practices have begun to be adopted. Even Prince Philip has been reported as having had a 51 year old pair of trousers restyled in Saville Row. Houses are now only being sold because of debts, divorce and death; playing the market is over for at least 3-4 years. A deep recession, comparable with the 1930s seems likely to affect UK for several years.

The crisis has also affected Ireland, Iceland, Germany, France, Greece, Russia, China, virtually every developed economy. When Ireland and Germany and Greece offered blanket guarantees to savers and account holders, there was some unease with the EU lest money leached across borders to such safe havens, thus disadvantaging countries like UK which has held back from such general measures, though may now be forced to follow suit.

So far,[but see below] it would seem, politicians have floundered for a measured response. Blaming bankers for incompetence might be understandable and accurate but to revive, the economy needs a functioning banking system and such resentment is irrelevant, though clearly politically significant. Something like a restructuring of the economic system seems necessary as in 1945 at Bretton Woods. Will Hutton, in the Observer, 5th October sums the situation up as follows:

‘A 30-year experiment has come to an end. The world of go-getting investment banks has gone forever. The danger is that we go from feast to famine; debt remains a vital element in any economy, and if we too suddenly try to live without it we will crush ourselves economically. What we are witnessing is a system failure that requires a systemic response – the creation of a new system that sponsors a fairer, more productive capitalism in its place, while maintaining high flows of credit and debt.’

Postscript: On 8th October, the British government announced a £500bn bail-out of banks in the firing line aiming to improve liquidity and confidence so that banks can start lending again. Strings were attached however and it seems clear the era of big bonuses has passed.
Bill Jones October 2008.
http://skipper59.blogspot.com/

Are UK Political Parties Dying?

2007-11-10T18:56:00.000Z

[Plus Two Approaches which Might Save Them]

This is a question frequently asked by political scientists and if the answer is yes, our democracy has a mega crisis brewing sometime soon in the future.On 30th September, 2007, Simon Jenkins suggested in his Sunday Times article that ‘Political Parties are Dying’. Let’s look first at the case that parties are already in ‘intensive care’:

Ideology: some time ago now, Otto Kircheimer- a German writing in the USA- suggested that those mass ideological movements called political parties had ceased to relate all that much to ideology per se. Instead, they had become ‘catch-all’ parties: assemblers of voter coalitions, gathering in a pocket of support here, wooing a block of interest groups there. If we apply this model to the UK New Labour might easily be deemed a neat enough fit. Having realized its ideology had been rejected by voters four times in succession, it decided, in effect, to abandon it. But without a saleable message to market, what could it do? Answer, borrow another. New Labour acquired the economic programme of the Tories: Thatcherism, the unpleasant but apparently effective remedy for an ailing economy which focused on tight control of interest rates, opposition to trade union curbs on economic activity and an emphasis on ‘flexible’ employment policies which enabled employers to hire and fire without too much restraint.

To this lurch to the right Brown and Blair, advised by the likes of Mandelson and Gould, added: a line on law and order which openly competed for toughness with the Conservatives; a promise to follow Conservative spending plans for two years after winning power; and an approach to public services which seemed to accept the Thatcherite premise of ‘Public sector bad, private sector good’. Many traditional Labour party members thought Blair was advancing the interests of the privileged class from whence he sprang, rather than the disadvantaged one Labour had always championed. When he came to power, Gordon Brown, having posed as an ‘Old Labour’ supporter, seemed to take the process even further, with his embrace of rightwing policies and gestures like inviting Margaret Thatcher to Downing St. When Cameron turned the tables on him by advancing initiatives on inheritance tax and on the lightly taxed ‘non domiciles’, Brown promptly stole these policies. With this bare faced policy larceny, ‘Political cross dressing’ had reached a kind of apotheosis. Moreover, with Cameron seeking to haul his party into that electorally strategic centre ground, the current political spectrum is as narrow as I can remember. Polly Toynbee, writing in The Guardian 2nd November 2007 thinks the positioning for the centre ground masks a reality:

At heart, of course, Labour and Tories are viscerally separate tribes, deep-dyed by their own histories, born and bred in opposite intellectual and moral universes; government under either would differ much more than they pretend. Yet in public they converge, swimming in a shoal, afraid lest any difference might alienate anyone. So they nibble each other's tails on small policies, but stick together on everything large.

Participation: to function properly a representative democracy needs a participating citizenry to staff the parties and vote in elections.

Parties: Simon Jenkins, in The Sunday Times, 30th September 2007, sums this up as follows:
The collapse of parties in Britain has been spectacular. In the 1950s more than 4m people claimed some affiliation. Today the figure is 0.5m and falling, having dropped 70% in the past 25 years alone. Even those asserting some political activity amount to a mere 2% of adults, the lowest in any comparable democracy.
Voting Turnout: most people are now aware that the decline in party membership and activism is merely a symptom of a wider malaise. In the 1950 election turnout was 80%; during the seventies it averaged 75% but fell to 71% in 1997 and plummeted disastrously to 59% in 2001, recovering only slightly to 62% in 2005.
Grass Roots Membership: Jenkins lambasts British government for being so centralized, thus stifling the opportunity for parties to build up the kind of vibrant grass roots membership enjoyed in pother European countries. He points out that :
In France there is roughly one elected official for every 100 voters and in Germany one for every 250. In these countries local mayors and councillors are known by name and often in person to the overwhelming majority of voters. In Britain the figure is one elected person for every 2,600 voters and few can name any local community leader, let alone one to whom they might turn in trouble. The smallest unit of democratic administration in France, the commune, covers an average of 1,500 people, in Germany 5,000 and America 7,000. The equivalent figure in Britain is 118,000 and the Brown government wants that size to increase under “unitary” authorities, thus removing government still further from voters and consumers. It is no surprise that ever fewer people want to be patronised in this way.
Arguably British government is far too centralized and less competent for this. Critics argue that London based civil servants, party apparatchiks and their advisers are not able to cater for the needs of specific groups with anything like efficiency.
Funding of Parties: it follows that with smaller memberships parties have fallen on hard times financially. Modern politics is highly sophisticated with private polls, focus groups and scores of researchers to staff election efforts and keep the machine ready for when the big tests arrive. It costs around £20m p.a. just to pay for a party to survive, let alone finance election campaigns. So where does the money come from? And where can it come from in the future?
The Conservatives have traditionally drawn their funds from business and Labour from the unions. Membership subscriptions constitute just 6% of Conservative income; 13% of Labour’s. Corporate business donations used to infuriate Labour as ‘their’ party, the Tories, could always be relied on to outspend Labour when it mattered. Unions also delivered millions to ‘their’ Labour party when it mattered, though at the politically damaging cost of appearing to dictate party policies; this more damaging during and the decade after the seventies, the high tide of union power in the Labour Party.
Labour attacked the ‘dodgy’ donations from dubious rich foreigners and, when in power, its Political Parties, Elections and Referendums Act, 2000, banned overseas donations plus limiting anonymous donations to £5000. However, Labour found that as its own membership declined it was forced, like the Tories, to resort to a few big donors, like Lord Sainsbury and his ilk. Before the 2005 election, Blair’s office arranged for rich donors to help fund the forthcoming election but changed the ‘gifts’ to ‘loans’- a loophole that would keep the donors anonymous but which opened up the hugely damaging ‘cash for peerages’ scandal and accompanying police inquiry.
Sir Hayden Phillips, a retired civil servant was asked to head an inquiry in 2007 into how party funding could be improved. He came up with a possible plan-a £50,000 cap on donations, reduced spending on general elections and increases in state funding. However Labour could not accept Tory insistence that union contributions should be limited to this extent as this would have denied them the millions they have traditionally received from the unions. He gave up in despair at the end of October. So this way out of the dilemma has been foreclosed for the time being.
Charismatic Leaders: shorn of their distinctive ideologies, their membership and, to a degree, their income, parties seemed to invest in charismatic leaders. In a 24 hour news environment a figurehead was needed to attract attention and deliver messages crafted to reach the requisite groups of voters. Thatcher was a one –off but her example encouraged the emergence of Tony Blair with his voter friendly media brilliance. Cameron, without a doubt, sought to emulate such PR virtuosity and the party gratefully welcomed him- though having absorbed some of the focus group led changes, some-Simon Heffer in the Mail, Norman Tebbitt- protested their discontent. This development tends to support the ‘catch-all’ party thesis- part of the stripped down machinery designed to assemble the coalitions of voters needed to win elections- though Gordon Brown surely represents a return to a more traditional kind of politician.
Case that Parties still Function Democratically and Situation Remediable:
Ideology: it could be pointed out that Labour had not choice but to tack towards the centre and appeal to middle class voters as so many of its working class constituency has disappeared: from 75% of the population in 1911 to less than 40% at the end of the millennium. Moreover, it can be argued that the fact of globalization and the enthronement of market economics has made all parties conform to similar economic policies.
Nevertheless, Labour did pursue a distinct social democratic agenda, perhaps not in the generation of wealth, but in its distribution to the poorer strata- something which Brown assiduously sought to achieve in successive budgets. So public services were funded where, had the Tories been in power, they would not have been. Labour also implemented a radical programme of constitutional reform, in the form of devolution and ending hereditary peers in the House of Lords and introducing elected mayors; few would have expected the Conservatives to have done such things.
Representational: Parties still provide the crucial connection with voters and act as the nexus between them. Even the critical Jenkins allows that:
“Parties remain the golden thread that links voters to their governors both at and between elections. Parties embody the democratic mandate. They can discipline representatives and leaders who stray from what was pledged to the public. They hold MPs’ jobs in their hands.”
He goes on to point out that in the USA one in ten Americans gave money for a presidential candidate and $206 was raised by gifts under $200.
Funding: the parties are predictably wrangling over money, as they always have, but it is still very possible a compromise will be reached. There is also the possibility that state funding might fill the gap. Arguments over this are complex- and Jenkins’ trenchant views are recorded below- but other countries as in Scandinavia and Germany, think democracy is sufficiently important to the common good, to assist it financially.
Conclusion: Jenkins’ diagnosis that ‘the political parties are dying’ has a certain amount of truth in it- the parties are in a bad way and democracy has been healthier- but it is basically an exaggeration. The parties still function- there is no shortage of candidates to sit in the Commons- the debates in the chamber are heated enough to be called vibrant and the system, though ailing, still has popular legitimacy.
Reviving Democracy
Decentralize: local government has been revived to an extent by New Labour- e.g. elected mayors and improved consultation- but some structural reform is needed to bring voters closer to representatives, to devolve services to local level as in other countries like Sweden and France.
Refuse State Aid for Parties: Jenkins argues powerfully that ‘parties need to revive themselves’ and that denying them the easy answer of state aid is one way of doing this. Tony Blair decided to have a membership drive in Sedgefield he bumped up membership to 2000. It is possible but parties have to be made to renew themselves. As Jenkins concludes:
‘Nothing would do more to restore democracy than forcing parties to find more members to give them money and publicly declare it. An active and empowered membership, warts and all, is essential if the British constitution is not to lapse into oligarchy. Party finances will be restored only when parties persuade enough voters that they are worth preserving. Otherwise they will become mere offshoots of the state.’
Reform the Voting System: Polly Toynbee in The Guardian, 2nd November 2007, makes a passionate case for proportional representation(PR). A study by the Electoral Reform Society argued that, given the mountains of votes piled up in safe seats, only 8000 votes in marginal seats effectively decided elections. Given this reality parties refused to take any risks but all grapple for a slice of the centre ground, thus alienating people who might otherwise feel they are being represented.
Rather than targeting their millions on such a minuscule number Toynbee suggests a system in which every vote counts would encourage participation and democratic vibrancy. Yes, it would cause coalition government but at least they would be representative of what the nation believed and felt- they would be made via ‘public bargaining after an election instead of current pre-election merging by focus group’ Toynbee is not sanguine however about the chances of voting reform being delivered, despite nudges and hints that it might be on the agenda. It has to be said, however, that the introduction of PR in Scotland and Wales devolved elections, has not noticeably improved turn-out figures.
Bill Jones, November 2007.

Politics of Law and Order in UK

2007-11-10T18:49:00.001Z

‘A society should not be judged on how it treats its outstanding citizens but how it treats its criminals’ Fyodor Dostoyevsky

Polls show that concern with crime is close to the top of voter priorities and has remained so over the last two to three decades. This note takes a look at ‘crime waves’, causes of crime, penal policy and alternatives. It draws on material from my chapter 25 in Politics UK but includes more up to date material as well.

The ‘Crime Wave’: Virtually everyone believes crime is on the increase and that we live in the middle of a perpetual ‘crime wave’. Everyone too has ideas upon why criminals are formed and how they should be treated. We also look back to a ‘golden age’ when we could leave our doors unlocked at night and walk the streets at any time unmolested and without fear. In 1979 the number of serious recorded crimes was about 21/2 million; a decade later it was closer to 5 million when most people would have agreed a ‘crime wave’ was in progress.

Political Party Attitudes: Conservatives tended to blame the permissive sixties for the collapse of values, and behaviour leading to crime: respect for authority had been undermined by the ‘anything goes’ attitudes of that decade and so crime had rocketed. They pointed to the thirties, for comparisons when desperate social conditions had not resulted in increased crime rates. Labour tended to see crime as the consequence of hardship and poverty: if these were removed, they argued, criminals would have no need to commit crimes. Tories argued increased crime could be remedied by ever tougher penalties; Labour argued such reactions merely made the situation worse.

This analysis remained gridlocked in its respective certainties for several decades after the war but around the early nineties policies began to converge. The Conservatives admitted that economic depressions caused increased crime (see also Polly Toynbee’s article quoted below), while Labour, insisting, under its Home office spokesperson, one Tony Blair, that the ‘causes of crime’ should be robustly addressed, as well as its consequences. From here on in-now convinced there were no votes in the liberal approach- parties vied with each other as to which could be the toughest.

Measuring ‘Crime Waves’: criminologists point out that crime statistics are something of a mine-field:

i) More people now report burglaries because more people have home insurance and telephones.
ii) Many crimes are very trivial and may not even have been recorded until quite recently.
iii) Britain used to be much more violent in past centuries. EG Dunning’s work in 1987 calculated that the murder rate in the 13th century was seventeen times today’s rate. The idea of a bygone ‘golden age’ when we were a peaceful country is a myth, though there have been fluctuations of course.
iv) The huge increase in police manpower has enabled more crimes to be registered.
v) Media coverage of crime- often sensationalist- masks the fact that the chances of being mugged in our country are less than once every five centuries and the chances of injury from assault less than once every century. UK is safer than Germany, USA or Australia.

Clear up Rates: when crime rates were relatively low, say under 3 million a year serious crimes, the clear-up rate for them was 40%; not perfect but a tribute of sorts to a police force overstretched and weighed down by bureaucratic requirements. By 1999 the figure had slumped to 25%. Since then Labour has claimed some improvements but their lack of specificity suggests they are only marginal.

Fear of Crime: this is a major problem and I return to it below. When old people are frightened to go out at night and young people are regular targets for violent crime, the streets become even more the property of the criminals. Most people wrongly (see below) believe crime to be increasing and have little confidence in the police. Particularly afflicted are residents of inner city areas which suffer over twice as much from burglary as any other kind of area: much of crime involves working class people offending against their own.

Causes of Crime

Gap between rich and poor: countries with low gaps between rich and poor suffer less overall from crime- e.g. Japan, Denmark, Sweden- than countries with large gaps like UK and USA. People with very little look out on a world where people are judged often by how they look and what they have; if the road to success by conventional means proves too difficult, crime can be considered as an option.

More crimes on statute book: Blair’s governments placed many more offences on the books so offending is now easier to do as so many more things have been classed as crime. More material goods in the shops also act as incentives to crime.
Professor Mike Hough, of King's College London, was quoted recently in The Guardian:

"In Victorian and Edwardian times, in the 1920s and 30s, a far higher general level of violence was accepted. Now people report quite minor incidents that would have been ignored."

Young people face more challenges: most crimes are committed by young people aged 16-24 and this often gives rise to ‘generational’ disputes: older people blame the youngsters while the former vent their anger on their parents’ generation.
a) more are the product of broken homes and fragmented families
b) long term unemployment has taken away the hope which earlier generations came to expect as of right and reduced the number of ‘working’ role model males as heads of families.
c) When unemployed crime can assume an excitement and glamour which makes it attractive.

Growth of an underclass: partly as a result of the above factors a stratum of society has emerged comprising poverty stricken older people and younger ones dependent on benefits where the dividing line between legality and illegality is harder to distinguish and where a culture has emerged disdainful of the values underpinning a cohesive society.

Drugs and Crime: the Home Office calculates that two thirds of property crime is drugs related. A heroin addict has to raise some £15K annually to survive but seldom is in work so crime becomes the obvious route to finance the habit. Police seizures of drugs amount to a mere 20% of the total involved.

Anti-Social Behaviour: this causes a huge amount of resentment- vandalism, graffiti, casual violence, gangs of youths the worse for drink appearing to intimidate ordinary people. When beer is available in supermarkets at prices less than mineral water, it is scarcely surprising that so many young people misbehave- the older generation testify that alcohol was relatively much more expensive when they were teenagers. Having substantially relaxed opening hours moreover, has not contributed much of a restraining effect on drinkers to desist from their binges.

Polly Toynbee and the Economic Connection: Toynbee is often pilloried for holding stereotypical Guardian views but her research is always well founded:

‘Trends in Crime and their Interpretation, by the Home Office in 1988, plotted crime figures in the last century against the economic cycles, with graphs tracking crime against boom and bust. Its evidence is conclusive: in good times when per capita consumption rises with higher employment, property crime falls. When people have money their need is less great so burglary and theft trends drop. However, theft rises as soon as consumption falls when the economy dips and people on the margins fall out of work. But that is not the whole picture. Something else happens in good times. People have more money in their pockets, they go out more and their consumption of alcohol rises. The result? They hit each other more and personal violence figures rise. Exactly this is happening now with near full-employment and soaring drink consumption creating a rise in assaults, mainly young men hitting each other at night (mainly not very hard: only 14% visited a doctor afterwards).’(12/7/2002)

Responses to Crime

The Police: Billions of pounds have been spent on expending police numbers over past decades. During the eighties rightwing commentators lambasted the police for failing; Blair’s New Labour responded by piling in with even more funding to bring the number of police over 130,000. However, Robert Reiner, the leading LSE criminologist, argues that the ‘golden age of policing’ in the 40s and 50s was largely a myth. He believes crime was controlled by:

‘informal social controls, above all by the gradual inclusion of the whole population into common citizenship. However, the police took much of the credit… Much research evidence shows that policing had little effect on levels of offending’.
.
Reiner saw rocketing crime rates as the consequence of neo-liberalism, unemployment, inequality, poverty plus ‘an egoistic consumer culture and declining deference’.

Prison: to advocates of tough law and order approaches, prison is their chief instrument. Depriving someone of their liberty widely thought to be a major deterrent and, given the nature of other inmates prison is indeed a very punitive consequence of being convicted of a criminal offence. When crimes increase or when particular crimes receive publicity, there are calls for heavier sentences- especially from the zealots who attend Conservative Party conferences. However, prison is not regarded by many criminologists as effective in either deterring future transgressions or rehabilitating offenders so that they can ‘rejoin’ society. 60% of offenders re-offend within two years and it is clear young men who graduate from young offenders’ institutions to prison merely emerge as more hardened criminals.

On 23rd February 1993 The Observer published the story of ‘Dennis’ who began his ‘career’ in an approved school aged 12. It was here he imbibed the ‘criminal subculture’; by 15 he was arrested for stealing a car and went to a Detention Centre where ‘the kids were already seeing themselves as gangsters’. Inevitably he graduated to burglary criminal damage and car theft and soon was in Strangeways, doing time. After another stretch he married and worked for while but then drugs, marriage break up and loss of his job led him back into crime, this time armed robbery. His story, unusually, ends happily in that prison education led him into a different world where he discovered his real self and was able to leave the criminal worlds behind him to study law at Bristol University. But ‘Dennis’ is only one out of thousands who fail to haul themselves out of the trough of criminality and waste their lives rotting in prison.

Britain imprisons more extensively with custodial sentences than any other country in Europe and only USA and South Africa imprison more. In the eighties it was clear that a system designed to accommodate 40,000 was having to cram 55,000 two and three to a cell. During the nineties the Conservatives opted for more non custodial sentences but Michael Howard broke with this trend with his ‘prison works’ policy, which saw prison populations grow relentlessly toward 70,000 and above. Private prisons took up some of the slack once riots in the 80s highlighted appalling conditions but at the present time there are 81,000 inmates and no sign of any let up. Writing in The Guardian, the doyen of columnists Simon Jenkins argues in his article, ‘Britain’s prisons reek of a wretchedly backward nation’:

‘The chief concern of the public, always cited by politicians, is violent or sexual offending. But there are only 18,000 such convicts in prison. Meanwhile, the Home Office reports that 55% of the jail population is related in whole or part to the failure of the 1971 Misuse of Drugs Act. Reforming this act along lines familiar elsewhere in Europe holds the key to reducing the prison population, yet ministers are terrified of "the press". Nor are the Tories any better. Their crime spokesman, David Davis, always refers to crime as "violent" and seems ashamed that Blair locks up 30% more criminals than did the Tories.
Young people whose discipline in other countries is a prime charge on schools, churches, sports clubs and communal authority, are in Britain left to the police. Yet the police answer not to any community, but to Whitehall statistical targets and the ministerial demand for good headlines. Crime in Britain has thus shifted conceptually from being an issue of social reform to being one of repression, and the figures show it’ .20/6/07.
Critics of the government’s penal policy do not just attack it on the grounds of its inhumanity, lack of rehabilitation and its sheer inefficiency, they also attack rising numbers when crime is in fact in decline. This is an extraordinarily difficult message to get across to voters, but serious crime has actually fallen by 40% since 1997. As Polly Toynbee argues, maybe this has something to do with the media.
Media and Crime
Polly Toynbee made a swingeing attack on the media’ coverage of crime in a recent article: 23rd October 2007. Pointing out at crime has ‘plunged’ by more than 40% over the last decade she surveys how the media insist on ignoring the good news and focusing only on the scary crimes for which the public has an obsessive horrified fascination . The most recent figures revealed a 7% decrease with serious violence down by 14%, lesser violence 12% and sex offences 7%. These figures are based, official police recorded figures but the British Crime Survey, published at the same time and based on interviews with 40,000 people, suggests crime is stable- neither up nor down. Yet these figures confirm the 40% fall, with a 59% decline in burglary, 61% vehicle theft and 45% personal theft.
Yet we Brits are more frightened of crime than anywhere in the west: 83% think crime is actually rising.
Ipsos Mori's Ben Page has no compunction in saying: "We're obsessed with crime and the media is to blame." He finds 57% say they think crime is rising because they see it on television, 48% because they read it in newspapers.
Fear of crime, stoked up by the media explains why we spend more on crime than any other nation in the world. This makes it prime target for political parties, seeking to win advantage by amplifying scares over crime- David Cameron, of course, has recently spoken of a ‘broken society’. With both main parties likely to be locked in a ‘boat race’ of poll ratings up to the next election, we can expect only more of the same.

Fat Cats, Private Equity and the Morality of the Super Rich

2007-10-24T18:05:00.002Z

Those who read my blog will know I have a special beef about the super-rich. This doesn’t make me unusual though it does lay me, and fellow objectors open to the (frequently leveled) charge of the ‘politics of envy’. Given human nature, some of this charge is justified but the purpose of this-I admit very personal- note is to show that, even allowing for such factors, the infamous quotation by Peter Mandelson in 1997 that ‘New Labour is intensely relaxed about people becoming filthy rich’ has unleashed a situation which has become harming to society- not just to the poor. I also discuss the views of a number of authors on the subject of modern materialism.

Are Critics Missing the Point?
This question was posed by one Peter Newhouse, a self styled ‘independent consultant on pay and management’ in The Guardian, 31st August, 2007. He is all in favour of publishing the extent of the fat cats’ fatness:

The disclosure of executive directors' pay is good for society. Rather than being a cause for hand-wringing and envy, the Guardian pay survey's revelations of what our best managers can earn from running the UK's biggest listed companies should encourage others to follow in their footsteps. The survey found that directors' pay at the 100 largest such firms has risen by 37%, with the average chief executive receiving £2.9m, including salary, benefits, bonuses and gains from share incentive schemes. These figures send an important message to able and aspirational young people.

Fair enough, you might think (and more from him later), but does this short paragraph tell us anything like the whole story? I think the existence of a new class of super-rich in the USA which has been exported to the UK, Europe and many other areas of the globalised world, represents a worrying problem, both morally, economically and politically.

The Extent of the problem

1. Share of world’s income: the richest 20% of the world earns 83% of its income. In descending order the other quintiles earn, 11.7%, 2.3%, 1.9% and a shaming 1.4%
2. Earnings of Top Directors: Simon Jenkins has written about this and those familiar with this classy columnist, will know he is no lefty bleeding heart, but he is astonished at the brass neck of company bosses:

The heads of Britain’s 100 biggest companies have had 37%, won 28% more last year, 16% the year before and 13% and 23% in the two preceding years, yielding an average pay of £2.8m a head or 20 times the rise in price inflation. Under Labour, these company directors have stretched their remuneration to almost 100 times average earnings, a gap unprecedented since the rise of modern taxation.'

3. Comparison with Average Workers’ Earnings: In the UK bosses earn on average 100 times the pay of the average worker in the companies they run. In the case of mining company Xstrata, the multiple is 544. In the USA there examples of the ratio being 1000:1.

4. Greeediness of Super-rich: some mega rich people can be amazingly generous but in the UK they donate only 1% of their incomes to charity; far less than in the USA. Lord Black and his wife Barbara Amiel, have been exposed as exploiters of their company where they fraudulently denied shareholders some £40m. Their purpose? To live a super extravagant lifestyle with private jets and birthday parties costing £100,000.

5. The Wealth Gap: Economic journalist Frank Rich, has written a book entitled ‘Richistan’ in which he argues that the super-rich have now reached a level whereby they virtually live in their own country, with low taxes, armies of servants, private planes and more money than they can possibly spend in a lifetime. Whilst median incomes have fallen in the USA for four years before 2005, the rich got richer by double digits. The richest 1% now own 33% of all the wealth and this is greater than that owned by the poorest 90%. The rich now sometimes pay a top specialist to give up normal practice and serve merely a group of mega rich families.

6. Millions of US Squillionaires: in 1995 there were 3.77m people classed a ‘millionaires’; in 1998 there were 5.43; and in 2004 9.05. The figures for those worth $5m were, respectively .55, .86 and 1.44; $10m- .23, .30, .53 and $25m- .05, .06 and .11. By 2004 the richest 1% of Americans were earning $1.3 trillion a year, greater than the total national incomes of France, Italy or Canada. In 1985 there were only 13 billionaires- by 2006 there were 400. The expansion in the States is being mirrored in Europe. The number of millionaires in the UK is expected to quadruple by 2020 from 376,000 to 1.7 million. London home prices frequently top £20m. :
‘British concierge services are thriving, as they arrange for rich clients to rent their own tropical islands, charter 250 foot yachts and host birthday parties in Cyprus.’(p.12)

7. Setting salaries: So how come they receive such amazing salaries?
After noting and dismissing various specious defences of such stupendous payments, Simon Jenkins quotes JK Galbraith who said such salaries:

'[were] nothing to do with the marketplace but were a heart-warming gift from executives and their friends to each other, a gift that had grown so large as to 'verge on larceny'.

8. High Gini Coefficents: this index charts the degree of inequality in society. Countries with high ratios tend to have low economic growth when they are poor overall and high social costs too. Ratios of about 25, typical of Western Europe are held to be about right for social harmony and reasonable growth but if as high as 40 as in China and the USA, severe problems of social cohesion and crime can result.

9. Private equity companies
These swashbuckling new players buy out public companies, which are subject to some common regulation and then use their new private status to inflict fairly blatant forms of exploitation. The device is to take the company into liquidation, maybe for only 24 hours, to shed liabilities; pensioners thus robbed become a call on tax funded government compensation schemes. On average 20% of jobs are cut after such a takeover; Toynbee observes:
Mega money is made by the dealmakers but it is a weakened company which limps back to the market.' and concludes
'Never mind the hard-won laws devoted to making public companies responsible: private equity is a return to primitive, unregulated capitalism'

But it is the tax breaks such companies exploit which cause the most anger:

Current tax breaks let private investors charge the interest from huge borrowings against profits. On capital gains they are not charged the usual 40% that applies to everyone else, but after owning the company for just two years their rate is cut to 10%. The two-year rule introduced in 2004, designed to help new ventures, puts ordinary public companies at a disadvantage , having to wait 10 years to pay so little.

It is this anomaly which led Nicholas Ferguson, chairman of SVG Capital private equity to remark recently that executives in his line of work 'pay less tax than a cleaning lady', a remark which won a headline for its author in The Financial Times. One has to applaud his honesty but when one of the robbers themselves complains his gang are receiving too much loot, there must be something seriously wrong.

10. Ghettos for Rich and Poor
Joseph Rowntree Foundation on Economic Segregation
records that the gap between richest and poorest is wider than at any time for 40 years and that: "Poor, rich and average households became less and less likely to live next door to one another between 1970 and 2000," It seems the greatest polarity is occurring in the South-east where the richest and poorest are increasingly living in separate parts of the capital with the former on the outskirts ; 'average' families on middle incomes are being priced out of the region by spiralling house prices and are either moving elsewhere or becoming poor

Professor Danny Dorling, from Sheffield University, leader of the study which analysed census data since the 1970s, commented that increased wealth had not really made the newly rich any happier:

"Rich people in London don't think that they are rich because they don't mix with poor people. That is one of the main differences with the 1970s. In the 1970s and the 1980s there were a few wealthy people almost everywhere. Now, apart from a small number in Cheshire and North Yorkshire, almost all the very rich are in the South East.

Sadly neither Blair nor Brown can claim the last decade, apart from the alleviating the incomes of the very poor has produced much progress towards equality. In February this year a Sunday Telegraph, poll revealed 73 per cent of voters thought City bonuses had become "excessive and something should be done about them"; meanwhile 69 per cent believed the gap between the highest earners and average earners is now excessive.

Analysing the Problem (or trying to)

Happiness and Money: Oliver James a journalist and psychologist has written Affluenza, a study of our relationship with money. He argues that:

‘People who favour certain key values- money, possessions, physical and social appearances, and fame- are at greater risk of emotional distress…. The reasons these values are so bad for our well-being were best summed up by an American psychologist writing in the 1950s and 60s. He presented a stark choice that the American variety of capitalism offered as ‘To Have or To Be’.

He feels that such obsessions amount to a condition which to which he ascribes a medical name: the virus of ‘Affluenza’:

‘In Having mode, people are as much in the grip of external forces as the hypnotized or the compulsively obsessed.’ Fromm saw them as people ‘dependent on success, sale-ability, the approval of others.’ James believes this condition is the result of decades of false needs inculcated by the economic system. As William Leith writes of the book in his review:

‘Affluenza, as defined by James, is clearly recognisable as our way of life. It spreads because it feeds on itself; when you try to make yourself feel better by buying a car, or bulking up in the gym, or spraying on a fake tan, or having a facelift, you actually make yourself feel worse, which makes you want to buy more things. As James points out, the virus has spread to television - "most programmes," he says, "are now barely concealed advertisements for classes of product" - and education. James sees modern education as "little better than a systematic method for spreading the virus"’.

Richard Layard’s Thesis on Happiness: Economist Layard, has written a book on happiness. This he describes as ‘new science’ with techniques now available to measure happiness quantitatively: the book contains a number of fascinating diagrams and graphs. In it he points out that huge improvements in material well being have not resulted in anything like commensurate improvements in happiness. We have become richer and richer yet also more and more unhappy.
Economies grow, GDP swells, but once above abject poverty, it makes no difference to citizens' well-being. What is all this extra money for if it is now proved beyond doubt not to deliver greater happiness, nationally or individually? Happiness has not risen in western nations in the last 50 years, despite massive increases in wealth.
Layard’s study concludes that, as long as one has the basic requirements of living- food, shelter and the like- the chances of a fortune making us any happier are by no means automatic. £25K a year is the basic requirement suggests Layard; after that, it’s up to you to achieve happiness. Layard points out that richer people get angry at their salaries mostly because they are less than others they know. Polly Toynbee, in The Guardian summarizes some key points thus:
In pursuit of money, working ever harder, we are, says Layard, on a "hedonic treadmill" - a phrase that resonates with most of us. Right across Europe people report more stress, harder work, greater fear of insecurity, chasing elusive gains. The seven key factors now scientifically established to affect happiness most are: mental health, satisfying and secure work, a secure and loving private life, a safe community, freedom and moral values.
Oliver James, in his book, cites a billionaire banker, Sam, with a private plane and houses all over the world but who is seriously neurotic with severe addictions, especially to youngish sexual partners. The taxi driving immigrant, Chet, James also cites has a fraction of this wealth yet works regularly and hard, is faithful to his wife and full of pleasure with the world. At least Bill Gates and Warren Buffet – the two richest men in the world- have solved the problem of what to do with their money by giving it away to charity. Few follow their example.
Will They all Move Overseas ?
Now to return to Mr Newhouse who warns us that these talented people earning obscene sums fail to continue to get them ‘they will leave listed UK plc bereft of talent’. I just wonder if that’s true. Not according to at least one economic expert cited by Larry Elliot in The Guardian:

Professor John Van Reenen, director of the Centre for Economic Performance, and the co-author of a recent study into management practices at 4,000 companies, was critical of UK management and questioned whether British executives could cut it overseas if they became disenchanted with pay levels in Britain.

"UK management is not in the premier league. Management aspires to pay as well as the US, but our study finds that average management quality in the US far outstrips that in the UK. Only one in every 50 American firms in our sample can be described as 'very badly managed', compared with roughly 1 in 12 in the UK.”
The suggestion of Simon Jenkins in his article quoted above is that we call the fat cats’ bluff. Dare them to move overseas and see how many takers there are: I suspect not many.

Morality and Mega-riches
This question has been left until the final paragraph, though it has run through my note from the beginning. In some ways it the most important theme of them all. When some people have piles of cash which could reach the moon or even Mars, can it be right that they exist alongside people who try to survive on 50pence or a dollar a day? Christian morality tells us this is a moral obscenity and virtually all other moralities urge fairness and something approaching social justice. The Hollywood film Wall St’s Gordon Gekko urged that ‘greed is good’, that it provides the motor which drives an economic system which delivers many more ‘goods’ than ‘bads’. Maybe this is true but one has to wish for the kind of thinking which led Gates-Buffet to realize their fortunes were worthless as guarantors of happiness and conclude that using their fortunes to help others ultimately, might be.

Government Action
Governments could do a number of things to attack the problem: raise taxes for the mega rich; end loop-holes which make London a virtual; tax haven; strengthen the rights of shareholders to question salaries of directors and chief executives. Evidence suggests indignation on this issue is cross party: Cameron has promised action on ‘non domiciled’ fat cats who avoid paying tax on their fortunes while they live in UK because technically they live overseas.

Reading
Several articles are quoted in this piece from The Guardian, The Observer and elsewhere. The n
books are:

Robert Frank, Richistan (2007): A Journey through the 21st century wealth boom and the lives of the new Rich. Plaktus
Oliver James(2006) Affluenza: How to be Successful and Stay Sane. Vermillion.
Richard Layard (2006) Happiness: Lessons from a new Science.
Bill Jones October 2007
http://skipper59.blogspot.com/

Burma; The Monks' Revolution

2007-10-15T10:59:00.001Z

[Just to say that these three postings today are in fact weekly briefings for my current affairs class going back to October 3rd, 2007

Burma is two thirds of a million square miles (India 3.3 million-USA is 9.4 million) and has over 51 million inhabitants, its most populous area being the valley of the river Irrawaddy. It is familiar to us in the UK as a former part of the British Empire, given its independence in 1948. It has been in the news over the past month for the spirited attempt by a Buddhist monk led movement to remove the rule of the military junta, (in power since 1991-and before that the military since 1962). This briefing provides background and analysis of these events.

Burma: History

The Mon people were the first to settle in the valley-about 900BC- and to adopt Buddhism; the Pyu speaking Tibeto-Burmans arrived about 100BC. The Mon and Pyu kingdoms competed for control of the area but the Nanzhao from neighbouring Yunnan invaded regularly around this time and eventually destroyed the Pyu kingdom. This group of incomers formed the Bagar Kingdom but in overcoming the Mon people they were attracted by their Buddhism which they went on to adopt. Magnificent temples were built around this time. In 1287 however, Kublai Khan’s Mongols invaded. It was too hot for the Mongols but the Tai Shan people who came down with them settled widely as the Bagan empire divided into small kingdoms. Eventually the minor kingdom of Taungoo achieved supremacy over both lower and upper Burma.

Europeans Arrive

By now the Portugese had made their entry, not to mention the British who shouldered aside the Portugese and defeated the Burmese in 1825 when the latter’s conquests brought them into contiguity with the British in India. In 1852 there was another Anglo-Burmese War Britain won several states from Burma as a result of these wars. After the Third Burmese War in 1885, the British united, in victory, both Lower and Upper Burma, the royal family was exiled to India and after four years the country was pacified. Burma was now administered as a single province with British India.

Colonial Rule

The British brought in Indians and Chinese who quickly displaced the indigenous ruling elite. Insurrections were frequent against British rule; especially arising from the disrespect shown to Burmese customs like removing shoes upon entering temples. In 1919 a disturbance was caused when a group of monks in Mandalay tried to eject a group of tourists from Britain who refused to remove their shoes. The leader of the monks was sentenced to life imprisonment for attempted murder.

‘Such incidents inspired the Burmese resistance to use Buddhism as a rallying point for their cause. Buddhist monks became the vanguards of the independence movement, and many died while protesting. One monk-turned-martyr was U Wisara, who died in prison after a 166-day hunger strike to protest a rule that forbade him from wearing his Buddhist robes while imprisoned. Kipling’s poem 'Mandalay’ is now all that most people in Britain remember of Burma’s difficult and often brutal colonisation.’ (Wikipedia)

In 1937 Burma became independent of India and insurgencies began the most important of which was the Burmese Independence Army(BIA) led by Aung San. He founded the Thirty Comrades who were trained in Japan. In 1941 in a house in Bangkok:

‘25 of the Thirty Comrades had their blood drawn from their arms in syringes, then poured into a silver bowl from which each of them drank - thway thauk in time-honoured Burmese military tradition - pledging "eternal loyalty" among themselves and to the cause of Burmese independence. Their average age was just 24 years.^’

^{The invading Japanese were initially successful but the British counter-attacked and retook the country assisted by the SOE and elements of the Burmese themselves. The BIA fought with the Japanese 1942-44 but switched to the Allied side in 1945.}

^Independence^{, 1948}

^{Aung San became Chairman of the Executive Council of Burma, a kind of transitional government, but he was assassinated in July 1947 along with several of his comrades.}

^Modern^Burma^{: In January 1948}^Burma^{became independent with U Nu as its first prime minister. it did not become a member of the Commonwealth. In 1961 U Thant became Secretary General of the UN, assisted by a young Aung San Suu Kyi, daughter of the founding nationalist leader.}

^{Military Rule}

^{In 1962 General Nin We led a coup d’etat and went on to rule his military junta for the next 25 years. In 1974, during the funeral of U Thant, disturbances were suppressed without mercy. In 1988, the so-called 8888 uprising, economic in origin, saw 3000 people killed. General Saw Maung then staged a coup within the context of military rule , forming the State Law and Order Restoration Council (SLORC). Martial law was declared in 1989 after widespread protests. The ‘Union of Myanmar’ replaced}^Burma^{as the official name of the country, though}^UK^and^USA^{refuse to recognize the name.}

^{In 1990 the first elections in 30 years were held. The League for Democracy (NLD) won 392 out of 489 seats but its leader Aung San Suu Kyi was not allowed to come to power as the generals declared the elections void. General Than Shwe took over and has been in power since then. In 1997 the SLORC was renamed as the (Orwellian sounding) State Peace and Development Council (SPDC). In March 2006 the generals moved their capital from}^Yangon⁽^Rangoon^{) to Naypyidaw (‘city of kings’) deep in the countryside.}

^Economy^{: During the latter stages of British rule}^Burma^{was seen as a wealthy country likely to become more so. It had plentiful supplies of oil, natural gas and teak as well as rubies, sapphires and other precious stones. However, the economic management of the nation by the generals has been a disaster with inflation running at astronomic rates of 60%. It also provides a large slice of the world’s illegal drugs including 8% of its opium. Transparency International, a corruption watchdog places}^Burma^{above only}^Somalia^{as the most corrupt country in the world. Infrastructure is appalling in the country and tourism a fraction of what it could be given the natural beauty of the place. Because of the very bad human rights record}^Burma^{is denied aid that flows to other poor countries.}^Burma^{has a GDP per person of only $1500, way down the international league.}

^{Economic Protests:}^{The huge hike in fuel prices in September 2007 provoked outrage among}^Burma^{’s starving population. The initial ‘Burmese way to Socialism’ policy pursued by the military after 1962 –essentially a military takeover of business- led to a drastic fall in production. The ‘rice bowl’ of the region was soon reduced to pauper status. Soldiers regularly stop farmers on their way to market to extract bribes and steal food. Starvation is greatest on the borders where the ethnic minorities live- about a third of}^Burma^{’s under - fives are ‘chronically malnourished’. On top of that the regime spends only 2% on health care and 40% on armed forces. Infectious diseases are as rife as in}^Africa^{and there is an HIV epidemic. Much labour is forced, virtually slave labour, forced by the military to supply its needs.}

^{Small groups in early 2007 plucked up the courage to demonstrate against the bad economic management of their government but were soon picked of by government spies and secret police. Amnesty International turned a witheringly critical eye on the regime- criticism seems to have little effect on the generals who are determined to exploit their position in terms of power and material advantage.}

^{In April and May, 2007 a number of human rights activists were arrested and others beaten by police. But this was only the prelude to what was destined to come later.}

^{Monks’ Revolt}^{: Anti government protests, focusing on economic conditions, began in August and soon it became clear that the monks were placing themselves at the forefront. There are 400,000 monks in}^Burma^{, all of whom command huge respect. Giving them alms is believed to be the means whereby one’s future life is guaranteed to be a happy one. Most monks serve only for a few years so many of them later become integrated into national life. Soldiers fired over the heads of demonstrating monks in early September in Pakkoku and the military then refused the clergy’s request that they apologize. This is what fired the monks’ revolt.}

Thousands of monks led protests on September 18, and were joined by Buddhist nuns a few days later. On September 24, 20,000 monks and nuns led 30,000 people in a protest march from the famous golden Shwedagon Pagoda in Rangoon, filing past the offices of the National League for Democracy. Well known comedian Zaganar and star Kyaw Thu brought food and water to the monks. On September 22, a large group of monks marched to greet and discuss with Aung San Suu Kyi, who has been under house arrest since 1990.

^{In September also, the Buddhist monks withdrew their spiritual services from military personnel- a major statement in such a highly religious country.}

^{These marches-much bigger than those in 1988- greatly alarmed the military who immediately accused ‘foreign meddling’ as the cause. In}^Rangoon^{, they hesitated significantly before finally using tear gas and then live ammunition. An Saung Suu Kyi was moved to the notorious Insein prison, used by the British when they were in control. Curfews were announced and monasteries surrounded. When the monks refused to stop demonstrating, monasteries were entered, monks arrested and many tortured, imprisoned or in some cases killed. The ‘tatmadaw’ (armed forces) seemed to wobble for a while but their harsh responses seemed to crush the immediate resistance out of the opposition forces. Officially only 8 people have been killed but estimates put the real figure in the hundreds or even more.}

^{Hundreds of monks are either still in detention or have been ‘disappeared’.}

^{Response of World Community}^{: Most western countries reacted with horror to the actions of Than Shwe’s government but Ban Ki Moon’s visit on behalf of the UN, proved useless. The UN sought to condemn the regime but action by}^Russia^and^China^{prevented this.}^Japan^{made vague threats about cutting aid after the shooting of a Japanese photographer but like most ASEAN neighbours (Burma was admitted to this regional grouping in 1997), reactions were mild. The Economist notes (}^6/10/07^{) that the east has managed to fill the gap caused by the sanctions applied by western countries. China sees Burma as a vital source of natural resources, especially oil and gas, so has been careful in what it has said. It has to be said also, that neither}^Russia^or^China^{have particular objections to brutal repressions of internal opposition.}

^{Having said this a more hopeful development occurred on 11th October when China made a U-turn,deciding to support the UN resolution rebuking the regime for suppressing peaceful protests and demanding the release of political prisoners. David Miliband noted the isolation this statement imposed on the generals. The}^US^{ambassador to the UN said the issue would be taken up within two weeks and further measures would ensue if the regime did not respond. Time will tell if the generals are listing but The Economist’s view(}^29/9/07^{) of the revolt is hardly sanguine:}

Back in 1988, at the peak of the protests, even as soldiers were mowing down the crowds, many Burmese felt sure the rotten regime was ready to collapse under the unstoppable force of “people power”, as the Marcos regime in the Philippines had two years earlier .Even if the regime does crumble and the junta stuffs its bags with gemstones and heads for exile, Myanmar's troubles would still be daunting. Many of the ethnic minorities continue to distrust the majority “Burmans”, even including the democrats. And the NLD has been gutted by years of oppression. Miss Suu Kyi, inspiring figure though she is, is an untested leader who has perforce been woefully out of touch with events. As in 1988 and 1990 the Burmese people have shown they want to choose their own leaders. In the past they did not fully reckon on the ruthlessness of the people they were up against. One day, as with all tyrannies, Myanmar's will fall. But much blood may flow before that day dawns.

15th October, 2007

The Election that never Was: Brown's Black Saturday

2007-10-15T10:47:00.000Z

“You’ve got to know when to hold ‘em

Know when to fold ‘em

Know when to walk away

Know when to run.”

Kenny Rogers, ‘The Gambler’

So it was all called off just when most people-including me- thought it would happen. This briefing note aims to identify: the arguments adduced for and against the election that never was; explain why it failed to materialize; and assess the fallout for Gordon Brown.

1. The Case for an Autumn Election:
Polls: During the spring and early summer the Conservatives established a convincing lead as the Blair era came to an end and the new one began. Many expected Gordon’s brooding personality to help extend this lead and the Conservatives had rather reckoned on voters being turned off by the grumpy, glowering Scot. However, this was not to be. Brown immediately benefited from a considerable ‘bounce’ and Labour began to extend a lead. Brown’s early actions like forming a well balanced Cabinet and seeking to include outsiders as ministers or advisers, went down well as did his proposals for reform of government. He also enjoyed a makeover to his appearance and smiled more often.

He also managed to cope more than adequately with floods, a terrorist incident, foot and mouth and a financial crisis. Cameron fought hard during the summer to recoup the shortfall and by September he worked hard on issues like crime and ‘the broken society’ to pull his party up to equal standing. However, signs of disunity in the form of attacks from the right- Tebbitt in particular- led to a further dip. By the middle of the month Labour was recording leads of over 11% in more than one poll. John Curtice in the Independent, saw the average lead as 8% on 4/10/07.

Mandate: It would give Gordon the chance to obtain his own "mandate". Naturally, he did not need one as Labour has one from the 2005 election, but this was one associated with Blair and Brown has never been endorsed as PM by the public-and has been criticized as such- so he is still, in a sense, in Blair’s political shadow,something he is bound to resent.

Conservatives: The Tories were in disarray in mid September. Cameron had lost much credibility with his U turn over grammar schools and seemed unable to decide whether to do an ‘Andy Coulson-right-turn’ or a ‘Steve Hilton-left-turn’. Meanwhile the Tebbit-Thacherite faction was in open revolt and Gordon was ‘triangulating’ disingenuously by claiming Tory ground on crime and immigration. His slogan "British jobs for British workers" seemed to tack so far to the right it lurched into BNP territory.

The Economy: International market turbulence might cause house prices to fall and for consumer spending to ease back; the credit boom looks like coming to an end, for similar reasons and interest rates will probably climb as 2008 approaches. More than one economic commentator argued that Brown should make the electoral dash as things can only not get better.

Political Courage: Brown had a chance of standing against George Robertson in 1978 but pulled back; he could have stood for the leadership in 1992 as Blair urged at the time, but pulled back; and could have stood against Blair in 1994 but famously stood aside yet again. So Brown has a reputation for ‘choking’ it when the chips are down. He would hate such a label to adhere more permanently, especially as his recent book was called Courage: a series of eight profiles of people who have shown immense courage.

Marginals: all students of British politics know that as some two thirds of seats are ‘safe’ and unlikely to change hands, it is those with thin majorities- the marginals- which decide who wins. The Conservatives have been astute in identifying them and Lord Ashcroft, the Tories’ biggest donor has been pouring in money for months to edge them towards his side of the fence- it worked well in 2005. Some urged a snap election to bring such spending under the strict controls of an election campaign period.

Voters say they want election: the poll in The Guardian, 6^th October showed 48% favour an autumn election.

Penalties of Backing down: having allowed speculation to run riot, Brown made an election seem almost inevitable: he also took on election staff and brought forward announcements on the NHS and the economy which suggested the decision had already been taken. Backing down would make him appear a coward(see above).

Penalties of no election would be short-lived: the Opposition would taunt Brown for a while about backing off an election test, but this would not last more than a month or so.

Case Against
Polls: i)Ever since voting behaviour exhibiting the strong class allegiance of the 50s and 60s- the so-called ‘partisan de-alignment’-political commentators have discerned a much greater ‘volatility’ in voting patterns. A trend can no longer be extrapolated very far into the future and even a day or two is a long time in politics

ii)While the polls showed a healthy lead it could not be ruled out that Cameron’s conference could be a wild success and alter the political weather.

iii) In the last few elections the polls have consistently shown Labour exceeding their actual lead over the Tories by 2-3%.

Boundary Commission changes: these will take 15-20 seats off Labour and give them to Conservatives.

2005 marginals now harder to win: new MPs have bedded down in those marginals lost by Labour, making it hard for them to win them back and increase their majority of 66.

Campaign Uncertainties: it can never be certain that a party will not lose a few percentage points during campaigns when gaffes and unscheduled events can happen.

Danger of Underperforming: to justify an election politically Brown needed to come out with an increased majority. If he only equaled Blair’s 66 the election would seem unnecessary; if he managed less than 66 it would have seemed a failure, despite the winning of an extra 2-3 years in power. If his majority was a mere 20 or so, as for Major in 1992, he would have been at the mercy of rebels for the rest of his term.

Danger of Losing: if Brown lost the election, he would be the shortest serving PM since Bonar Law’s six months 1923-4 or even George Canning’s 119 days in 1827. This would very definitely not be something which the fiercely ambitious Gordon Brown would like to have appended to his name in history books.

No Need for an Election: voters vote for parties to govern through parliament, not individuals. Labour has until May 2010 before an election is due so there is no need for one now. Furthermore, voters, despite saying they would like elections to pollsters, tend to think otherwise in reality. There was a risk voters would punish Brown if he called an election.

Appearance of Opportunism: dashing for the polls might appear to be exploiting a situation for personal benefit and produce a backlash from an occasionally perverse electorate.

Dark Nights deters voters: a November election would be in the dark and that might deter older voters from turning out.

Electoral Register not ready: it was calculated a million new members would not be included on the register- though some say they would be young urban dwellers and not so likely to vote anyway.

Visit to Iraq: this was a major mistake. Never mind that Thatcher did the same in 1983 to bolster her warrior status before the election in that year, Brown’s visit seemed too obvious and seemed to exploit serving soldiers for political purposes. Furthermore, he had promised to announce his plans for troop reductions to the Commons and in the event

announced, in Iraq some 500 reductions which he had announced earlier; a return to his ‘double counting’ tendencies said critics.

Marginals: Benedict Brogan, a Daily Mail journalist and blogger with close links to the brown camp, reported the evidence from polling the marginals to be ‘bad’ on 7^th October. If true this should have given Brown pause re the decision to go to the country. Maybe Ashcroft’s money had already done its work.

Tax proposals: Labour are confident Osborne’s tax proposals do not add up and have not been costed properly. However, there was doubt such proof could be adequately established during a short campaign.

Voters Unreliable on Wanting Elections: whilst voters might say they want an election, there is evidence to suggest they can change their minds during the campaign. Right up to early October polls had shown opposition to an election.

Tories now united: Brown hoped talk of an election would destabilize Conservatives, riven as they were by differences over policy, but the conference succeeded in delivering a greater degree of unity than they have had for maybe two decades.

Why Gordon backed Down

Brown allowed the election speculation to begin as soon as he acceded to power; he thereupon stoked it up and let it reach fever pitch for several weeks. Everyone knows of Brown’s famous caution and meticulous planning of political strategies. But it seems he was always sceptical of the snap election idea and remained to be convinced. His close associates the Eds Balls and Miliband plus Douglas Alexander, were apparently gung ho for the election and wanted to deliver that killer blow to the enemy as son as possible. To this extent it was a purely opportunistic strategy- common-place in politics but not one it is wise to confess or be found out pursuing. However, these tyro political assassins had ignored two crucial factors:

a) Osborne’s inheritance proposals: he suggested the tax could be abolished and paid for by taxing non domiciled people who live in the UK but do not pay its taxes because they technically are domiciled abroad. Maybe this suggestion was poorly costed and speculative but as an idea it proved to have mesmeric power. Many people complain that the limit beyond which estates have to pay inheritance tax if they are worth above £300,000. Given that even modest semi-detached houses are no worth that mount, the tax has caused great anguish to people wishing to pass on their assets to children and relations. Politically, this has a crucial feature in that many of Labour’s most marginal seats are in the south-east where property prices have rocketed over the past decades.

b) The Conservative Conference was a substantial success, with a unity inspired by the election fears, a series of well received speeches by David Davis, Osborne and, even Iain Duncan Smith. In addition Cameron’s own(‘Look Mum, no notes’) speech received rave reviews for its fluency and ability to sketch in a coherent vision of the future, albeit of a more rightwards leaning one than the more liberal version Cameron has offered since being elected in December 2005.

The impact of the tax proposals was near instant and Labour’s private polls in the marginal seats began to return grave news. Polls in the wake of the conference also revealed Labour’s lead slashed to only a few points and October 5^th Friday’s Guardian poll reported level pegging at 38% each. The leaked ICM poll in the News of the World on Saturday 6^th October revealed a Conservative lead of 44-38%, a six point lead in the marginal seats which would have ruined Labour’s chances of even holding on to its majority let alone increase it. Brown then bowed to the inevitable and told interviewer Andrew Marr that the election would not take place.

The Fallout of the Failed Gamble
In June this year David Cameron expected Gordon Brown to be a lumbering, grey, extinct volcano of a politician whilst he proved remarkably nimble, steady of nerve and fecund of ideas. So confident did Gordon become, boosted by poll leads of up to 11% that he fancied taking on the still untested David Cameron. Labour ministers allowed themselves to dream it would end the career of the former Etonian. Oh dear! It didn't quite work out that way. As for Cameron, Brown's over-confidence led to a similar, but more grievous mis-judgement. Ming Campbell has called it 'a humiliating climbdown'; the Observer spoke for most of Fleet St in declaring:

He[Brown] was seduced by the short-term goal of annihilating the Tories. He so craved a mandate from the ballot box that he squandered much of the implicit moral mandate he had from soaring poll ratings. The public had invested in him that crucial and most ephemeral of political commodities - the benefit of the doubt. He has gambled it unwisely on political games.

The worst ramifications of this defeat may not survive the new year but Gordon may have sustained a crippling hit:

i) he has lost, temporarily at least his reputation for strength which so boosted his ratings compared with Cameron.

ii) Cameron has leapt in with confident sounding certainties. They are based mostly on supposition of course but every opposition has to have ready and waiting to unroll and he has done so adroitly.

iii) Brown has lost his reputation for being decisive and for getting things right.

iv) He tried to blame his advisers- Balls, Alexander and Miliband were the most enthusiastic for the plan- but everyone knows he deliberately let talk of an election continue until it seemed imminent. It was his call and he must take the blame he could not bring himself to admit to Andrew Marr on Sunday morning.

v) Having declined to fight George Robertson in 1978, to stand for the party leadership in 1992 and take on Blair in 1994, Brown's reputation for 'bottling it' has been possibly sealed for ever.

v) The next election is now definitely off for spring 2008 and we must wait for the long haul in 2009, or even later if, as we are told is likely to happen, things go pear-shaped with the economy.
vi)The Tories already have posted leads in a number of newspapers, much to the glee of the right-wing press. It'll be while before they change and will help Cameron immensely as he ploughs his 'liberal Tory' furrow. As long as he has a poll lead the ‘Tebbitt’ faction tolerates him, but once he loses it or slips behind, they start to sharpen their knives.

vii) Instead of 'finishing off' Cameron's project, he has reinvigorated it mightily and handed the political initiative to the Opposition until such uncertain time it can be wrested back.

viii) By listening to a small group of young advisers, Brown has appeared to follow the ‘sofa government’ practices of Blair. It is well known that the ‘grey beards’ of Straw and Hoon were opposed to the idea.

ix) Some defenders of the election speculation claim Tory promises for the next election campaign have been ‘smoked out’ so that they can be attacked in good time. This seems a thin defence however; the party surely has more things up its sleeve than inheritance tax changes.

On Monday 8^th October, Brown addressed a press conference and admitted his mistakes, up to a point. He insisted he had not gone for the election as he wished to demonstrate his vision for the UK in the years remaining before an election was due. Whilst not convincing anyone-let alone this grouping of cynical world weary hacks- he had drawn back because of the polls, he at least managed a degree of damage limitation. He can comfort himself with the thought that he has over two years in which to repair his reputation for strength and solidity. But his sleep might just be disturbed by the thought that it didn’t work for the Tories after Black Wednesday, back in 1992; that disaster dogged them and kept their ratings bumping along the bottom for over a decade.

Bill Jones, October 2007

Gordon Brown: Brilliant Obsessive

2007-10-15T10:35:00.000Z

Gordon Brown: Portrait of a Brilliant Obsessive

Early Days

Gordon Brown is famously a ‘son of the Manse’ in that his father was a minister in The Church of Scotland; accordingly, he grew up within an atmosphere of social responsibility and philanthropy. He and his brothers regularly helped their father, John Brown with work in the Kirkaldy, Fife parish and at the events he organized in connection with St Brycedale Presbyterian church: ‘Father was a generous person and made us aware of poverty and illness…he taught me to treat everyone equally and that is something I have not forgotten’ (many would now bitterly dispute such an assertion however). Personal ambitions were unworthy and therefore to be to be concealed, according to Brown’s father, though few would deny that in Brown’s case, that ambition has been a driving force in the young Brown’s career trajectory. However his parents did expect precocious young Gordon to study hard and succeed.

University, eye problems and relationship with girls.

Brown was gregarious and popular and at first was determined to become a professional footballer but he developed a love of history and politics from an early age. The young Brown however, was not obsessive about girls in his teens , despite his good looks, fit body and witty, charismatic social image amongst his peers. He took his Highers aged 15 and was already qualified for university; he registered at Edinburgh in 1967. His elder brother John, introduced him to friends as ‘boring but very clever’. However, a major problem arose after a rugby match in which he detached both retinas; delaying treatment and heading a football made matters worse. He had four operations and was forced to be immobile for six months in the dark. From now on contact sports were forbidden. Such a trauma undermined his confidence but made him even more determined to succeed in the shortest possible time. Fortunately his right eye was saved but his face acquired a dour, stiff expression. Now he was, perforce, dedicated to his own advancement and exhibited a tendency to seek control over others.

Eventually, demonstrating a rather non socialist interest in property, Brown bought his rooms in Marchmont Rd over whose inner chaos he presided. He joined the Labour Party in 1969-long haired and scruffy but not especially of the left eg CND or Scottish independence. Nor did he indulge in the usual dissipations of booze, pot and so forth. However, he did form a close relationship with Princess Margarita of Romania, the affair lasting for several years- he liked her enveloping maternal care. This relationship came to an end but both were reluctant to finish it completely so strong was it-in later years he regretted never having married her. The consensus seemed to be that he took her for granted, expecting her to wait for hours while he drank and chatted with friends about politics; he also, it was said, tended to conceal his true feelings; a pattern to be repeated with other women in his life. That there were rumours that he was gay, now seem ridiculous. In 1972 he was awarded a brilliant first- some say the best ever awarded at Edinburgh- and began a doctorate on Labour in Scotland.

The Politics Bug Bites

Later in 1972 he was elected Rector of his university and this opened his eyes to politics (in the ‘lower case’): ‘It was quite a revelation to me that politics was less about ideals and more about manoeuvres’. He soon excelled in the sword-fighting of politics. His assiduous cultivation of such skills led to his accumulation of a goodly host of enemies in the university which maybe stymied his later ambition to move from his temporary lectureship to a full one. He consoled himself by becoming increasingly active in the Labour Party, though his shambolic habits (plastic bags full of bits of paper, notes, scruffiness and invariable lateness) and appearance(badly bitten finger nails, shabby clothes) did not assist efforts to win over sceptical working class voters. In 1978 there was a chance of fighting a by-election against George Robertson but he backed off, some said lacking the courage for the fight. In 1979 he fought Michael Ancram but, to his own devastation, narrowly lost. He took jobs teaching for the WEA and BBC TV for a while to support himself while waiting to get into parliament; at the BBC he met the feisty Sheena McDonald, with whom he had a long relationship. In 1983 he was adopted for Dunfermline East, a safe seat which he duly won at the 1983 election. He was now an MP.

Westminster

Politically Brown was never wild and woolly left, CND and so forth but tended to see Attlee’s achievements-nationalisation, welfare state- as the bedrock of Labour’s philosophy. He was very much Old Labour in the eighties until the early nineties in fact. He wrote a book on Scottish Labour with Robin Cook but was furious when latter upstaged him at the launch by appearing to claim all the credit for it. He had already concluded Cook was an unhelpful rival in the unforgiving world of Scottish politics. However, he struck up an unlikely friendship with Tony Blair, a young Labour MP from a Conservative background and they shared a room. Blair was an eager friendly person who was prepared to defer to Brown’s greater knowledge and skills at this time. His dealings with Cook remained toxic; Brown was convinced Cook was trying to destroy him. However, he struck up a good friendship with Labour’s new Communications Director, Peter Mandelson, who was adept at infighting and destabilizing briefings.

He also got on well with John Smith, the Shadow Chancellor and went ‘Munro Bagging ‘ with him. Following robust performances in debate, he was soon seen as a potential future leader and did well in the party elections for the shadow cabinet; when Smith had a heart attack, he stood in a Shadow Chancellor for him. However, after the 1992 debacle, he shrank from challenging his friend for the leadership when Kinnock stood down as Tony Blair had urged- another failure of courage? After shadowing employment and social security, trade and industry etc in the 80s, he was made Shadow Chancellor by Smith in 1993, even though he had not been uncritical of his leader. Before Black Wednesday he had supported the ERM but in its wake he said the opposite and blamed the government for ‘devaluing’. Brown determined to provide Labour with a new intellectual credo to replace the one which had lost the 1992 election. ´

He resolved from the outset that Labour would never again pledge to raise taxes in an election campaign; nor could failing firms be saved or powers be restored to the unions. He began to build a new approach of ‘radical populism’: to address globalisation, the ‘knowledge economy’ and the markets. He slowly came to accept the market provided opportunities for the poor as long as they were prepared to train. He was ready to accept that ‘much of Thatcherism was irreversible’ (Bower, p101). Those more traditional (Straw, Blunkett, Cook, Meacher, Prescott) than he opposed this ‘modernization’. Interestingly there is no mention of Blair as a fellow forger of the New Labour ethos in the Bower biography.

Brown Builds his Modernizing Team

Brown began to present himself as a leftie to left audiences and to the right if his audience was. Smith favoured the ‘one more heave’ approach but Brown was all for a clean break and a new strategy. Clinton’s scorn for the ‘idle poor’ influenced him at this time: a ‘hand up not a hand out’. He not so much changed Labour’s ideology as changed the vocabulary of political discourse. Sue Nye became his gatekeeper and office manager to bring much needed order. Ed Balls, Oxbridge graduate and FT leader writer also recruited. Meanwhile Smith was hostile to the modernizers, asserting Labour would ‘sleepwalk to victory’. Brown believed the Treasury would be the powerhouse of government change: economics would drive change needed. Mandelson was also a confrere but who, according to Naughtie was ‘scared’ of Gordon, was destined to shift allegiance to the sunnier temperament of the former lead singer of the Ugly Rumours.

The Granita Meeting

In 1994 Smith tragically died and the succession was at stake. Brown and Blair were both ‘in the frame’ as Young Turks of great ability but Brown felt himself to be the senior and the more able of the two. However, Blair had more popularity as a good communicator and as a new force. They met to discuss their positions at this much disputed occasion: the Granita restaurant in Blair’s home territory of Islington. No notes were kept but Brownites claim their man was promised a period as PM after Blair had served a reasonable term. During Tony’s time as PM it was agreed Brown would have virtual control over domestic policy. Precisely what happened is still unclear; Brown’s supporters claim a ‘deal’ was done but Blairites deny this. Naughtie reckons Blair’s temperamental desire to leave meetings with everyone feeling happy, led him to give the impression that Gordon had received some kind of a confirmation that he would be allowed accession in the fullness of time. Brown thought he had a

‘near promise of succession; Blair insists that nothing so clear could have been offered.’(Naughtie, p73).

According to Anthony Seldon’s biography of Blair a close insider to the action judged: ‘Tony had to battle Gordon into submission. It was incredibly tense. Incredibly emotional. There were moments when Gordon got the upper hand. He made Tony feel like a younger brother’(p193)

It has to be said that:

a) Blair might have made some kind of general statement of intent but Brown must have known that once Blair was PM , giving the job up might not appeal so much.

b) Would Brown have been so generous as to do the same? It seems unlikely, given his ‘thundering ambition and determination’ (ibid, p79).

c) Brown had, in any case won more control over the domestic agenda than any previous Chancellor. Chancellor was therefore more than most politicians cold have hoped for and he had virtually been offered an unprecedented ‘dual premiership’

d) There was no constitutional basis for the ‘deal’; standing down is something wholly in the hands of the PM, as is supporting any successor.

e) If it had come to a contest, despite Brown’s assertion to the contrary, along with his claque, most commentators think Blair would have won easily. Brown’s star was waning a little at that time and Blair’s star was rising through his communication skills and ability to charm fellow MPs.

f) Whatever to politicians might decide in opposition, it is difficult to prescribe what will happen in government.

Whatever the reality, this meeting, producing vastly differing beliefs as to what had been agreed in the minds of the two protagonists, was destined to sour the next decade and, at times, threaten the stability and future of the government itself. We are informed by many insiders that Brown constantly reminded Blair that he ‘owed’ him a share of the top job.

Brown as Chancellor

Few dispute that Brown’s record as Chancellor is impressive. Following his granting independence to the Bank of England in 1997, his stewardship of the economy has seen: constant economic growth; low inflation(2% in October 2007); low unemployment; and the praise of the IMF and Central European Bank. However, critics point out that: UK prosperity has been based on a mountain of consumer debt of 1.4 trillion pounds as well as substantial government debt caused by excessive spending. Much of the consumer debt has been fuelled by increasing house prices against which people have borrowed and a hugely inflated public sector. This means that increases in interest rates might cause repossessions, bankruptcies and banking failures. So far this has not happened but the recent Northern Rock crisis showed how easily this might still happen if things go wrong. Moreover, this has been a City led prosperity with manufacturing languishing, balance of payments enlarging, and competitiveness diminishing. In other words, the economy has not been based on strong foundations like, say, Germany or Scandinavia.

Brown as a Politician; especially in relation to his ‘rival’ Tony Blair

When Blair refused to give way, Brown resorted to a number of strategies:

a) He refused to allow information out of the Treasury: former Cabinet minister David Clark has testified that: ‘They(the Treasury) were telling things to journalists they were not prepared to tell Number 10… it was hard for the PM’s team ‘to contain their frustration’. This was just part of Brown’s way of showing Blair that he could make his life miserable if he did not agree to move aside.(Larry Elliott et. al, Guardian, 16\4\02)

b) Destabilized Cabinet meetings: at one cabinet committee meeting on welfare, early on after 1997, Brown was told by Blair that ministers present did not like the way his advisers, Balls and Ed Miliband, spoke too much; Brown ‘compromised’ by promising they would not speak but bringing them along and asking their advice in loud whispers. In addition Brown showed his contempt for Blair by ignoring cabinet business and reading his own papers and scribbling on them throughout the meeting.

c) Hostile briefings by spokespeople: the most notorious of these briefers was Charlie Whelan, his press secretary, who was wildly indiscreet and given to briefing by mobile phone from the bar of a pub in Whitehall. Whelan was sacked in the end for exceeding his remit, much to the relief of those he had targeted, presumably on Brown’s tacit say-so.

d) Playing up to the left to discredit ‘New Labour’: in 2003 he ended his speech with ‘best when real Labour’. The next day Blair’s brilliant oration squashed him and he ostentatiously refused to applaud.

e) Using support to threaten Tony’s legislative plans: a perfect example was over top-up fees in January 2004, when opposition mounted and it seemed defeat was nigh; at the last minute Brown ordered Nick Brown to call off the dogs and the bill passed by 5 votes. Blair must have realised that he was in government by the graced of his Chancellor after that demonstration of naked power.

f) Expanding power of Treasury: Brown embarked on an ambitious programme of extending the writ of his department deep into the heart of government. His Public Service Agreements with departments bound them to achieve specific targets in exchange for funding; this was a potent means of binding departments to Treasury control.

g) Pursuing feuds with his enemies: at different times these included Cook, Hain, Clark and Reid. The connecting link could well be the threat they posed for the leadership. It was well known that Blair, as the years passed, was so frustrated by Gordon’s behaviour, that he was looking for someone to replace Brown as heir apparent.

h) Exploding at anyone who ‘flouted his authority’ over finance or the area he regarded as ‘his’ areas. These included Milburn and Byers who regularly floated ideas on policy- Bower suggests often at the behest of Blair himself.

i) Avoiding blame for disasters: when things went pear-shaped, like over the Millennium Dome, Brown was delighted at the discomfiture caused to Blair and Blairites but was careful to avoid any association or blame; some used the term ‘McCavity the Cat’ (after TS Elliot’s poem) to describe this tendency. Bower-p367- recounts how Brown ‘hid behind other ministers to avoid public responsibility’ over rail, ILAs , CMI and later NATS when it needed huge amounts of extra cash.

j) Acting only when voters seemed to be turning against him: this he did over pensions when his 75 pence increase was greeted with outrage and his ratings fell from 22% to 6%.

k) A tendency to lose his temper: Many ministers had to put up with a screaming rage or two from Gordon, none less than Blair himself who experienced extended bouts of this over the years, especially during the ‘coup’ period when meetings were long and difficult.

Brown’s Character

As can be seen from the above, Brown is not an easy person to work with. His behaviour has been characterised by obsessive secrecy about his own work and his private life. He does not embrace foes and placate people he has offended, as Blair tended to do. Andrew Turnbull, former Permanent Secretary to the Treasury, astonished the political class when he issued his analysis of Gordon’s character(21\3\03) as comprising: ‘Stalinist ruthlessness,’; and a ‘complete contempt for other ministers’. The next day Jonathan Powell told a bicycling Boris Johnson that Brown would never be PM as he was a Scot. This, maybe, caused Brown to emphasise the virtues of the ‘Union’ and ‘Britishness’, even toning down his Scots burr according to some. In 2006, after the attempted ‘coup’ against Blair, Charles Clarke let loose a similar blast against Brown’s inability to work with colleagues and his tendency to lose his temper. However, people like Geoffrey Robinson, an old friend and financial supporter of Brown speak of his witty, relaxed company and his warm loyal friendship. Brown seems to be a ‘clan leader’ sort of Scot, determined to be in control and hostile to the rest of the world. He exhibits a split personality: warm, witty and engaging or dour, suspicious and determined to exploit whatever power he has. The Stalin metaphor is close: relentless, calculating ambition; plus a vindictive pursuit of vengeance Maybe it all depends on whether someone is perceived as ‘one of us’ or a potential enemy.

The ‘Coup’ Attempt, Autumn 2006.

In 2004, to assuage Brown’s constant importunate demands that he move aside, Blair promised not to stand after the next election but one. This was a big move forward for Gordon but was not enough: Blair could be still be PM by 2010 according to this approach. Having waited and complained of being betrayed for so long, Brown’s supporters felt the combination of Iraq, Cash for Peerages, loss of trust in the PM and the Lebanon War where he sided too closely with Bush, made him vulnerable. In September the move was made by former loyalist Chris Bryant and Tom Watson via, respectively, a letter asking Blair to resign and a public resignation by the junior minister. Soon a number of other junior ministers were resigning and it appeared a full blown coup attempt was in progress. The aim of it was to get rid of Blair at once rather than some years hence. Anguished and angry meetings occurred involving both protagonists and after the crucial one in Whitehall, Brown was seen grinning ear to ear in delight, presumably, in getting what he wanted: an earlier exit and a promise of support. But Brown had appeared to browbeat and threaten and it was not clear whether he had damaged himself in his desperation to oust Blair.

Blair proceeded to burnish his legacy during late 06 into 07 while the world of UK politics waited to be told the departure date. In the end it came: 27^th June when Brown could stand for leader in any contest that might emerge. In the event no-one stepped forward and when David Miliband declined to risk his luck, Brown was elected unopposed at Manchester in 24th June. In interviews he denied he had been ambitious for the job as he was happy just being an MP. Few believed that this one track minded obsessive was telling the truth.

Gordon Brown as Prime Minister(so far)

Brown had a remarkably successful start as PM:

i) his initial statements on constitutional reform-strengthen parliament, revive cabinet government- went down very well with Lib Dems and Guardian readers and most other groups as well.

ii) His Cabinet of ‘all talents’ was well received.

iii) He instantly set a new tone to differentiate from his predecessor: sober, serious, ‘non celebrity’: a ‘serious man for serious times’. After a decade of Blair’s more histrionic style this seemed to go down well with Labour supporters as well as most everyone else.

iv) He appeared to deal competently with a series of crises: terrorism at Glasgow airport, foot and mouth outbreak in Surrey and turbulence on the international exchanges.

v) Cameron, who had been shading Brown in the polls, up to when he acceded to power, had a bad summer and made a number of tactical errors which made it seem he was less in control of his party.

vi) Polls in early September showed him, after the Tories had clawed back his initial ‘bounce’ lead, leading the Tories by 8 points and regaining leads on all the important issues like law and order, social policy and so forth.

vii) Why no complaints re his difficult nature? Maybe he’s fulfilled now he’s won his ultimate prize; maybe married life has mellowed him. Who knows? Perhaps he’s still being a bastard behind the scenes and we’ll not find out for a while.

Snap Election? It’s still impossible to say whether Brown will risk such a gamble; my sense is he won’t put himself on the line when opinion is so volatile.

Reading:

The best guide to Brown I have found to be Tom Bower’s Gordon Brown: Prime Minister, Harper 2007. Also very useful are:

James Naughtie,(2001) The Rivals, Fourth Estate.

Paul Routledge, (1998) Gordon Brown, Pocket Books.

Robert Peston, Brown’s Britain.

Anthony Seldon (2004), Blair, Simon Schuster.

The PFI: A Rip-Off?

2007-01-24T11:21:00.000Z

The Private Finance Initiative: An Easy Way to Run up Long-term Debt for the Taxpayer?

The origins of this scheme are found in a pamphlet written for the Social Market Foundation by David ‘Two Brains’ Willets, called ‘The Opportunities for Private Funding in the NHS’. PFI was first announced in Norman Lamont’s 1992 autumn statement. The idea was to find a way of involving private companies in the funding of new schools and hospitals. PFI predicated that the private sector would build the new establishments and then run them for periods up to 50yrs with the taxpayer paying an annual ‘rent’ for the privilege. The political advantages were twofold: new schools and hospitals would come on stream; and because they were put up by the private sector, the expense would not count as ‘public debt’; something of which the exchequer in the early nineties suffered great excess.

However, there were problems.
i) It costs private companies much more-sometimes twice as much- to borrow money than government, meaning that these extra costs would need to be passed on to the taxpayer via annual premiums.
ii) The companies involved are guaranteed a high rate of income for decades meaning it’s a species of expensive ‘higher purchase’.
iii) There were no real risks taken by the private sector in that essential services have to continue- so the public sector in practice underwrites the schemes and in practice shoulders the risk.

David Craig, in his excellent polemic, Plundering the Public Sector, (Constable 2006), puts it thus:

‘All told, as is now becoming painfully clear in health and other services, the expenses that taxpayers (and the children of today’s taxpayers) become committed to under PFI vastly exceed the burdens imposed by traditional investment.’

Initially Lamont and Clarke were none too keen on PFI as they were aware of the potential for it to be too costly for too long. Clarke insisted companies should take the risks involved and deliver value for money. However, very few companies thought this viable and by 1996 there were only a billion or so worth of schemes in the pipeline.

Labour in 1997
In opposition Labour opposed the PFI robustly. Perhaps the most swingeing denunciation came from Harriet Harman:

‘When the private sector is designing, building, financing, operating and running the hospital, and employing the doctors and nurses, that is privatization and that is what the Conservative government are all about.’

Alistair Darling, also weighed in: ‘Apparent savings now could be countered by the formidable commitment on revenue expenditure in years to come.’

Labour critics insisted PFI was predicated upon an assumption –much disliked by the left and the centre too- that ‘private equals good: public equals bad’.

However, the one prominent Labour figure not to pour contumely on the scheme was Gordon Brown. As the incoming Chancellor, he faced the need hugely to expand investment in public service infrastructure without hugely increasing public borrowing. To retain City credibility, he set himself two ‘golden rules’:
1. Limit spending during ‘the economic cycle’ to no more than income.
2. Keep borrowing down to ‘a prudent proportion’ of GDP- in practice 40%.
Having inherited a debt of 45% GDP he could ill afford to allow too much of an increase. This is where PFI was such a seductively attractive scheme. Because its funding originated in the private sector it did not appear on the government books as debt.

But Brown faced a serious problem: PFI seemed a magical accounting conjuring trick, but business did not like it. So Geoffrey Robinson was put in charge of massaging the scheme to make it more attractive to companies. His innovations included:
i) Placing no limits on the level of profits to be made if financing suddenly became cheaper.
ii) Fewer risks were to be taken by the private sector with the public sector taking more. 15 kinds of risk were identified and each time one was detected a formula was applied to inflate the theoretical cost of the public sector alternative, thus making the bid more likely to be accepted.
Restraint by business soon turned into a rush of enthusiasm as the potential size of returns were calculated- in some cases margins of over 50%. The whole process was oiled by expensive consultants often brought in from KPMG, Deloitte and PwC. Ministers quoted ‘research’ showing nonPFI projects being 70% late and 73% over budget to make PFI seem more attractive. Craig calculates consultants stand to earn up to and over £5bn from PFI.

By 2006 PFI was central to the government’s strategy. Contracts worth £50bn had been signed with much more to come-see below. Taxpayers were committed to annual repayments of £7.5bn. Much of the repayments hit the NHS meaning current funding had to bear the annual cost of servicing the PFI debt. But similarly huge commitments have been taken on by Defence, Transport and Education

PFI: The Critique
Escalating Costs: Professor Alyson Pollock of UCL School of Public Policy has shown how costs increased dramatically from the ‘outline business case’ to the final figure: eg £90-£200m for the Norfolk and Norwich Hospital; Swindon Hospital from £45m to £148m.
Refinancing: Tarmac and Group4 noticed that money for PFI had become much cheaper as the markets realized PFI deals were so profitable. They were able to make £10.7m extra on top of the expected £17.5m they were anyway going to earn. In these situations the NHS receives back only a third of the ‘profit’ while the rest goes to the companies.
And even then they ‘receive’ it the form of reduced payments over future years. The PFI scheme for the Norfolk and Dartford Hospital produced windfalls of £33m and £115m with returns to investors of 56% and 60% respectively. Edward Leigh, Thatcherite chair of public accounts committee described it as ‘the unacceptable face of capitalism’. Certified accountant investigations into early PFI hospital projects 2000-2002 showed returns of 100% with similar ones for road projects. It showed how companies borrowed at 10% while public sector did so at 4.5% with the difference between the two covered by inflated risks carried by the private sector. British Medical Journal showed how ‘public sector comparator’ (PSC) was always cheaper than PFI figure until risk and optimism weightings were added when suddenly PFI looked marginally the better bet. And if they wanted the new service ‘it’s PFI or bust’ as Alan Milburn was quoted as saying when Minister of Health.

Poor Quality: Often hospitals were built with reduced bed space from what initially had been the plan. In addition faults were reported like sewage seeping into bathrooms and the temperatures reaching 110 Fahrenheit in the atrium of Carlisle Infirmary. Audit Commission reported in 2002 that the 25 schools it has inspected were ‘significantly worse’ and that PFI was not producing cheaper or quicker progress.

Unnecessary: Some hospitals were built to make money for constructors when old buildings could have been improved or refurbished. Kidderminster hospital was to be closed to make way for a PFI one of lower status but Dr Richard Taylor was elected to Commons to stop this. In the end his effort was over-ruled. Taylor complained re his trust having to pay back so much PFI money that wards were being closed.

Contracts: Prisons could be wholly privatized under PFI but costs cut through cutting wages of guards-30% less than the publicly employed ones- not through efficiency of building process.

Payments: Craig maintains that the arithmetic of PFI began to work to the disadvantage of the NHS.

‘Hospitals would compete for the ‘business’ of treating patients and be paid largely according to how successful they were in attracting the sick, while expenditure on huge PFI deals was fixed for a generation regardless of how much use they had for the facilities.’

Percentage National Debt: Writing in The Guardian 30/11/06, Kelvin Hopkins MP, questioned Brown’s ‘golden rule’ of an around 40% of GDP borrowing limit.

‘The latest available international comparisons from the OECD show that Britain has kept government borrowing (at 44% of GDP) well below that of the successful Scandinavian economies(Demark 53%, Sweden, 63%) and even further below those of major euro-zone countries (Germany, 68%, France, 75%). Us borrowing (64%) is also well above Britain’s and japan (156%) is off the scale. In some of these countries there have been economic difficulties, but none have experienced anything like economic disaster. For example Sweden’s rate was 18% above UK’s yet GDP in that country was 3.7% compared with 3.2% in UK. There is no reason why our government could not have borrowed far more for public investment instead of straining to keep investment in the private sector.’

Hopkins points to the illogic of using a device to limit public debt which increases the risk of current account deficits. Private has been more costly than public:

‘Private estimates suggest that the recent cost of track renewals is between four and five times what it was under public ownership.’ Hopkins calls for an abandonment of PFI and the reintroduction of ‘public borrowing as the basis of public investment’.

Chickens Home to Roost?
By the end of 2005 increasing numbers of trusts were running up unsustainable deficits. Queen Elizabeth Hospital Greenwich warned its deficit for 2005-6 could rise to £100m if its PFI burdens –which had increased costs by 300%- were not restructured. UC Hospital reported very similar things. Craig believed that Dept of Health had twigged PFI did not work by end 2005 and had halved prospective PFI deals signed off- a ‘reappraisal’ was being carried out. By this time 725 PFI projects had been signed with many more in the pipeline. But by then the total coast of schemes had increased to £140bn. Local authorities have plundered the PFI mechanism using it to fund street lighting, libraries and schools. After ten years of PFI Norman Lamont surveyed it and declared: ‘It was never intended to be a way of simply finding alternative finance and I think it is dangerous because the reality is that private finance is more expensive’. It is hard to avoid the conclusion that the Labour PFI initiative, borrowed and elaborated upon an original Conservative idea, has proved to be a monumental disaster to add to its other less than successful policy forays.

My seven deadly sins questionnaire

2007-01-08T18:49:00.001Z

Greed:	Low
Gluttony:	Very Low
Wrath:	Low
Sloth:	Very Low
Envy:	Very Low
Lust:	Medium
Pride:	Medium

Seems pride and lust are my achilles heels...but being so low on the others can't be bad.

Take the Seven Deadly Sins Quiz

Royal Progress for French 2007 Presidential Candidate

2006-12-05T11:35:00.000Z

France, Politics and the 2007 Presidential Elections

‘There is unrest on sprawling housing estates, economic stagnation, and unemployment that this spring led to the biggest street protests in decades’ Agelique Chrisafis Guardian, 18:11:06

Area: 545K square miles(Europe’s 2nd largest country)
Population: 63.3 million
Per capita GDP: $29.3,000
Ethnic: French, 93%, German 2%, Arab 3%, Breton 1%, Catalan 1%

History-early to 1969
Julius Caesar conquered Gaul 51BC but by the 3rd century the Roman Empire was declining and from 486 the Franks established the Merovingian dynasty but after Clovis I the kingdom fragmented and it needed the Carolingians in 687 to re-unite the country. Pepin III overthrew this regime and it was his son, Charlemagne who became emperor in 800AD. Norman conquest in 1066 initiated a long period of Anglo-French rivalry. By 1422 England controlled most of France, but, with the help of Joan of Arc, they had been expelled by 1453. France won the 30 Years War (1618-48) under Mazarin and Richelieu but it was Louis XIV who became the richest and most powerful king in Europe. But Louis XV and XVI ruled a bankrupted country led by an ancien regime which was overthrown by the French Revolution in 1789 with Napoleon crowned by himself as Emperor in 1799.

He established a Europe wide empire and transformed French administration but 1815 saw and end of his reign and the Bourbons were restored to the throne. After the 1848 Revolution set up the second republic and in 1852 Napoleon III, nephew of Bonaparte, was in control (Napoleon II ‘reigned’ for only a few months after his father’s abdication. His defeat in the Franco-Prussian War(1870-71) led to the 3rd Republic(1870-1940). France was the battle ground for most of the First World War and-after Daladier and Blum fai8led to cope with Hitler- was occupied by Germany 1940-44, under the Vichy government. The 4th Republic was declared in 1946 but it was unstable and damaged by colonial war. De Gaulle took over as president in 1958 and formed the 5th Republic. His influence was profound on domestic and foreign policies. He resigned in 1969

Political System
The 5th Republic established a unitary state comprising 96 metropolitan departments and 10 overseas. Corsica has its own elected legislative assembly.

Government
The president appoints the prime minister and the Council of Ministers (Cabinet) which is responsible to the bicameral parliament. The president is the most powerful politician in Western Europe with sweeping powers of appointment, legislative, emergency and dissolving of parliament powers. Usually the party of the president commands a majority in parliament but there have been periods of ‘cohabitation’ in 1986-8, 1993-5 and 1997-2002.

Presidency: From 1962-95 the office term was seven years but this was reduced to five in 2002. If no candidate obtains more than half the votes in first round a second ballot is held between the two leading candidates.

National Assembly: this has 577 members for metropolitan France and 22 for overseas depts. Single member constituencies via direct elections using second ballot if first one fails to produce an absolute majority. Five year terms.

Senate: 321 members with 296 for metropolitan France; 13 oversea and 12 for nationals abroad. Elected by electoral college comprising delegates from the national assembly, dept delegates and municipal authorities. Nine year terms of office.

History 1969-present day
De Gaulle’s accession was the prelude to some three decades of right-wing government in France; in practice this meant strong emphasis on national independence, centralized modernization and a heavy controlling hand on the media. It was not that surprising that Paris became the focus of extensive student leftwing riots in 1968 and workers’ strikes. George Pompidou, the prime minister of the autocratic general, took over until his death in 1974. Giscard D’Estaing won in 1974 but was not re-elected. In 1981 Francois Mitterand the socialist won and proceeded-with Communist support- to implement a series of social reforms:
• social policies:
o abolition of the death penalty;
o removal of legislation criminalizing certain homosexual behaviors: lowering of the age of consent for homosexual sex to that for heterosexual sex (since the French Revolution, France had never criminalized homosexuality between adults in private, but since the 1960s until this time, homosexuality was officially considered an illness to be cured);
• economic policies:
o the government embarked on a wave of nationalizations;
o the duration of the legal workweek was set to 39 hours, instead of the previous 40 hours. In February 2000 it was reduced by Lionel Jospin’s government to 35 hours.
By 1983 inflation was rising and austerity(rigeur) reforms were introduced and the nationalizations were reversed. Since 1983 there has been a series of different governments- socialists plus communists; plus the greens(Les Verts); rightwing coalition comprising Chirac’s Rally for the republic Party(RPR) which later morphed into th Union for a Popular Movement(UMP) and the Union for French Democracy.The 1980s and 90s also witnessed the emergence of the neo-racist National Front led by Jean-Marie Le Pen which blames increased unemployment and crime on immigration.
Chirac and Corruption: Chirac and his PM, Juppe commanded a huge majority in the National Assembly but became mired in accusatiuons of corruption scandals in the Paris region.Jacques Chirac was mayor of Paris from 1977 to 1995 and has been named in several cases of alleged corruption and abuse, some of which have already led to felony convictions.
Chirac, as current president of France, enjoys virtual immunity from prosecution for acts preceding his tenure as president, following from decision 98-408 DC of the Constitutional Council on January 22, 1999. This decision itself was highly controversial: the council was consulted on the treaty establishing the International Criminal Court, not about the status of the president with respect to the national criminal justice system. At the time, the president of the council was Roland Dumas, who later had to retire from his functions because of his implication in the Elf Aquitaine scandal.
On October 10, 2001, the Court of Cassation ruled that, while the president cannot be prosecuted by normal judicial means during his mandate, such an impossibility suspends the delays of prescription (statute of limitation). If Chirac does not run for office again in 2007 or is not re-elected, he may then be prosecuted on the several affairs he is involved in. [This might explain why in 2003 some in the presidential entourage floated around the idea of Chirac running for a third term.]
Chirac called elections in April 1997 and the socialist, Jospin won a majority in the Assembly. Jospin became PM with the support of the Communists and the Greens. Jospin insisted ‘co-habitation’ cover foreign as wll as domestic policy and worked surprisingly well with Chirac until he was decisively beaten in the 2002 presidential elections when Jospin was defeated into third palce in the first round of voting. Chirac now appointed Jean-Pierre Raffarin as PM but lost much credibility when voters turned down the draft EU constitution 29 May 2005. Dominique Villepin, formerly foreign minister, was appointed in his stead.
French Economy: France has many economic advantages: large argricultural sector; big industrioal base; and a highly skilled workforce(28m). The service sector comprises 74% of the workforce with agriculature on 3%. GDP growth was only 2% p.a. in late nineties and was 1.6% in 2005. Unemployment is 9% but is concentrated in ethnic minorities who live in suburbs- a cause of the riots in autumn 2005. Poverty, however, is relatively low at 6% compared with 15% in UK and 18% in USA. France has the 6th largest economy in the world and the third largest in Europe.
Following the start of the 5th Republic there was a period of ‘dirigisme’ entailing state control of transport, energy and telecoms. Once Mittereand came to power he foreced through even more state control including nationalization many industries and banks. But these changes were perceived as failures and a subsequent period of ‘rigeur’ followed with some privatizations. However, at 53%, France has the highest level of government spending in the G7. Labour conditions and wages are highly regulated and the government has shares in all major industries and enterprises. The Minimum wage is currently 8.7euros per hour. Employment law is very restrictive and Villepin has tried to introduce changes to help employers take on new workers, especially young ones. Howeveer, even his mild reforms provoked street demonstrations and he was forced humuiliatingly to back down. Moreover, unemployment remains stubbornly high and imposing new contracts on workers has encountered resistance frompublic sector unions and students who have organized strikes and demonstrations.
Because of consistent annual budget deficits the government has sought to cut public expenditure and welfare spending but this has only added to its unpopularity. The widespread urban riots in the autumn of 2005 – mostly by young second generation unemployed immigrants – added to the sense of malaise and a government at the end of its energy and authority. The Economis t(18/11/06) judged that whoever won the forthcoming election ‘will face a faltering economy’. In the three months to September 2006 growth was zero. Morgan Stanley’s chief economist for Europe judges that the French economy will soon drift even lower as it has lost competitiveness within the euro zone to German and Italian companies. He believes the minimum wage is too high and that the 35 hour week prevents firms staffing back offices and customer service centres. However the Parid stock market is strong and top companies make 80% of their profits abroad.
Comparison with UK
Annual Growth: UK 2.8% France 1.9%
Unemployment: UK 5.6% France 8.8%
Tax Burden: UK, 37.2% France, 44.3%
GDP per head: UK £16, 100 France, £15,400

Presidential Elections 2007
Socialists: Following their appalling showing in the 2002 elections many had written off the socialists and the oparty of Blum and Mitterand seemed in near permanent decline. However, their depression has recently lifted, not just because of the failing popularity of Chirac’s regime but also through the emergence onto the scene of a shining new star:
Segolene Royal: she was born in Senegal into a military family. Her Catholic colonel father was a strict disciplinarian who did not believe girls should be educated, applied physical punishments and shaved the heads of his sons. There was no heating or hot water in their house. He treated his wife so badly she ran away from home. Being female, the young Marie-Ségolène had to struggle with her father to continue her studies through high school, though she ultimately prevailed. Much to his surprise, she was admitted to the Institut d’Etudes Politiques, an elite university. In 1972, at the age of 19, Ségolène sued her father because he refused to divorce her mother and pay alimony and child support to finance the children's education. She won the case after many years in court, shortly before Jacques Royal died of lung cancer in 1981. Six of the eight children had refused to see him again at Ségolène's insistence. She then studied at the legenday Ecole Nationale, home of the ‘enarques’ who have traditionally ruled France for generations. There she sipped coffees with Dominique Villepin, the handsome, aristocratic poet, future foreign minister not to mention prime minister. She also met Francois Hollande, the future leader of the Socialists and her husband and father of her four children. She began her career as a judge(conseiller) but was soon spotted by the senior socialists and given a job working for Mitterand. She served as minister in Jospin’s government- Environment and then Education- and was clearly ambitious for higher things.
In March 2004 she was elected president of the Poitou-Charantes region; her ‘laboratory’ as some have called it. Here she initiated her socalled ‘listen to the people’ approach focusing on family issues, the welfare state, the environment(biodegradable plastic bags, reneewable energy sources etc), and loosening her party’s attachment to the 35 hour week. In practice, however, she has undertakehn a highly successful ‘branding’ operation in which she has exploited a celebrity image. Her fights against her bigotted father won the interest of a public bored with conventional politicians- though her own background is quintessentially conventional of course. The photographer who snapped her in a bikini during the summer was technically breaking the law on privacy but Royal did not sue and the photos helped advance her campaign to become president. She has also aimed to dominate the news pages with classy clothes and appearances on television. In April she published ten chapters of her book on the internet to lay the foundations of her bid. With both main parties using primaries to select candidates the rules have subtlychanged to become more ‘US’ style. By August she had established momentum and a poll showed her receiving 47% support with her nearest challengers were way behind already: Her closest competitor, former Prime Minister Lionel Jospin (who would later quit the race) received 21%, Dominique Strauss-Kahn 16%, Jack Lang 12% Laurent Fabius 9% and her husband, François Hollande 8%.
She made much of the male dominated aspect of french politics, especially in her own party and there was some evidence of her rivals seeking to discredit her candidacy on male chauvinist grounds. ‘Who will look after the children?’ asked Laurent Fabius, when he learnt she was running. Dealing with the French ‘malaise’ will be very dificulat for whoever wins but and she has eschewed specifics. However she has spoken out against out sourcing suggesting that companies who do so might have to repay state aid received in the past. On social policy royal is relatively tough talking about sending young offenders to ‘boot camp’ and their parents to ‘parent school’. In addition teachers were horrified when she had the temerity to suggest they might work their full 35 hour week instead of moonlighting as private tutors. Her passion for open government has been pioneered in her own region where the deliberations of the assembly have been made open to the public. She also urges ‘cirizens juries’ to monitor elected officials. She claims that as president she would be less extravagant than the imperial Chirac and more transparent.
At the nomination convention-for the first time a US style primary- Royal was triumpahant winning 61% of the votes of party members, with 80% even in the constituencies of her opponents. Extraordinarily, she was a complete outsider, not even sitting on the party’s 54 member contolling board. A crucial factor in her victoryb was the pools showing she would beat Sarkozy in any election and hence the favoured candidate of the right.
Nicolas Sarkozy: Born 1955 of a Hungarian father and a French mother. His afather was ffrom the minor aristocracy who fled at the end of the war, joining the Foreign Legion for five years. He entered the advertising industry where he met his wife of Jewish extraction. He later left his wife and refused to provide financial help, despite being wealthy. He says his humilkiations because of his father made him determined to succeed. He was only a mediocre pupil at school but gained a degree in law and practiced for some years. His first wife was Corsican and they had two children but they divorced and he married the more galmorous Cecelia Ciganer-Albariz, of Rusian extraction. They became quite a feature on television shows, unusually for political marriages in France at that time. However, in 2004 she left him because of his claimed infidelity with other mistresses he is supposed to have met while jogging in the parks near their home. He began his political career as a cxouncillor then mayor of Neuilly sur Seine, a wealthy suburb of Paris. Afteer intervening dramatically in a hostage crisis he entered the government of Balladur even though he had ben seen hitherto as a protégé of Chirac. His patron was furious when he went on to support Balladur in the 1995 presidential elections. Both men are now believed to laothe each other. However he was brought back into government by Chirac and has cemented his palce at the head of the UMP, making no bones about his intention of standing for the top job next year. As Minister of the Interior Sarko was the most popular politician in France and third most important behind Villepin and Chirac. The left criticise him as a populist demagogue and he has many critics in his own party who9 feel he is too authoritarian, almost racist on occasions and blkind to civil liberties.
However Sarko is a brilliant politician with great gifts of communication and as an administrator. His style is glitzy and American and he has no scruples about using his children as symbols for his policies. He has promised to obverhaul france’s ‘social model’ but has shown protectionist instincts over trade. He is opposed to so much state intervention but is mindful of the popularity of the welfare state with excellent social services and good benefits. But as he in on the right he seeks to make his country more competitive. Seeks to deregulate labour market by reducing the money employers have to pay the state foir their employees. Claims he would streamline bloated bureaucracy. Wants to reduce immigration but favours ‘positive discrimination’ for ethnic minorities. In some polls he is running 50-50 with Royal; in others she is 6 points ahead. Villepin has said he might run against ‘the dwarf’ but has not yet announced his decision. But trhere may be a woman candidate as well.
Michelle Alliot-Marie- Defence Minister: is a late entrant to the stakes. An attractive 60 year old, she has an outdoor, active image. As well as being a native of her country she also matches Royal in terns of gender. She is a clever politician who has realised being a woman right now in France is a big advantage- men find it hard to attack women politically. Expert at using her charm to get her own way, she has ben a successful minister of defence. She is favoured by many who hate the diminutive ‘Sarko’.

Iranian Politics and Foreign Policy

2006-11-23T11:35:00.000Z

Iran: An Enigma Wrapped in a Riddle?
Area: 1.468,000 square miles(17th largest country in world- one 5th size of USA)
Population: 57million
Ethnic Groups: Persian, 46%; Azerbaijani, 17%; Kurdish, 9%; Gilaki, 5%
Language: Farsi
Religion: Islam, 99%.
Borders: Armenia, Azerbaijan, Iraq, Caspian Sea, Afghanistan, Turkmenistan, Turkey & Pakistan + Persian Gulf and Gulf of Oman.
Climate: arid or semi-arid with low temperatures in the north and higher rainfall in the west.
History:
Known as Persia until 1935, Iran has an ancient history going back 2000 years when the Aryan people first settled there. The first great king was Cyrus the Great more than 500 years BC but in 331 BC the Persian Empire fell to Alexander the Great- and then was restored in 224AD. Islam was introduced when Arabs took over the land in 641 after which Persia became the centre for Islamic art and architecture. The Seljuk Turks conquered in 11th century but- oh so inevitably- the Mongols swept them away in 1220.
The Safavid dynasty was founded in 1501 by Shah Ismail along with the Shi-ite form of Islam. Nadir Shah expelled the Afghans and was noted for his despotic rule (1736-47). The Qajar dynasty (1794-1925) saw the gradual decline of the of the empire in the face of challenges from Europe. The discovery of oil saw Russia and Britain dividing up the country in 1907 and in 1919 it effectively became a British protectorate.

In 1921 Reza Khan seized power via a military coup and established the Pahlavi dynasty; he was elected shah in 1925 and set about modernizing his country. In 1941 Britain and USSR invaded and occupied. Reza abdicated in favour of his son Muhammad Reza Pahlavi; he tried to introduce reforms after the war but the elections he set up were mostly crooked and government unstable. In 1951 the British owned oil industry in Iran was nationalized by the nationalist Mossadegh via the Abadan crisis and the shah fled; he returned in 1953 with US backing and restored western oil rights. The western consortium was allowed to extract and sell Iranian oil. The profits were to be shared 50-50 but the Iranians were not allowed to audit the books of the consortium or to have anyone sitting on the board of directors.

In the 60s the Shah was reformist, giving women the vote and reforming land ownership. However such reforms did not still discontent at ‘westernization’-rather they intensified religious objections- and growing economic inequality; the secret police-SAVAK- suppressed open dissent with some 13,000 believed to have died as a result. Ayatollah Khomeini-having been exiled in 1964- opposed secularization from the vantage of Turkey, Iraq and France. Iran was the largest military power in the region but internally the shah’s position was weakening. In 1979, after recurring street opposition, the shah fled and Khomeini established an Islamic Republic hostile to the west and of which he became Supreme Leader. In 1979 the oil industry was again nationalized.

Islamic Revolution
In 1979 militants seized control of the US Embassy and held 52 hostages for over a year. President Carter tried to free the hostages in April 1980 but the helicopter operation was a fiasco. In September 1980 Iraq invaded and the war with that country began; it was destined to last eight years, and claim half a million lives. The west mostly backed Saddam Hussein, the vicious Iraqi dictator, as the lesser evil compared with Islamic revolutionaries who had humiliated Washington and supplied him with arms, including ingredients for the chemical weapons which killed thousands of Iranian soldiers and civilians. Saddam was keen to exploit the weakness of the country after the revolution and make himself the dominant force in the region as well as possibly the controller of Iranian oil supplies.

Official U.S. policy sought to isolate Iran, and the U.S. and its allies supplied Iraq with weapons and technology to maintain a balance in the war. Iraq obtained most of its weaponry from the USSR, the Chinese, and the French. Members of Reagan’s government covertly sold anti-tank missiles and spare parts to Iran in what became known as the Iran –Contra Affiar. Iran finally agreed to UN Security Council Resolution 598 in 1988 to end the bloody war. Nonetheless, severe fighting continued into the 1990s as Kurds(nationalist and communist) forces fought the Iranian government. At times, large parts of the western parts of Iran were without government control.

Supreme Leader of Iran- currently Ayatollah Ali Khomenie
SLI responsible for the ‘general policies… of the Republic’. He is C in C of the armed forces, controls intelligence and has the power to declare war. He appoints heads of judiciary. Broadcasting, police and military commanders plus the 12 members of the Council of Guardians(GC). The Assembly of Experts is a congressional body of 86 ayatollahs which elects the SLI(for life) and supervises his activities. Members are elected for 8 year terms via direct public votes.

The Assembly requires all its members be experts in Islamic jurisprudence, thus enabling them to to judge the activities of the SLI, to make sure he does not break Islamic rules and is doing his his duty according to the constitution. This law is being challenged by the Reformists, and their 2006 election campaign includes changing this law to allow non-clerics into the assembly, and reversing the law that allows the GC to vet candidates. The candidates are subject to approval of the Guardian Council. Currently, the average age of its members is over 60 years, which results in many mid-term elections. The next election is due to take place December 15, 2006. The meetings and the meeting notes of the assembly are confidential.

The Executive
After the SLI the President is the most senior state authority- elected by universal suffrage for a period of four years. The GC has to approve candidates for the Presidency to ensure they hold views consistent with the Islamic Revolution. The president is responsible for the day to day running of the state subject to the judgement of the SLI. The president appoints and runs the Council of Ministers which is a bit like an extended Cabinet. He has 8 vice presidents under him and a cabinet of 21 ministers.

Legislature: This is tricameral in nature.
Council of Guardians: comprises 12 jurists six of whom are appointed by the SLI, the remainder being recommended by the head of the judiciary (who is also appointed by the SLI) and confirmed by parliament.
Expediency Council: has authority to mediate disputes between the GC and Parliament and is an advisory body to the SLI.
Assembly of Experts: is a congressional body of 86 ayatollahs which elects the SLI (for life) and supervises his activities. Members are elected for 8 year terms via direct public votes.
Parliament: The Majles comprises 290 members elected for four year terms. It drafts legislation, ratifies treaties and the national budget. All candiates must be approved by the GC.
Judiciary: SLI appoints the head who in turn appoints the Supreme Court and public prosecutor. There are public and revolutionary courts, the latter dealing with national security and for which there is no appeal procedures. There is also the Special Clerical Court for clerics, accountable only to the SLI.

Economy: This is a mix of state planning and ownership plus privately owned business and small scale agriculture. Infrastructure has been steadily improving over the last two decades. The service sector employs the most people followed by industry- mining and manufacturing- and agriculture. Nearly half of government revenues come from oil and gas revenues with a third from taxes. GDP was $2.5K per capita 2005 (compared to $25K in USA). The UN defines it as ‘semi-developed’. Iran is keen to encourage investment and has tried to reduce impediments to trade. Her major partners are China, Syria, India, Venezuela, Russia, Germany and Italy. Iran is OPEC’s largest oil producer exporting 3 m tons of oil a day and has 10% of the world’s confirmed reserves.

Iranian Domestic Politics: Reformists V Conservatives
Following the Islamic Revolution politics in Iran have been, unsurprisingly, dominated by religion. The constitution, giving huge power to clerics but also involving popular elections, seemed to have bedded in by the mid nineties but with the passage of time the authority of the SLI has reduced somewhat and the more pragmatic politicians running government have acquired more power. Overlying this formal power relationship has been a tension between the reformists-mostly now out of power- and the conservatives-mostly in power. Initially the moderate Rafsanjani became president 1989-1997; Khatami won the presidential election in 1997(he was re-elected in 2001) and his supporters won a majority in the Majles elections too.

He was opposed by the conservative SLI, Khamenie, together with many other conservatives embedded into the power structure. In debates before that election, Khatami sought to claim legitimacy for reforming views by relating them to Khomeini and a ‘continuation’ of the revolution though advancing democracy as the revolution always relied ‘on the opinions of the people’. The conservatives disagree and claim the reform advocates see a separation between politics and religion; they claim adherence to the principle of ‘the clerics rule’. Liberalism, by being more open will ‘serve the enemies of Islam’ by letting in hostile views. Khatami believed Iran should have good relations with all countries, including USA and denied any secret links between the reformists and America. Hashemi, on the other hand was opposed to ‘establishing relations with the US because of the suffering of the Iranian people at the hands of the USA for the last five decades.’

This gulf between the reformers and the conservatives continues but the former took a bit hit in June 2005 when the ultra-conservative former mayor of Teheran Mahmood Ahmadinejad (MA) beat Rafsanjami’s bid to be president for a third term. Commentators predicted an end to the social reforms made to date by his two predecesors and a hardening of attitudes regarding foreign policy and the subject of nuclear power. Of 13.3 million votes cast MA had garnered 61.6%. Turnout was 47%, well down on the 63% who voted in the first round. It seemed MA’s appeal lay in his modest lifestyle and pledges to tackle corruption. Poor people voted massively for the 48 year old conservative nationalist. Rafsanjami, aged 70, who wanted better relations with the west, accused the hard-line militia, Basij, of intimidating voters. AM said relations with Washington were unimportant; he is seen as extremist while the SLI, Khameini, is more pragmatic. Spokesman for International Crisis Group, Karim Sadjapd predicted a divided nation as both candidates were polarizing figures. Rafsanjani supporters said they feared a return of curbs on women wearing clothes judged to be too revealing or on couples being arrested for fraternizing in public.

The Guardian ran a story 20/11/06 that fundamentalists in Iran are demanding separate classes for men and women in a drive to impose Islamic values throughout the university system. This has happened as figures show women outnumbering men on campuses. The cleric heading the state body running higher education said universities were becoming too much like ‘fashion shows’ where ‘the moral situation is offensive’. Large numbers of lecturers have been forced to retire after the president demanded a purge of liberal and secular lecturers. Already Islamic laws require men and women to sit in separate rows in classes and lecture halls. One senior cleric warned that a ‘free environment’ could cause ‘wives leaving husbands to marry other men’.

Foreign Policy and the Nuclear Issue
Traditionally Iran was pro-west and USA but the swing to the religious right changed all that. Iran has no relations with USA or Israel and is skeptical on the Middle East Peace Process. Ahmadinjehad went on to cause great concern when he called for Israel to be ‘wiped off’ the face of the earth. Relations with the EU have been better; Khatami visited Italy, France and Germany in 2000 and Austria and Greece in 2002.

Royal Institute of International Affairs Report, August 2006
The RIIA report blamed strategic errors by Bush for the current dominance of Iran in the region. The removal of two rival centres of power in Kabul and Baghdad has left the field open for Iran to become the main centre of power in the area. ‘Iran has been the chief beneficiary of the war on Terror in the Middle East’ says the report. Even the militia activities in Iraq’s cities strengthen Iran through the contacts they have with them. The RIIA report sees Iran as a necessary force to ‘douse many fires currently alight’; maybe an optimistic hope with such a firebrand president.

Iran and Hezbollah
Hezbollah is a Shia Islamist militant organization in Lebanon which follows the teachings of the Ayatollah Khomeini of Iran. It was founded in 1982 with the aims of: making Lebanon an Islamic state; overthrowing western capitalism ihn Lebanon; and overthrowing Israel. Given the difficulty of the first two aims Nasrallah has tried to make his movement more Lebanon friendly. Hezbollah has received arms, funding and training from Iran and other Arab states and has ‘operated with Syria’s blessing’. It now has seats in Lebanon’s parliament plus its own broadcasting arm. The west describe the movement as terrorist but many other counties do not and list it as a ‘resistance’ movement. Its summer war with Israel cost much in terms of life and Lebanese infrastructure but, despite the fact that Hezbullah initiated the conflict, and it involved heavy losses on both sides, it was perceived as a victory over the hated Israelis and celebrated throughout the Arab world. A leading Lebanon cleric, quoted in The Economist gave an insight as to how USA and its allies are perceived when he said: ‘This was an American war carried out by Israel to execute arrogant American plans to establish political, economic and military hegemony over the entire region’. An Iraqi poll revealed that 90% would not live next door to an American while two thirds believed US invaded Iraq to gain oil, build military bases and help Israel. Televised pictures of the US in Iraq looked ‘so much like Israelis stomping on Palestinians that many Arabs and Muslims grew simply to equate the occupations as twin assaults on their turf.’ Guatanamo and Abu Ghraib ‘merely silenced America’s remaining fans’. By offering people the option of being either ‘for us or against us’ Bush was pushing the fence sitters into the opposition camp.
Regional Policy
Patrick Clawson of the Washington Institute for Near East Policy sums up Iranian regional foreign policy attitudes thus
"A strong sense of history pervades Iran. Many Iranians consider their natural sphere of influence to extend beyond Iran's present borders. After all, Iran was once much larger. Portuguese forces seized islands and ports in the 16th and 17th centuries. In the 19th century, the Russian Empire wrested from Tehran’s control what is today Armenia, Republic of Azerbaijan, and part of Georgia. Iranian elementary school texts teach about the Iranian roots not only of cities like Baku, but also cities further north like Derbent in southern Russia. The Shah lost much of his claim to western Afghanistan following the Anglo-Iranian war of 1856-1857. Only in 1970 did a UN sponsored consultation end Iranian claims to suzerainty over the Persian Gulf island nation of Bahrain. In centuries past, Iranian rule once stretched westward into modern Iraqand beyond. When the western world complains of Iranian interference beyond its borders, the Iranian government often convinced itself that it is merely exerting its influence in lands that were once its own. Simultaneously, Iran's losses at the hands of outside powers have contributed to a sense of grievance that continues to the present day."

Within Iran itself globalisation and the beakup of the USSR has encouraged some separatist sentiment. Following an unflattering cartoon’s appearance in the newspaper Iran, Azeris- quite a big portion of the population- demonstrated all over the country, with many eventually being arrested and imprisoned. Eventually the paper’s editor had to apologize but the Azeris’ demand that the SLI do the same was not met. The eadership attributed the events to western interfence and indeed some neocons have been enthusiastic about making contacts and assisting ethnic minorities.

The Nuclear Issue
In 2003 the EU built on its better relations with Iran when France, Germany and the UK persuaded Iran to cooperate with the IAEA and not to proceed with enriched uranium. However, as conditions in the area went from bad to worse and as Iran’s politics swung towards the Islamic right, things deteriorated. In August 2006 the IAEA reported doubts about Iran’s claims that it was only interested in peaceful uses of nuclear power; inspectors had been unable to confirm ‘the peaceful nature of Iran’s nuclear programme’.
The Security Council pronounced Iran had to comply with its rulings but it was ignored. MA has refused to be ‘bullied’ by the west and says his country needs nuclear power and will not convert to weapons. The UN is trying to offer inducements like membership of the WTO and threatens economic sanctions. Blair and Bush have threatened ‘isolation’ if Iran does not comply but maybe it is these two beleaguered leaders who are already isolated from the rest of the world.

Anatole Kaletsky in Times 16/11/06
This Times columnist saw a parallel in the current situation with Nixon’s breakthrough with China in 1970. ‘Could James Baker be the Kissinger for President Bush?’ To effect this Bush would have to eat humble pie and accept he is the supplicant, ‘just as Nixon did when he went to China’. It would need the end of the ‘axis of evil’ approach, the end of ‘regime change’, lifting economic sanctions and a ‘formal guarantee of non-aggression.’ It would also be necessary to make concessions on nuclear side, maybe even accepting Iran as part of the nuclear club.
Such a move would split the theocratic world, strengthening the shias against the sunnis of Saudi Arabia who have supplied most of the terror personnel. Iran has an educated population which would integrate well in the west. Israel would lose out though and have to make concessions to the Palestinians; maybe making Jerusalem a jointly run multi-faith city.

Henry Kissinger Sunday Times 19/11/06
His article addresses the question of the nuclear issue in the current political situation. He points to the offer made by the Security Council ‘six’ to Iran but sees Iran gaining prestige in the region from resisting the west. US has not taken part in the talks but Rice has offered to as long as Iran suspends uranium enrichment. Iran has found this defiant attitude popular at home and reinforces of ‘shaky domestic support.’ HK thinks military action ‘extremely improbable during the final two years of a presidency facing a hostile Congress. But Tehran cannot ignore the possibility of a unilateral Israeli strike.’ However, in the meantime, Iran sees itself as leading the Shi-ite belt of power in the Middle East; maybe this explained his attitude of ‘Don’t talk to me about your world order, whose rules we did not participate in making and which we disdain. From now on, jihad define will the rules.’

Iran may help US withdraw in the short-term but only in order to turn it into a ‘long term rout.’ Iran might be influenced by a structure in the region which makes imperialist policies unattractive or the worry that USA might yet strike. HK suggests Iran might be satisfied with a respected regional place of power and welcome concessions in the Palestinian dispute. ‘Iran needs to be encouraged to act like a nation, not a cause.’ He advises US to redeploy but not so that exit seems imminent as this will hasten a collapse.

Iranian Initiative 20th November 2006
James Baker is expected to recommend, in the report of his Iraq Study Group, that Syria and Iraq be involved in regional diplomatic discussions to seek and end to the Iraq instability. Maybe it was both to pre-empt this expected outcome and advance its own role as the regional strongman that Ahmadinejad has suggested trilateral talks with Iraq, Syria and themselves this coming weekend. All three countries have had delicate relations in the past: Iran at war with Iraq; Syria taking Iran’s side in that war; and Syria being criticized by Iraq for allowing up to a 100 insurgents through their borders every month. VP Cheney is now isolated as the only big player in the White House who favours ‘staying the course’ and even using force against Iran but such have the travails been with the invasion that neither option now seems viable.

Bush Biffed by Voters

2006-11-19T10:56:00.000Z

Mid-Term Election Results Analysed and their Significance Considered

The Results Analysed
The Democratic victory in the mid-terms should not be regarded as all that astonishing as after six years in power most presidents manage to alienate/ annoy/bore a fair number of US voters. Nevertheless winning both houses of Congress is still an unusual feat and, given Bush’s so called ‘political genius’ Karl Rove’s dream of making America a one party state for a generation, this ranks as a major defeat for George Bush.

Senate: 2004Republicans-55 2006-49
2004 Democrats- 44 2006-499plus 2 Independents
House of Representatives
2004 Republicans-232 2006 203
2004 Democrats 202 2006-232
Gender
Democrats
Men 2004-44% 2006-52%
Republicans
2004-55% 2006-45%
Democrats
Women 2004-51 2006-57%
Republicans
2004-48% 2006-42%

Whites
Democrats 2004-41% 2006-49%
Republicans 2004-58% 2006-50%

Race: African American –Democrats 2004-88% 2006-88%; Republican 2004-11% 2006-12%

Hispanic: Democrats 004-53% 2006-72%; Republicans2004-44% 2006-27%

Religion:WhiteEvangelical Christian:Democrats2004-21% 2006-29%;Republicans2004-78% 2006-70%

Regions (2006): West: Democrats-54% Republicans-43%; Midwest Democrats-52% Republicans-47%; South Democrats-45% Republicans-53% North East Democrats- 63%
Republicans-35%.

In just about every category Bush’s party received the ‘thumping’ he ruefully mentioned in his comments after the results came through. Only African Americans showed an increase d confidence in him –up from 11 to 12%; and only the South as a region gave him a decent majority vote. Religious support still indicated a majority for Bush but the numbers were significantly down. Maybe the biggest transformation was in the women’s vote where the democrats won by 57% to 42%- quite astonishing. The House of Representatives’ strength has reversed its majority from 232 for the Republicans to the same number now for the Democrats. The damage in the Senate was limited to an equal tally of 49 seats but: two independents are to vote with the Democrats and the Republicans, astonishingly, lost the solidly ‘red’ cowboy state of Montana and the key state of Virginia where the once presidential hopeful George Allen was defeated by former Republican national office holder, Jim Webb. This contest, recall was characterized by Allen attempting to smear Webb by quoting sections of his novels and claiming they indicated he was in favour of rape and incest. Allen had sustained a self inflicted wound early on in the campaign by describing Webb’s dark skinned aide as a ‘macacca’, a racist term from North Africa where Allen grew up.

Results in Historical Context.
Democrats gained more seats than in any elections since the mid-terms after Watergate in 1974. Only three times-1932, 1952 and 1994 has either party taken both houses at a single election. Only one of those- Republicans in 1994, were in the mid-terms. To cap it all Democrats did not lose a single seat of their own, in either house or in governor elections. They now enjoy a bigger majority in the House than the Republicans have ever had in 12 years in control. This was indeed a watershed election like 1958 when Ike lost so many seats and ushered in a period of democratic dominance; 1966 during the Vietnam war when the Republicans began their recovery; 1974 the Watergate election; and most recently in 1994.

Bush and His father Fixation
Clearly among the key issues in the election were: most importantly Iraq; corruption, the economy, immigration and the issue of Bush’s leadership itself. Andrew Sullivan wrote a perceptive article in the Sunday Times 12th November suggesting that Bush’s motivations can only be understood in terms of his love for and yet rivalry with his father, George Bush senior. He reveres his father-giving up the drink when he felt he might be shaming his father- yet seeks to prove himself by outdoing him. So we see him invading Iraq to ‘avenge’ his father’s failure to remove Saddam yet appointing Rumsfeld, a man his father thought, according to Bob Woodward’s excellent State of Denial, ‘arrogant, self important and Machiavellian’. The irony is that his father was wholly opposed to W’s Iraq war but kept out of this and other issues as he did not think it his place to interfere. Another irony is the W has now begun to appoint his father’s close associates to positions of power: James Baker to find a way out of the Iraq mess and Robert Gates to implement it.

How the Democrats did it
Karl Rove’s aura of invincibility has been shattered by the recent defeat and it was two Democrat strategists who attracted the plaudits
Rahm Emanuel, representing a Chicago seat Congress since 2003, has been credited with a huge role in the Democrat victory. A doctor’s son and former ballet dancer, he worked as a Clinton aide before entering politics himself. He masterminded the raising of £108m, equaling the Republican war-chest and carefully supervised candidate selection to ensure they were likely to have a chance in a US political culture which has shifted rightwards in recent years.

Charles Shumer, is the fellow new York Senator with Hillary Clinton. He did something similar to Emanuel, for the Senate races, introducing a ’24 hour’ rule whereby any attack from the Republicans was immediately rebutted.

Blue Dog Coalition
This was set up in the Democratic Party in 1994 comprising social conservatives-typically anti-gay marriage, abortion and gun control- in order to represent such views in the their party. In the 2004 elections Blue Dog candidates were quite successful and a raft of them were offered in2006, 27 getting elected, winning the soubriquet ‘Blue Pups’. The fact is that America has swung to the right in terms of political culture in recent years and the Democrats have been forced to tack to the right to stand any chance against the party of Bush and his religious evangelical supporters.
The Times 9th November sees this Blue Dog tactic as a means of Democrats approaching mid-west and southern contests in the 2008 presidential election. Jim Tester, for example, who won in Montana, is anti-abortion, pro-gun, three generation farmer who does not like Hillary Clinton. Others are firmly protectionist economically also to garner support in area of falling employment. As for Bush he will find a possible torrent of criticism from republicans who had held their tongues before the vote but will now take him to task. It will be a tough two years for him.

Nancy Pelosi and Bush
The Congresswoman for San Francisco is likely to be the most leftist Speaker of the House of Representatives there has ever been as well as being the first woman. A chastened George Bush, in the wake of the results, spoke of the need to seek out the ‘common ground’. Pelosi replied in conciliatory terms of the need for a ‘bipartisan’ approach and a new ‘civility’ in US politics; she looked forward to a ‘partnership to end the war in Iraq’. Harry Reid, the new Democratic Senate majority leader said similar things.
Within an hour of Pelosi saying new civilian leadership was needed in the Pentagon, Rumsfeld was sacked. Some Democrats have spoken of wanting to impeach Bush but Nancy has squashed that idea. Inquiries are another matter and Iraq will not be excluded e.g. $20bn allocated to reconstruct Iraq has just disappeared and many wish to find out what has happened to it.
Nancy Pelosi has attracted much flak from the right as an elitist Californian liberal who wears designer clothes and who will raise taxes, threaten national security and had her eyes on the White House. But she has proved a strong Congressional leader who has avoided unnecessary fights and, leading from the centre, brought unity to the divisive party in Congress.

Democrat Agenda
1. Iraq: press for an exit timetable; Bush ‘open to ideas’ and will welcome Baker’s ISG report.
2. Inquiries: likely into faulty intelligence and corruption in Iraq.
3. Climate Change: Democrats favour comprehensive policy while Republicans argue for ‘energy efficiency’.
4. Immigration: Bush will seek Democratic agreement on guest worker programme and on border patrols.
5. Minimum wage: Bush agreed to raise it to $5.15.
6. Stem cell research: Democrats want federal funding while Bush opposes.
7. Democrats can initiate bills in Congress and Bush can always veto them but to get his own legislation through he will need to compromise and take a much more bipartisan line.
8. The new chairmen of the key foreign affairs committees are both committed to a multilateral approach to foreign affairs so a new approach is likely.
9. Backing up this point, Democrats are likely to throw out any further attempt to ratify John Bolton as US ambassador to the UN, a body which he has suggested should be disbanded.

Implications for Presidential Race in 2008
The elections have had quite an impact on the presidential plans of both big parties. Hilary Clinton has built up a formidable warchest and shown by her relentless campaign- winning by 2-1- that she is the person to beat for the Democratic nomination.
Barack Obama: the Chicago Senator has revealed his own talent plus his charisma and is clearly a potential competitor for Hillary. But he is young as yet and maybe it is too soon for a black US president.
John Edwards- who fought with John Kerry in 2004 did himself no harm with a spirited campaign, and he is from the south, but he is perhaps too associated with past failure to win the nomination. The same can be said of Kerry who some say wants to run again.

Rudolph Guliani: Former Mayor of New York who was a hero during 9-11 and brought crime down dramatically but his personal life has been perhaps a little too colourful and he is pro-choice on abortion.
John McCain: Former Vietnam war hero of well known liberal leanings but favours more troops for Iraq and is quite old at 70 for the top job.
Mitt Romney: Governor of Massachusetts and popular with rightwing conservatives but is a Mormon.

Limits of the Victory
1. Over the last century, in the mid-terms, the president’s party has lost on average 32 seats in the House and six in the Senate; precisely the case this year.
2. Clinton lost disastrously in 1994 but went on to win in 1996.
3. The polls suggest this was not really a ‘paradigm shift’ election. It was a protest against Bush in Iraq and the scandalous behaviour of his party in Congress. But Bush will not fight another election and republicans are now in opposition.
4. Gerard Baker in The Times (9/11/06), points out that the Republicans have some promising candidates for President in 2008 but: i) they have lost their dominance on national security; ii) Democrats are now fielding less leftwing candidates; iii) Democrats did well in areas where population is shifting and expanding.
5. Former Bush speech writer, David Frum, writing in the Sunday Times 13/11/06, said:
6. a) ‘America remains a very, very conservative country’. In a blizzard of bad news the GOP lost only half the seats the Democrats lost in 1994 and the senate only just went the challengers’ way.
b) And the new boys are much less liberal than previous influxes in 1974 and 1986.
c) Gun control was scarcely mentioned and gay marriage opposed by all but the safest democrat incumbents.
d) polls still show nearly half respondents favouring a military strike on Iran.
e) rather as in the Korean War, which did not change anti-communism, Iraq has not reduced opposition to Islamic extremism.
7. The Economist (11/11/06) points out that a hobbled USA is not necessarily such an advantage in that:

‘The radical Islamists and rogue states who wish America harm are no more benevolent when it comes to the rest of the civilized world’.

8. Writing in The Guardian, 13/11/06, Economics editor Larry Elliot cautioned against excessive optimism regarding the Democrat victory presaging much movement on climate change or a world trade system which is fairer to poor countries. He points out that a world which cannot organize clean water to prevent the annual deaths of 5000 children, is scarcely well placed to introduce an international system of greenhouse gas emission controls. He also warns that the Democrats are likely to support protectionist measures which will not do the developing world much good either.

‘For the time being the Democrat message is likely to be ‘troops out’ and ‘import tariffs’ than Doha and climate change’

Global Warming and the Stern Report

2006-11-09T11:03:00.000Z

Human Activity, Causation and Global Warming…and the Stern Report

‘The problem is that we are intoxicated with the idea of individual freedom. But this understanding of freedom is so impoverished that it amounts to little more than a greedy egotism of dong whatever you want whenever. We understand freedom largely in terms of shopping and mobility- we’re restless and like travel of all kinds. …I don’t blame politicians so much as all of our collective madness.’
Adapted from Madeleine Bunting, Guardian 6/11/06

The 579 page Stern Report, published Tuesday 31st October 2006, was commissioned by the UK Treasury; in other words by Gordon Brown. Immediately some skepticism was expressed by the perennial group of climate change nay-sayers. Nobody disputes any longer that the world is warming up but there is still argument over the causation, whether the basic premise of the argument- that human activity is causing rising temperatures (Anthropogenic Global Warming, AGW).

The Scientific Argument on ‘Greenhouse’ Gases
It is an obvious fact that the earth receives its warmth from the sun. However, certain gases within the earth’s atmosphere-CO2, methane, ozone - have been crucial in helping retain the sun’s heat over the billions of years life has been evolving. Some of the sun’s heat is reflected back into space but the retention of a portion of this heat, absorbed by the gases, has enabled the earth to achieve a temperature ideal for supporting life. Indeed, without such gases the average temperature of the world would have been -15 C instead of 18C.
The first person to make the link between climate and greenhouse gases was the Swedish scientist Svante Arrherius in 1898. He calculated that a doubling of CO2 would increase world temperatures by 5-6C. Other scientists observed that volcanic eruptions of sulphur dioxide into the atmosphere, which reflects sunlight, causes a degree of cooling. Some have attributed global warming to the lack of volcanic activity in the 20th century. In 1988 the UN established the Intergovernmental Panel on Climate Change(IPCC).

Human Activity has Caused Global Warming
The IPCC’s latest estimate is of a warming of between 1.4 and 5.8C by 2010 depending on what is done to curb gas emissions. As well as the IPCC the thesis of manmade global warming-AGW- is supported by the national academies of all the G8 countries plus those of Brazil, India and China. The US government refuses to ratify the Kyoto Protocol and remains ambiguous on the role of human economic activity but the causation argument is accepted by the:
a) US Academy of Sciences in its 2002 report to Bush and subsequently.
b) American Meteorological Society
c) American Geophysical Union
d) American Association of Advancement of Science
e) Several states on eastern seaboard plus California where Arnold Swarzenegger accepts the argument without cavil.

Evidence Adduced in Support of AGW

1. Gas bubbles trapped in ice provide a record of temperature back almost a million years. This shows that CO2 and temperature rise and fall tightly together.
2. Recent rises of CO2 and other greenhouse gases is greater than any during this period and is human caused as the origin of CO2 is clearly derived from fossil fuels.
3. Climate change attribution studies find that warming over last 50 years is caused by human activity; solar change alone cannot explain the increases.
4. Experiments using climate models only reproduce this trend when greenhouse gases are included.
5. There is a massive scientific consensus on the above.
6. There is too much risk not to take precautions- if we get it wrong the result could be the end of life on earth.
7. If warming continues much more it will release into the atmosphere much of the CO2 and methane stored in perma-frosted land in Siberia and the Far East.
8. Emitting 33 trillion tons of CO2 each year into the atmosphere must have a big effect on delicate ecosystems
9. There is much about the atmosphere and biosphere about which we are ignorant; it is quite possible the interaction of such manmade changes might make matters much worse in the future.

Evidence Adduced by Opponents
1. Climate change models do not take account of our ignorance of cloud physics.
Just because temperatures have been rising since the Industrial Revolution does not mean that this event has caused temperature increases.
However some scientists attribute warming to ‘urban heat islands’- cities which have increased temperature compared to ambient areas.
2.Consensus may be caused by scientists being frightened to state their views; there is a group of scientists who benefit from propagating the theory, hence their enthusiasm for it.
Solar and Volcanic activity cannot be predicted so neither can warming.
3, Sunspot activity has a major effect on warming and we cannot influence that.
4. Warming result of low altitude cloud cover, say opponents, resulting from decreased ‘galactic cosmic rays’ comprised of materials entering the outer atmosphere from far away in space.
5. Global warming theories are similar to the global cooling theories in the 1970s and are equally alarmist.

Opponents also argue that:
a) Future scientific advances will counter the effects of warming;
b) A small amount of warming will be beneficial as more CO2 will benefit plant life.
c) Increases in GDP correlate positively with those in greenhouse gases so diminishing might cause decreases. This argument is used in USA by those who claim global warming is a European ruse to hold back the US economy.

Some Scientists who Oppose Consensus
Richard Lindzen, MIT, who says:
"We are quite confident that [the] global mean temperature is about 0.5 degrees Celsius higher than it was a century ago… [but] we are not in a position to confidently attribute past climate change to carbon dioxide or to forecast what the climate will be in the future..." [1]. He has also said "Indeed, if all else were kept equal, the increase in carbon dioxide should have led to somewhat more warming than has been observed.”
Robert C. Balling, Jr., director of the Office of Climatology and an associate professor of geography at Arizona State University: At this moment in time we know only that: (1) Global surface temperatures have risen in recent decades. (2) Mid-tropospheric temperatures have warmed little over the same period. (3) This difference is not consistent with predictions from numerical climate change.
Fred Singer, Professor emeritus of Environmental Sciences at the University of Virginia: "The greenhouse effect is real. However, the effect is minute, insignificant, and very difficult to detect." (Christian Science Monitor, April 22, 2005) "The Earth currently is experiencing a warming trend, but there is scientific evidence that human activities have little to do with it."
Robert M. Carter, researcher at the Marine Geophysical Laboratory at James Cook University in Australia: "The essence of the issue is this. Climate changes naturally all the time, partly in predictable cycles, and partly in unpredictable shorter rhythms and rapid episodic shifts, some of the causes of which remain unknown."

Monbiot’s Critique
On 9th September, George Monbiot wrote in The Guardian that ExxonMobil, the world's most profitable corporation, funds a number of agencies avidly seeding and reinforcing the doubt we are possibly so keen to be justified in feeling. He also reveals that the PR firm-ACPO- hired to fight global warming scientists was the same one used by Philip Morris to rebut US Government concerns about passive smoking. ACPO set up a fake 'grass-roots' body The Advancement of Sound Science Coalition (TASSC) which has extended its remit to include global warming. Monbiot shows how the tactics used to deny the harmful effects of passive smoking were applied identically to the denial of global warming; how anything which supported the thesis of harm was labelled 'junk science'(with an influential website in support) and anything which rebutted it declared 'sound science'. Environmentalists, meanwhile, are equated with 'nazis, communists and terrorists'
Maybe one should not be so surprised at the success of the lobbyists who have sought to spike the guns of those urging action. After all, the latter are seeking to wean the world off things to which we/they have become addicted: cheap comfortable car and air travel and a general uncaring prodigality about consumption. All the former have to do is to sow the seed of doubt in the minds of a jury which is very keen to stay out. They hope they can acquit themselves of complicity in the destruction of the world in which their children and children's children must try to make lives for themselves. It's rather like saying to a hopeless alcoholic that they are not addicted and do not need treatment: they yearn desperately to believe such sophistries.

Finite Resources of the World
Sceptics seem so determined to be thick they would probably find reasons to deny the other major reason for cutting emissions and generally reining back economic activity. Back in 2002 the World Wildlife Fund (WWF) produced a report detailing the excessively high consumption of raw materials from the earth caused by the voracious appetites of modern day living. The report warned that the human race is plundering the planet at a pace that outstrips its capacity to support life. In a damning condemnation of Western society's high consumption levels, it adds that the extra planets (the equivalent size of Earth) will be required by the year 2050 as existing resources are exhausted.
Naturally, western countries consume more and deal out more damage to the environment than developing nations. America's consumption 'footprint' is 12.2 hectares per head of population compared to the UK's 6.29ha while Western Europe as a whole stands at 6.28ha. In Ethiopia the figure is 2ha, falling to just half a hectare for Burundi, the country that consumes least resources.

Conclusion
It seems clear that the weight of scientific opinion lies on the side of the AGW argument but a small vociferous minority continue to argue that the case is not proven. However, the ‘precautionary principle’ plus the need anyway to husband diminishing resources, make a change of lifestyle both inevitable and essential.

Stern Report
Source of greenhouse Gases (GHG)
The report listed how the use of fossil fuels for energy produce the biggest source of GHGs (24%); transport (14%); buildings(8%) and agriculture(14%); plus chopping down forests(18%).

Chief Emitters of GHGs(Mill tons)
USA- 6.9; UK-654; Germany-1K; Brazil 851; China-4.9; Russia-1.9; Japan1.3;Australia-491;India-1.9.; Indonesia 503.

Impact on Planet
a. ‘Warming may induce sudden shifts in regional weather patterns such as the monsoon rains in South Asia or the El Nino.’
b. Dry areas will become dryer while wet areas will get wetter.
c. Glaciers will shrink or disappear.
d. Initially crop yields will increase but after 3-4 C will begin to fall when large parts of the world would see falls of 15-35%.
e. Extra CO2 dissolving in seas will make them more acidic and prevent sea animals from forming shells and skeletons from calcium carbonate.
f. Seas will rise by 20-80cm if warming is 3-4C increasing risks of flooding and storm surges. Extreme weather will become more frequent as seas get hotter eg more typhoons and of greater intensity.
g. Many species will be unable to adapt or move to better conditions eg polar bears and seals in Arctic.
h. 2C rise would threaten 15-40% of land mammals threatened; half the tundra and a quarter of conifer forests would disappear. 3C would threaten 20-50% of land species.

Impact on People
a) Population growth plus 2C+ would cause 1-4 billion to be desperately short of water.
b) Most of these problems would hit Africa, Middle East, South America first.
c) Melting glaciers will threaten water supplies to 1 billion people.
d) 2-3C+ will cause hunger to up to half a billion people; WHO claims warming has already claimed lives of 150K since 1970s.
e) Heat waves more dangerous in cities with more pollution.
f) Sea level rises would make 200 million people displaced. Cities like Cairo, London and New York might disappear.

Impact on Economy
1. If nothing is done about climate change there will be a global reduction in per capita consumption of 5%, representing a fall double that of the worst year since 1945. The cost however could be much higher and the US economy could reduce by 25% as during the depression in the thirties. Allowing for all this and other factors the impact on individual per capita GDP could be as high as 20%.
2. Every ton of carbon emitted is calculated to cost in terms of economic damage, $85.
3. India might find GDP reduced by some 10% by 2010 with maybe an additional quarter of a billion people forced to live on less than $2 per day.
4. If temperatures continued to rise up to 3C there would be 3 million dying of malnutrition and 40% of species facing extinction.
5. 4C and half of Arctic tundra disappear.
6. If 5C Glaciers in the Himalaya disappear; London, New York and Tokyo disappear and mega problems caused by mass migration.

Carbon Trading Scheme
Stern argues that there needs to be an appropriate price for carbon. This could be done via taxation, tougher regulation or by carbon trading; a mechanism whereby companies or nations would pay for the tight to pollute. As the Guardian comments:
‘Once people were faced with the full social cost of their actions, they would switch from high-carbon goods and services to low carbon alternatives.’

As Will Hutton in the Observer 29th October observed:
If it becomes clear that the risk of climate change is overstated, the price of carbon will sink, but if it is as bad as some fear, the price will rocket. Markets will signal the risks.'
The idea of an international market is that each country would have a number of permits for sectors such as energy generation, metal production, cement, bricks, pulp and paper etc. Rich countries would then be able to buy up the permits of poor countries thus enabling them to invest in low carbon energy sources. Stern was especially concerned about aviation:

‘The level of the carbon price fixed for aviation should reflect the full contribution of emissions from aviation to climate change. The impact of aviation is two to four times bigger than the impact of the CO2 alone.’

Policies Supporting Low Carbon High –Efficiency Technology
It will be necessary to develop such technology to nurture the market in low carbon emitting alternatives. He calls for $20bn annually worldwide p.a. to effect this.

Together with other actions Stern calculates that expenditure of 1% world GDP now would prevent the shrinkage of production which would result from doing nothing.

UK Plans: Blair and Brown both feel strongly on this and hope to persuade the G8 countries to act by 2008 to achieve: a global scheme for stabilizing CO2 emissions, a global scheme for carbon trading, a global investment scheme for new technology and action to stop deforestation. The idea is to include the three Kyoto non involvers: USA, India and China. Stern says essentially, ‘it’s now or never’.

Public Opinion: a poll in The Guardian 6/11/06 suggests the public is very receptive to the green message. It reveals public feel that ‘concern for the environment’ should be the chief priority of business over ‘next few years’; feel ‘more information about ethics would influence what I buy’; and feel strongly that companies should have a responsibility to be aware of the social impact side of their business activities. Surprisingly, perhaps 77% said they had recycled items in the past year. The big question is whether this sympathy with the cause can be translated into willingness to act when such acts deny pleasures we have become used to and on which we rely eg cheap holiday flights abroad.

Economist, 4th November 2006
As so often this excellent journal manages to sum up the problem rather well:

‘Just as people spend a small slice of their incomes on buying insurance on the off-chance that their house might burn down, and nations use a slice of taxpayers money to pay for standing armies just in case a rival power might try to invade them, so the world should invest a small proportion of its resources in trying to avert the risk of boiling the planet. The costs are not huge. The dangers are.’

US Mid-Term Elections 2006 in Prospect

2006-11-05T11:46:00.000Z

‘I know many Americans are not satisfied with the situation in Iraq. I’m not satisfied either. And that’s why we’re taking new steps to help secure Baghdad and constantly adjusting tactics across the country to meet the changing threat.’ George Bush, 25th October 2006.

“In America when faced with difficulties, they tend to say ‘the situation is serious but not hopeless’ while we tend to say, ‘the situation is hopeless but not serious’”. Ian Hislop, BBC, Radio 4, 28th October, 2006.

On Saturday morning, 28th October, the former ambassador to USA, Sir Christopher Meyer, presented a radio 4 programme based on the West Wing, asking why such a reverential and optimistic series would be unlikely to be made in UK; just as Yes Prime Minister and The Thick of It could not realistically be made in the US. Ian Hislop made a shrewd point when he said that USA is a country created by idealists a few centuries ago while we are an older, much more cynical system, hardened to the realities of politics and politicians. He did think we are the more realistic though.

Hislop sees Americans- who would never accept the aggressive style of a Paxman- clinging on to a (misplaced) ideal of their public life- the kind of ideals on which West Wing was based- through long periods of hope and respect for their presidents and then having their hopes shattered disastrously. We can see that with Nixon and with Clinton; once their fallibility was exposed a strong negative reaction set in. But maybe, now, we are seeing something similar happening with the administration of George W Bush. We’ll soon find out.

On 7th November American voters turn out to elect all 435 members of the House of Representatives 33 Senate seats plus 36 state governorships.
House of RepresentativesCurrently there are 230 Republicans, 201 Democrats and 1 Independent voting with Democrats. The republicans have commanded a majority since 1995. The Democrats need to win 15 seats to win control. The Cook Political Report, an independent, non-partisan election analysis newsletter, has listed 85 seats - 66 currently held by Republicans and 19 by Democrats - as being potentially in play.
SenateSenators are elected for six year terms with one third retiring every second year. Those elected in 2000 will be reetiring or seeking re-election on 7th November. The Republican have held a majority since 2003, with 55 seats; the Democrats have 44 and there is one Independent voting with the Democrats. To win control the democrats require to win 6 seats. The Republicans can survive with 50 as the Vice President can vote to break any impasse.

Why Republicans are Facing defeat in the Mid-Terms
Pollster Stan Greenberg predicts an ‘earthquake’ in the coming elections. There are many reasons why Bush is in retreat but they can be summed upp under three simple headings: Iraq, money and sex.
Iraq: The last month has seeb a big turnaround in attitudes towards the war. Prior to that many Americans were prepared to believe that the death toll was justified as long as progress was being made towsards a peaceful and democratic country. However, the recent attempt by US troops to quell the warring militias has been seen to be failure and the death toll among US troops has continued to rise. In addition two reports made that vision unsupportable.
1. Senator David Warner, chair of the armed saervices committee, retuned from a visit to the conflict insisting that there had to be a ‘change of course.’
2. James Baker, republican grandee and family friend and fixer for the Bushes, headed up a Congressional Iraq Study Group the trerms of which were pretty much based on Warner’s above conclusion.
3. Bob Woodward’s account of how decisions are made in the White House-State of Denial- has been hitting the best seller heights, reinforcing the image of a national C in C who wilfully ignored what he did not want to see.
Playing the security card –‘trust Bush to beat terrorism’- no longer seems to work now that a majority feel Iraq is getting worse and that going in was a mistake in the first place. On top of this is the fact that Bush’s foreign policy seems to lie in tatters in other respects: he pledged that North Korea would not ba allowed to develpp nuclear weapons- they have- and the best US can respond is that China should do something about it. The additional worry is that that other part of the ‘axis of evil’, Iran, will see the case of Kim Jong-il as a precedent it can safely follow. Americans can scarcely be blamed for feeling that trillions of dollars spent on military hardware and its usage not to mention the blood of America’s young men has all been for nought.
But the disengagement with Iraq will be done with subtlety to avoid too much blame being loaded onto the Republicans.
‘It’s a polite rebellion by moderates and miltary minded Republicans. Any walkaway from the Bush line is going to be covered with a lot of cosmetics to make sure it’s not really a big change.’ Steve Clemons, Washington Political Analyst.
Sex: The Republicans have always tried to be the ‘moral’ party, as opposed to the decadent goings on of the Democrats. In 2004 Karl Rove, Bush’s personal Machiavelli, carefully cultivated the religious right and won huge tranches of new votes by exploiting and radicalising the broad group of US regular churchgoers. Surprisingly perhaps, support was found not just among traditional protestant voters but among Catholics and Jews who felt that as the country was in a state of moral decline, at least the Republicans would introduce the fear of God into White House decision-making. So moral probity, opposition to abortion and stem cell research not to mention gays and the suggestion they should be allowed to marry became the emblems of the Republican appeal to the religious right.
Religious enthusiasts for Bush did much to bring the vote out in the last three days of the campaign back in 2004 but the likelihood of that happening on 7th November has been lessened by the Mark Foley scandal. This is a Congressman, married with children, who proved to be gay and with a predatory attitude towards the young ‘pages’ who carry messages on capital Hill. His revealing email messages to a page who informed his father, were made shamingly public as the attempt of an older gay man to ‘groom’ a young boy. All this was bad enough but even worse was the well founded accusation that the Republican high command in Congress failed to act on the complaint and did its best to hush it up.
The party’s image as God fearingly devout was not helped by Lyn Westmoreland, running for re-election in Georgia, whose sole legislative initiative has been to preess for a bill that the Ten Commandments be displayed in the Capital Hill buildings. However, when asked he could not name them all-in fact he could only name three.

Money

Deficits

a) Overseas Debt. America has become the world’s biggest debtor with $10.5bn owed or 25% of GDP. As Rawnsley points out: ‘The richest and most powerful country on the planet is now in the strange and dangerous place of being hugely indebted to the rest of the world.’
b) Fiscal deficit. From a 2.5% of GDP surplus in 2000 Bush’s budget deficit slumped to minus 4% in 2004, thus wiping out all the gains of the late nineties and putting a number of expenditure prgrammes at risk.; spending on Medicare and Social Security is bound to increase as the US ages. Far from achieving a shrinking of government-the traditional Republican aim- Bush has presided over a bigger increase in spending than any previous Democrat administration.
c) American are also worried at petrol prices of over $3 a gallon and the threat that the housing market might collapse.

Corruption

A number of financial scandals have hit the Republicans.
i) Enron: this was a mega scandal of one of the biggest corporations in the world deliberately falsifying accounts to disguise economic failure. Kenneth Lay, former chief executive, who died before he could be sentenced for his part in the affair was a close friend of George Bush and some of the odium of the scandal was associated with the president.
ii)Tom De-Lay. This was the former Majority Leader of the House of Representatives, known as ‘The Hammer’ fro his ruthless expertise in delivering majority votes in Congress. In 2005 he was indicted by a Texas Grand Jury for violations of campaign finance laws. Early in 2006 he resigned his position and did not seek re-election.
iii) Bill Frist. Former Senate Majority Leader and often spoken of as a potential presidential hipoeful. After he was accused of being deeply involved in campaign improrities, he also decided not to contest future elections.
iv) Trent Lott. Another senate Majority leader, who bnlotted his copy book badly on the occasion of veteran Congressman Strom Thurmond’s 100th birthday:
"I want to say this about my state: When Strom Thurmond ran for president, we voted for him. We're proud of it. And if the rest of the country had followed our lead, we wouldn't have had all these problems over all these years, either."
Since Thurmond had explicitly supported racial segregation in the presidential campaign to which Lott referred, this statement was widely interpreted to mean that Lott also supported racial segregation.
v) Jack Abramoff. This high level lobbyist was very close to Republican senior counsels with an unrivalled network of contacts. It turned out that he was using financial inducements to achieve political ends- bribery in any other language- as well as being involved with straightforward fraudulent fleecing of indian tribes in the midwest. In March 2006 he was sentenced to 6 years imprisonment and ordered to repay $21m. Time magazine ran a story under his cover picture entitled ‘The Man Who Bought Washington’.
Other Issues in the elections include:

Immigration: illegal immigration has become a key issue in some states with possibly over 2 million illegals lost in the 300 million US citizens. Bush has been moderate on this and has suggested a halfway house whereby illegals can become legal but others favour much stricter control of the border with Mexico including a 700 mile wall.

National Security: Republicans seek to portray the democrats as soft on terror but this issue has somewhat backfired as the war in Iraq has gone pearshaped. Most Americans now think USA is less safe from terrorist attacks.

Health care: during Bush’s period in power the number of people without medical insurance has increased from 40m to 46m.
Katrina: the tardy almost careless response of the white House to the Hurricane whichn hit New Orleans underpinned the fact that the USA is deeply divided in terms of race and poverty. The episode will not help Bush win votes from African Americans.

Republicans hit Rock Bottom: As a result of all these factors a mood of change has entered US political culture which could sweep away Bush’s control of Congress and leave him a lame duck president. Bush’s ratings have slumped into the low thirties and his disapproval ratings hover in the high fifties. So bad has his position become that fellow republicans fighting for their seats are actively disuading the president from speaking in their support. This situation mirrors the problem Blair experienced in 2005. Iraq is the biggest issue in the election with 35% saying the war is going badly for USA and 58% saying it was a mistake to go in in the first place.

Of independent-non commited- voters Democrats are currently favoured by a ratio of 2-
1. Over the USA as a whole democrats lead republicans by some 15-20% but this varies enormously from state to state. But the Republicans campaigning skills should not be underestimated; they know how to come from behind.

The Final Lap of the Campaign: Reports suggest that 90% of republican funding- more generous than the Democrats- is going on attack ads in the last few days, orchestrated by Karl Rove. Studies show that negative ads have far more effect than positive ones- though perhaps British culture is less open to such approaches viz- the Tory ‘demon eyes’ campaign attack on Blair in 1997 which found no purchase. In USA Republicans have been swamping the airwaves with any smear they have been able to find like quoting sections from one candidates’ novels to suggest he is in favour of incest. Democrats have also dirtied their hands in this way but it seems that the final stages of US elections, when getting hthe vote out is so crucial, this is just par for the course.

Key Contests
House: 40 Republican seats are thought vulnerable, compared with nine Democrat. Battle grounds are in east: Connecticut, Pennsylvania, Ohio, Inbdiana, New York and Florida.
Senate: Of the 33 up for re-election, 15 are republican held and 17 Democrat. There are eight vulnerable republiucans in Missouri, Ohio, Pennsylvania, Rhode Island, Virginia Tennessee and arizona. The democrats themselves are struggling in New Jersey.
Governors: the Republicans have 28 governorships and the democrats 22; the former face defeat in New York, Ohio, Arkansa, Colorado and Massachusetts.
Democrats: They will surely expect a famous victory on 7th November but the resilience and resource of the Republicans has already been noted. Moreover, the party of FDR, Kennedy and Clinton has not yet appeared to be a coherent and organized force. America seems to be saying it does not want Bush and his party but it is not yet saying it wants the other major party either. As there is no official opposition, Democrats lack discipline to speak in a united voice and the funds to be comparable with th battery of attack ads waiting to be unleashed by Bush, Rove and company which now are believed to swing so many contests. It would be easier if they had a leader- in- waiting instead of the likely starting line-up of Hilary Clinton, John Kerry(again), John Edwards and, the most interesting newcomer, the charismatic and very able black Senator, Obama Barak.
Bill Jones 30/10/06