The Scottish Referendum

The Irish Republic declared independence from the UK in 1919, and the Anglo-Irish Treaty making them the Irish Free State was signed in 1921 and became effective in December 1922.

That was 93 years ago, and it's taken till now for the Irish President to pay a state visit to Britain.

On the day of the visit, the Irish economist David McWilliams wrote a sweet article entitled Are the Irish the creative bit in the English? where he pointed out that there are 14 million people of Irish descent in England - as he put it "close to three times as many more English people of Irish descent than there are Irish people of Irish descent" and then went on to say that some of these people (Morrissey, the Gallaghers of Oasis and others) went on to do some very creative stuff.

Reading this from an English point of view, you can't help noticing that Morrissey et al are as Irish as David Cameron is Scottish (i.e. their fathers may have been from Ireland or Scotland but they themselves were formed by their peers in England). And that the % of Irish-Brits who have done creative stuff is no greater than the % of Caribbean-Brits or Scottish-Brits or Jewish-Brits or whatever.

No matter - the article was exploring identity and some Irish pride was taken in the fact that these people became successful in England even if they wouldn't have done in Ireland and the Emerald Isle was basking in reflected glory.

The comments to the article also explored identity and this is when things became painfully poignant. Here's a comment from someone called Douglas Kastle:

I find this slightly bemusing. The Irish are getting all worked up into a tiz now that the English are being nice to us, look at the Queen isn’t she lovely. Yet they, the English as a people, couldn’t care less. Checking the front page for the Guardian, The Times and even the Daily Mail have no mention of President Higgins visit. The only thing getting any traction about Ireland is a priest singing Hallelujah on YouTube.  

I have a lot of English friends and get on great with them. However there was one disconnect I found repeatedly and a quote I heard once, that actually goes as far back as GK Chesterton summed it all up nicely:  

 “the tragedy of the English conquest of Ireland in the 17th century is thatthe Irish can never forget it and the English can never remember it”  

I can’t imagine a quote being more appropriate of the way the two nations operate. While the Irish are brought up on a diet of famine, the rising, independence, civil war, troubles, bloody english!!! etc. The English don’t know any thing about it

After nearly a century, the people of the Irish Republic are desperate for the UK to acknowledge and validate them, but because they are no longer part of our country, we don't give them a thought.

How can it be otherwise? We're a nation of 63 million people and they are just about 5 million. They don't really affect us, but we affect them - especially economically - hence their face is constantly turned to us like the moon faces earth, and we notice only if we're awake on a bright night.

But suppose they'd stayed in the UK as full participating members. They'd be on TV, they'd be sending people to Parliament, they'd have as much chance of leading a political party as anyone else, and hence the chance to become Prime Minister and shape the nation for a generation. Look at the impact the Welsh have had in creating the welfare state - Lloyd George and his state pensions and Nye Bevan and his NHS. As long as you are part of a single political entity you have a voice even if you speak a different language (as Lloyd George and Bevan did).

If you are outside though, it's like you don't exist. Does anyone from John O'Groats to Lands End spare a single thought as to how our economic policies affect the Irish Republic? Of course not. Yet most of Ireland's exports are to Britain. They joined the EU because we did and they felt they had to, or lose out. They joined the euro because they thought it would break the British grip on their economy (it didn't, it only hurt them) and now they're agonizing about what will become of them if we leave the EU - the reality is that they'll be forced to follow us out like a faithful puppy dog.

This is the fate awaiting Scotland if they vote Yes. They believe that independence will make them more equal to the English than they are now. The reality is that they'll be less equal, way less equal, due to disparities of size and the disappearance of the obligation on our part to consider them as fellow travellers.

 But how does England make this point to the Scots without coming off as patronizing? Or should we just do what I've done in this article, say it, publish and be damned?

There was another thought-provoking comment in that Irish article:

If you have Irish parents and are raised ‘in the belly of the beast’ on the island of Britain, it leads to a hybrid identity that can only be kept balanced by being ‘creative’. There’s no room for the lazy certainties of Irish-American plastic paddy bunkum and Ireland is close enough to have to face up to the numerous puzzles. In the 70s I remember listening to fok singing ‘rebel’ songs whilst being unable to buy/use contraceptives as their ‘rebel’ leaders were in thrall to a foreign Pope rather than a resident Royal. Etc. 

Never thought i’d live to hear “Amhrán na bhFiann” ring out over Windsor Castle as an old elite makes a deal with a young elite to bury the past. No ‘famine’ memorial unveiled by Higgins in London, no more investigations of past terrorism on both sides. Let’s do a deal: Canary Wharf + Canary Dwarf. The IFSC as a £ hedge in case the Euro works out, with a guarantee of an Irish return to Sterling on great terms if Europe goes tits up. It’s the economy, stupid. Geo-political chess moves hidden under pomp and ceremony. Very clever. Bread and Circus. Etc. 

There is no such thing as a singular ‘Irish’ or ‘English’ identity. It might suit Royals and Presidents to claim that all issues of class,accent, family background, education, gender, sexuality and economic wealth can be subsumed beneath the butcher’s apron or the green jersey, but only the credulous still wallow in those comforting totalising narratives

There is no such thing as a singular Irish or English identity - it's taken Ireland almost a century to realize this.

As anyone who has ever debated Scottish independence knows, once you have defeated the arguments on grounds of economics and common interest, they come back with the idea of "separate nations". One person spelt out to me what this really meant: the "nations have separate bloodlines".

But how true is that? Not true at all.

Bryan Sykes has mapped the DNA of Britain, looking at people who had grandparents and great-grandparents in the same area (i.e. they didn't move about). He found that western England, Wales, Cornwall. Devon and Somerset were Celt. The east coast from Aberdeen to East Anglia were anglo-saxons. There was no genetic difference between the Anglo-saxons and Danish invaders - turned out they both came from the same part of Denmark separated by 200 years. The great middle of Britain was a mix of anglo-saxon and celt with the celts being the majority. And the true Vikings (Norwegians) had a genetic marker, which was found in Cumbria, Isle of Mann and Shetland Isles.

So in 1707 when the Act of Union took place, England and Scotland had a similar mix of people. The dividing line on the island back then was vertical not horizontal.

The union itself produced the industrial revolution - a marriage of Scottish invention and English capital and this completely mixed everyone up. People moved from the country to the city, from north to south, east to west and vice versa. Empire opened up. People moved around the globe and Scots met English in places Singapore and married each other. The long depression of the late 19th century brought a huge amount of German immigrants (who hastily anglicized their names on the eve of WW1). The pogroms in Poland and Tsarist Russia brought Russian Jews.

Post war Britain saw people from the commonwealth arrive, as well as people from Italy (who settled in Bedford) and other places. And everyone mixed and married. Sri Lankan Tamils married English women (George Alagiah and wife), German-Turks like Boris Johnson married half-Sikh half-English ladies. Polish Jews married English women (Ed Miliband and wife), Scots married English women (Gordon Brown and wife).

Is this happening in Edinburgh and Cardiff as well as London and Bristol? Of course. And nobody even thinks twice about it - the ordinary people of Britain truly believe they are one nation. So the "separate bloodlines of the Scots" are as fake as Hitler's Aryan fantasies.

But how do you argue with people who are desperate to construct fantasies about how "different and special" they are? Especially when I don't even understand why they want to make up stuff like that?

The dreadful fear is that this Braveheart crap will carry the day and the world's oldest consensual political union will have ended (Japan doesn't count because their political system was imposed on them by the Americans after the war). England will be fine, Labour will be fine (it's a little known fact that poor Keir Hardie had to come to England and relied on the good people of West Ham South to send him to Parliament as the first Labour MP). But Scotland will end up like the Irish and something special will have gone for good.

Watch The Savers...

Almost un-noticed came the announcement from the Bank of England that long-term savings had dropped by £23 billion in the year to October 2013 - a drop of 4.7%, the last time there was a yearly percentage drop of that magnitude Ted Heath was in Downing Street. In absolute terms, we've never seen such a big drop.

That reversed the trend from October 2007 to October 2012, when savings had increased each year.

So what caused the change and why is it important?

In July 2012, George Osborne launched the Funding for Lending scheme, whereby banks and building societies could borrow from the Bank of England for four years at rates significantly cheaper than market rates. The intention was to get the banks to lend - but Osborne was too inexperienced/naive/stupid/take your pick, to understand he was dealing with bankers, who simply saw the opportunity to increase their margins. They promptly lowered the already abysmal rates they paid their savers - why bother to go to the expense of attracting savers when you could fill your boots with very cheap rates from the Bank of England?

Then on 7th August 2013, Mark Carney, in his first statement as Chairman of the Bank of England, issued forward guidance, stating flatly that

In particular, the MPC intends not to raise Bank Rate from its current level of 0.5% at least until the Labour Force Survey headline measure of the unemployment rate has fallen to a threshold of 7%

They also announced they would not even consider stopping QE till unemployment had fallen to 7%.

Funding for Lending and Carney's statement shattered the tense equilibrium between savers and borrowers, where borrowers, nervous about rising interest rates should the economy recover, tried to continue to pay down debt and savers, hoping for rate rises if the economy recovered, gritted their teeth and held on.

Not only did savings fall, but there was a record rise in borrowing, according to Bank of England figures. Household debt is the highest since September 2008.

Clearly the figures shocked Carney, because on 28th November 2013, Carney announced that he was withdrawing Funding for Lending for Mortgages.  However there is no sign that lenders have increased savings rates in response - and add to the mix that the govt introduced Help to Buy for all properties on October 2013, where the govt takes on 15% of the risk of the mortgage should a default occur.

Why does all of this matter? Banks can only lend if they have funding - and funding comes from two areas - savers and the money markets. Add in a third source in the form of the Central Bank, in schemes like Funding for Lending.

Savers are now on strike thanks to the Forward Guidance, and their abuse from the banks punch happy on Funding for Lending. So the banks are funding mortgage and other lending via the money markets.

That's the Northern Rock business model. Northern Rock if you remember, thought that other banks and building societies were foolish maintaining expensive branch networks in order to attract savers. They'd be smart and borrow cheaply from the money markets instead. And they made spectacular profits till the money markets froze in 2007 and Northern Rock got stuffed.

But despite the lessons of 2007/8 we have the more of the banking industry dependant on the money markets than before.

The BoE will have to do something to attract savers back - possibly an interest rate rise in 2014. In the meanwhile hope and pray the money markets don't freeze up again...

Regarding the Syria War Vote

I'm astonished that David Cameron hasn't resigned.

Consider what happened.

He dramatically and portentiously recalled Parliament at great expense for the vote on Thursday 29th August - even though he could have waited just a few days till Monday when Parliament was due to reconvene anyway. But a debate on Monday wouldn't have had the Drama that recalling Parliament early would have had.

He then posed for some pictures which were used incessantly by the war-friendly newspapers, of himself striding purposefully to Parliament - all to convey that he was a Man of Action.

During the debate itself, he kept ad-libbing jokes, in sharp contrast to the serious manner in which Thatcher conducted the Falklands War debate and Blair conducted the Iraq War debate. But in Cameron's mind the killing in a war wasn't important. Syria was going to Make His Name, and he was Having Fun, and why not show it!

Then Parliament slapped him down and he lost the vote.

Losing a vote on war and peace is akin to losing a vote on the budget or Queen's speech - it indicates you've lost the confidence of the house, and usually triggers a general election.

The last time a minority government fell - Callaghan's - it was brought down on the minor issue of a referendum in Scotland, and it was the Scottish Nationalists who delivered the blow by voting with the Tories. Minor issue or not, Parliament was dissolved and a general election was called, and nobody moaned about it - that was politics.

But Cameron clings on, and his latest tactic is to blame Ed Miliband for his defeat. But it's not the opposition's job to prop up a government, their job is to oppose it and defeat it, which Ed Miliband duly did. It's not Ed Miliband's fault that Cameron was unable to secure a majority in the 2010 election, and that he is unable to control the motley crew of Tories that did get elected - that's all down to Cameron.

Cameron might imagine he can overthrow three centuries of precedence and remain Prime Minister - but the old rules about power still hold. A Prime Minister who cannot command the Commons is impotent. Cameron is in office but not in power, and it's only a matter of time before this reality registers.

In Politics Demographics Are Destiny

The image above comes from the ONS Census Animation of the last 100 years. (Click to enlarge the image and see detail).

See that huge bulge from age 40 to 50? That's my generation. We were teenagers in the 1980's (which shaped our politics). We started voting in the 1990's, and by 1997, as late twenty-somethings and early thirty-somethings, we were a big enough cohort to put Labour into power with a massive majority. Even now, this group is firmly on Labour's side according to opinion polls. This is important because not all generations are equal. The pollsters present the age related data in a way that makes you think that all the cohorts have equal numbers. This is not the case as you can see from the image.

Demographics have always played a bigger part in British politics than the commentariat likes to acknowledge. A big factor in Thatcher's election in 1979 was the passing of the generation that had voted for Attlee. As the 1980's went on, more of them died and the Thatcher majorities increased. In the 1990's this started to reverse - the generations that had put Macmillan into power started to pass on, and my generation started to vote for the first time.

What is reassuring from the polls is that Labour supporters (and Labour tactical voters, who may be recorded in elections under another banner but who identify with Labour) think that the 2008 crisis was global and nothing to do with Labour. They continue to have fond memories of Labour's 13 years in power when many prospered, and are hoping for a re-run, hence their solid support for the party in the polls.

Labour leads for all the cohorts under 59.

You often get newspaper commentators wondering what happened to the people who voted for John Major. Two million Conservative voters have gone missing, they lament. It's simple - they died, and the Tories didn't think to replace them with a younger generation.

People's personalities and their politics seem to get fixed by about the age of 24 (you need to get 'em young). After that, it takes a real disaster to shake people away from their broad party allegiances.

And the 18-24 year olds who were tempted to vote LibDem in 2010 are young enough to be open to persuasion to back Labour. According to IpSOS-Mori, in the 2010 election, the 18-24 year olds voted 30% Tory, 31% Labour and 30% LibDem. Current polls are showing this group as 30% Tory, 48% Labour and 10% LibDem. So Labour has secured the next generation.

When you have demographics on your side, as Labour does now, the most important thing is to hold your nerve and not do anything to alienate people.

Thatcher in the 80's had demographics on her side - but in a fit of hubris thought that it didn't matter if she shafted the young as she believed they'd come round when they were older. She was wrong. My generation simply waited patiently till we could vote and then kicked the Tories with all our might. Keeping the Tories out is still imperative for Britain's bulge generation.

With the advent of the Iraq war and the anti-Labour fervour on university campuses, Labour very nearly made the same mistake. We were lucky that the LibDems got rid of Charlie Kennedy and replaced him with the mendacious Clegg. And all quickly enough to turn the under 24's before their views got set.

The last thing Labour needs to do is ignore it's demographic dividend and pander to the right-wing tendencies of the over 60's. The UKIP phenomenon is much talked about - but it is primarily about old people raging at their loss of dominance over British politics, they are raging against the night. (According to Yougov, UKIP register at about 16% amongst the over 60's but only 2% under the 18-24's). The relentless cycle of birth and death means that by the next election a few more UKIPers will have gone to the great cemetary in the sky and a few more anti-UKIPers will be eligible to vote.

So what should Labour do? Not stray too far from the spirit of 1997. We've got a chance for a do-over - times are different and hence the policies will have to be too, but the desire for a humane civilized country is still as strong as ever.

It may sound surprising for a Labourite to say this, but my generation is not really left-wing in the same way as the generations that came of age in the 1940's and 1960's. Instead we are soft social democrats. We like prosperity (some of us run businesses) but we're kindly enough and civilised enough to want a safety net and are willing to pay for it. We don't want to harass disabled people for kicks like the Tories, we want to cuddle them. We don't hate foreigners, some of us have employed them and others have married them - we just see them as humans who are trying to better themselves and escape awful circumstances (life in Poland is no picnic). We want to preserve the NHS for another 60 years. We're a humane generation, in contrast to the nastier strain in older people. And our children are being raised with our values.

Matthew Parris wrote in 2007 that the Labour government had changed the country - "Mr Blair will leave a happier country than he found. Something tolerant, something amiable, something humorous, some lightness of spirit ... a changed, kinder, gentler Britain."

Kinder, gentler - these are still Labour's unique selling points - it's what all under 60's want of the country. As long as Labour keeps this in mind and doesn't move out of step with what is now a clear majority of the country, the next election is ours. Is Ed Miliband a kind and gentle man? Yes - which means that personality politics, so beloved of the press, arn't against us either.

Ding Dong - A Warning For British Politicians

One of the most disturbing things about watching dictators is the way they force the people they've hurt to show "respect" to them. Who can forget the terrified boy standing stock still with fear as Saddam Hussein patted his head or the cold hungry people of North Korea praising their "dear leader"? It's an exercise of absolute power over the absolutely powerless.

In the last day, our over-class has been expressing Shock! Shock and Dismay that no such respect and reverence exists in Britain. To which the only sensible retort is "That's what's so Great about Britain!"

Part of the reason our politics is a tad cleaner than that of all our neighbours is because citizens don't let things go and they don't forgive and forget.

Telling people they should have "moved on" from their grievances over the Thatcher era is like the editor of Sun writing to the citizens of Liverpool asking them to lift their boycott and let bygones be bygones. "If countries can go to war and be friends in 15 years then can't the Sun and Merseyside do that as well?" said Sun editor Graham Dudman in 2005. As it happened the Liverpudlians had a reason to hold out implacably for justice. If they'd forgiven Italian-style, they'd have encouraged more bad behaviour.

Similarly people in other countries thought we went over the top with the MPs' expenses scandals. Jon Stewart of the Daily Show even did a "those crazy Brits" show about how we were getting wound up about what he saw as trivia over bath plugs and duck houses. But if the public didn't hound MPs over the small transgressions, they'd complacently graduate to the bigger ones. It's fear of voters not intrinsic goodness that keeps British politics clean.

Thatcher's supporters have gone a bit nutso in having such a public funeral combined with demands for "reverence" from those she hurt, North-Korean style. Attlee didn't get a ceremonial funeral and his government invented and set up NATO and the NHS - two institutions that are still going strong today. Lloyd George didn't get one either and he invented the state pension. Disraeli didn't get one either and he expanded the number of people who could vote.

The other point to make is that the Tories had their "Ding Dong" moment in 1990. They didn't wait for the lady to die before dancing on her tombstone. They made her watch while they dug her political grave, and then pushed her into it fully conscious and buried her. It was the most vicious defenestration of a leader in centuries and they enjoyed it.

Was that because they were Tories or was it because they had something in common with those revellers in city centres now (who look like harmless amateurs by comparison). In other words was it all about Thatcher and nothing else?

If Ding Dong gets to #1, the real message is to living politicians, not to the dead one who is oblivious. As Voltaire observed half with horror and half with admiration, when a British Admiral was executed in the 18th century, it was done "pour encourager les autres". It's savage but necessary - part of the Great British tradition. Are the living politicians smart enough to heed the message?

The EU Budget Vote

So - Labour actually pulled it off. A bold decision to back the Tory MP Mark Reckless' amendment calling for a cut in the EU budget actually resulted in the first defeat in the Commons for Cameron and Co. And on an issue where he is vulnerable.

It's left lots of Tories feeling puzzled. Why did Labour vote the way they did? The first reason is rather obvious - with our people suffering badly from the Tory austerity, how could we vote to send money to the EU that just gets paid out to benefit scrounger Tory landlords like Cameron's father-in-law in the form of CAP? It was a no-brainer that if the ordinary people are suffering, the EU and wealthy landowners must take a haircut too. That's why europhiles like Dennis MacShane walked into the lobby to back the rebel amendment.

Cameron's inability to understand this is down to the same foggy brain that prompted him to approve the cut in the 50% tax to 45% while simultaneously raising taxes on everyone else, and then feeling puzzled that his popularity fell as a result. Maybe they don't teach them what "we are all in this together" really means at Eton.

The second reason is that with the eurozone crisis giving birth to euro-federalism, Britain may be out of the EU anyway.

For example Labour opposes the proposal that the ECB acts as the head and regulator of all the banks in the EU, regardless of whether they are in the eurozone. It's not that we oppose banking regulation - our issue is that we have ZERO control over the ECB, we don't even have a member sitting on it's board, and in addition it appears to be completely unaccountable, even to the European Parliament. Put a big chunk of our economy into the hands of people not accountable to elected Labour MP's in Parliament? Never. Can we prevent it happening while being within the EU? Unlikely, especially with the incompetent Cameron as Britain's representative.

The Germans seem to be pushing full on for federalisation of the eurozone and the French seem too weak to stop them. It's not in Britain's interests to be locked into an EU system dominated by a monolith that can outvote us every time.

So, our exit is on the cards unless the southern states of the EU decide to get out of the euro and pull away from Germany's dominance, at which point the old equilibrium in the EU will be restored.

With this vote in Parliament Labour is simply preparing the way for a possible decision on Brexit.

There is a further left-wing rationale for supporting Brexit, which has to do with corporation tax. Back in 2005 Treasury officials were puzzled that while the economy was doing nicely, tax revenues were falling well behind what they should have been - and it was down to corporation tax avoidance. Thanks to Margaret Thatcher's Single European Act, a company like Google can make the bulk of it's sales in the UK market, but pay no tax here because they are head-quartered in Ireland.

How would Brexit change this? Simple - while we'd have a free trade agreement with the rest of the EU in the way Switzerland does, we would not be bound by the Single Act's regulations, and could therefore pass a bill on Nexus Tax, similar to the one the Americans have.

"Nexus" simply means "connection" and a Nexus tax is levied when it is clear you are not an exporter but have a local connection, be it offices, employees, agents or affiliates. Once a nexus is established, then you are liable to be taxed on the sales generated within the state. So while Google could still route all their other European tax liabilities through Ireland, a Nexus tax would be levied on their sales in the UK, thanks to to the presence of Google agents here.

Would other Europeans mind? I doubt it as most of the corporations routing their affairs through Ireland or Luxembourg are American. Those two states might object that their parasitical practice of diverting our tax take to themselves has come to a halt, but they are too small to do anything about it. The big cheeses in these firms might object, but they donate to the Tories not us, so we can ignore them. There arn't a lot of jobs at stake with these companies either. The risk lies more with them losing all their UK sales rather than us losing a few jobs.

We can only enact a Nexus corporation tax if we were out of the EU however. The benefits to a Labour govt budget would be huge, which would give us the ability to protect the vulnerable while relieving the tax burden on the working and lower middle classes.

The eurocrisis and the global recession has created a whole new world, and Labour would do well to adjust to the new reality. In her autobiograhy Thatcher boasted that most of the ideas in the Single European Act that facilitated on tax avoidance came from her and she imposed them on the rest. It would be ironical indeed if we could escape them while the others were stuck with the old biddy's mad ideas.

The Olympic Opening Ceremony vs The Jubilee - which tribe do you belong to?

It's well known that Britain is divided into two separate tribes who find each other incomprehensible. You have the Tory tribe which is feudalistic and believes that one should accrue status based on birth, and you have the Labour tribe which believes one should advance on merit.

We've seen both tribes strutting their stuff this year.

The Tory tribe got to go first with the Jubilee celebrations.

The jubilee had everything designed to send Tories into transports of delight and Labourites to shudder with horror. Elizabeth Windsor invited such horrors as the King of Bahrain (who tortures those seeking democracy in his kingdom) and the King of Swaziland (who is reputed to abuse his wives). Surely the Prime Minister would veto such guests? But he didn't - because in the Tory feudalistic universe, it's acceptable to behave extremely badly if you are a King. If Kim Jong-un had the courage to admit openly that he was part of a de-facto absolute monarchy, he'd have been invited too.

The Queen was delighted with her unsavoury guests, as you can see from the picture above.

The Olympics opening ceremony was an occasion for the Left. The Olympic games are by definition meritocratic - you don't get awarded medals for your status of birth or connections, but because you've won your race, you are faster, stronger, better than your peers.

The opening ceremony reflected that. It was opened by a choirboy with an angelic voice - he was chosen for how he sounded regardless of the fact that he lacked a left hand and had no fancy birth connections. The whole ceremony celebrated the ordinary people achieving things, overcoming the dark satanic mills, building, inventing (Tim Berners Lee) and caring (the nurses). It was intrinsic value that counted whether that was your talent or your character, not your status of birth (humble, disabled or ethnic).

Despite the Queen being invited to participate via the James Bond skit (and being pressed into it by her advisors), she clearly hated every moment.

She entered the arena as the James Bond skit ended and her face was like thunder.

She not only failed to politely smile at those who welcomed her, she conspiciously failed to get to her feet when the British athletes entered the stadium , in sharp contrast to every other head of state present, all 203 of them, who made a point of acknowledging their people. She chose to pointedly pick at her fingernails instead.

What, get up for the best, most talented athletes in nation? They're nothing but commoners, one only rises for thuggish kings. Got to stick with one's own class, you know.

Whether you belong to the Labour tribe or the Tory tribe depends on which occasion you empathised with most. Did you thrill to the sight of kings and queens and imagined yourself bowing and scraping to them? Or did your heart swell at the images in the Olympics opening ceremony of ordinary people displaying talent, compassion and inclusion?

And the crucial question - which tribe is bigger? I fancy it's the Labour tribe, which is why so many Tories were upset with the opening ceremony. We shall find out for sure at the next election.

The Return of Tony Blair

I've been meaning to write about Blair ever since his interesting interview by Andrew Marr on Sunday where he said, “I have always said I am a public service person first. I would have been happy to carry on as prime minister. I would have been happy taking the job as president of the EU.”

It's very rare that you get blunt open statements like that from politicians. Note I wrote "politician", not "former politician".

I want to stress first that this is my personal opinion and is by definition speculative - but I think Blair is back in the game.

He's tried the go-off-and-make-money thing that John Major and others have done, but he's clearly bored with giving speeches to the "elites" regardless of how much they pay him. Not for him John Major's life of quietly turning up to directorships and pocketing a very nice salary for it. He's tried the Middle East envoy thing, but found that without office he was reduced to the thankless John de Chastelain role. John de Chastelain did not bring peace to Northern Ireland, his role was to suffer the idiots of N.I. for years and keep them in the process long enough till a powerful decision maker (Blair) could come in and resolve things. He doesn't want to be knighted and sent off to the Lords like Thatcher either.

The key to understanding Blair is understanding the seductive nature of democracy and elections and his addiction to it.

Most people fear democracy. The markets panic every time an election occurs, Brussels seeks to prevent referendums in Greece (they should have taken my advice and allowed the referendum last Nov) and appoint technocrats. Anyone who has been part of a political party and attended local meetings will recognise how difficult most people find it to stand election and lose. It's a staple of local party associations to find people joining the party who have had some modest success in their lives (promotions at their job etc) and then react with shock at the electoral process, especially if they are on the losing end. If you don't win a job or promotion, the rejection is handled in private, and it's the decision of one other person (your boss or potential employer) and thus easy to dismiss without much injury to your ego. When you don't win a selection or an election, you are being rejected by the majority of your peers, and the rejection is handed to you publicly. Voters often ask why better people arn't put up for election - and the answer is that all parties are desperate for good people, but finding someone good who also has the temperament to withstand the whole humiliating process is really hard. And politics is a humiliating business for most of the people taking part.

But for a rare minority who have the gift of winning, democracy and elections are like an elixir beyond compare. Votes are a validation and there is no feeling like the applause of your peers handed to you in public. It better than winning a war (which takes place by force) or being crowned king (which requires you to pass court injunctions preventing anyone from criticising you, Prince Charles style). Winning an election is about winning validations that are freely given and the sweeter for it. And the bigger the pool of the electorate the bigger the validation. The bigger the margin of victory the bigger the validation.

And so we come to Tony Blair, the man who won three general elections, two of them with the biggest margins since universal franchise. He doesn't fear the process, he loves it. He doesn't fear those who criticise him, he believes he can handle it and turn people around (see his masochism strategy in 2005 of speaking to audiences comprised only of people who hated him - who apart from him has done that?). And he's fairly young - 41 when elected in 1997, and 54 when he left office. He craves another win the way an addict craves another hit.

Blair is a populist not a conservative. The historical figure he most closely resembles is Pericles, who led the populist faction in Athens in the fifth C BC (opposed by the conservative faction led by Cimon), and who managed to get directly elected annually to the position of archon strategi every single year from 461BC - 429BC. He's the man who made going to the theatre free for the poor (their tickets paid for by the state), built the Parthenon (spending 5000 talents, equivalent to 50 million today, a lot of money for a town of just 50,000 people, they were really rich back then) and also the man who led Athens into the disastrous Peloponnesian war. And he has the same communicative gifts.

So what do we do with our modern day Pericles? He's not going to be President of the EU unless they suddenly bring in direct elections. Part of the reason Herman von Rompuy was chosen was because he was bland and innocuous enough to stick to his brief of chairing the council and not overshadowing Merkel, Hollande and the other decision makers. Blair in that role would immediately seek to dominate and usurp everyone else, which is why pigs will fly before they appoint him.

So that leaves being Prime Minister of the UK. If Ed Miliband fails to win the next election, I wouldn't be surprised if Blair stood for the leadership. He'd win too, thanks to debates and all the rest showing up his opponents as ordinary people.

In a way it all depends on the European situation. Martin Wolf of the FT is of the opinion that if the Europeans actually pull off a resolution to the crisis and make a federal eurozone, with the euro surviving intact, the only options for the UK are leaving the EU entirely, or joining the eurozone. The position of in the EU but out of the eurozone is untenable in that situation as we would not have parity with a powerful federal hegemonic eurozone within the EU. In that situation, Blair would lead those saying we'd be better off controlling the hegemon by being in it and taking it over (his boundless belief in his persuasive skills mean he thinks we can completely dominate them if we were in with him in charge).

If people want to avoid Blair 2.0, they need to work hard at making sure Ed Miliband gets to Downing Street and hope that the euro breaks up too.

Local Elections!

It was nice to win 800+ seats, and not just hold off the SNP in Scotland, but win a string of wards in the south, taking Southampton, Norwich, Great Yarmouth, Exeter and many others. Labour wins general elections when Southern Labour finds it's groove and delivers victory, so this is an important milestone on the way to the next general election.

If you doubt it, click the following link to see an animated electoral map of Britain since 1832 - there is something thrilling about the way a few small red dots suddenly appear in Northern-England and Wales in the late 19thC and then sweep through Britain. When the red dots go south is when Labour wins general elections.

The other interesting thing about that map is how London, world city and great beating heart of Britannia, turns Labour in 1923, and then stays loyal to us, through the Great Depression, into the MacMillan era and throughout the Thatcher-Major years.

Even now it remains mainly Labour, so it's kind of sad that one of it's sons ended his career on Thursday, and by only about 63,000 votes out of more than 2 million cast.

Ken Livingstone's life and career was about London. He was born and bred in Lambeth, and the first steps in his political career involved him getting elected to Lambeth council and then controlling the GLC. When the GLC was abolished, he became a Labour MP for Brent East, a London constituency, and as soon as Blair established the London Mayorship, his ambition was to be Mayor of London, which he achieved in 2000 and again in 2004.

 In London legend, he's up there with Dick Whittington. He'll always be remembered for being open and putting the Congestion Charge into his manifesto, and then successfully enacting it and getting re-elected.

At the time of the Congestion Charge proposals, the Mayor of New York quipped that all of them would like to propose such a solution to the traffic problems of their cities, what was holding them back was whether they'd get re-elected after it was implemented.

Part of Ken's legend was not only that he was honest upfront about what he wanted to do - but that he made a success of it. That was achieved by shrewdly combining the congestion charge with improvements to the rest of London transport, and introducing the Oyster card. The Republican Michael Bloomberg tried to copy Ken in that other world city, New York, but failed to get his policy through. Cities like Singapore also successfully implemented a congestion charge, but unlike London's, it was done by fiat, rather than by democratic consent.

Ken Livingtone has his critics, but it takes a rare gutsy politician to be honest about a proposed solution before an election, to win democratic consent for it, to implement it successfully, and then to get re-elected on the back of it. This select group is tiny - Roosevelt in 1932, Thatcher in 1983, Blair in 1997. That's it.

Ken Livingstone's other great moment was his impromptu speech on the day of the 7/7 bombings, which he gave when in Singapore, having just won the Olympic games for London. Here's an excerpt:

This was a cowardly attack, which has resulted in injury and loss of life. Our thoughts are with everyone who has been injured, or lost loved ones. I want to thank the emergency services for the way they have responded. 

...I want to say one thing specifically to the world today. This was not a terrorist attack against the mighty and the powerful. It was not aimed at Presidents or Prime Ministers. It was aimed at ordinary, working-class Londoners, black and white, Muslim and Christian, Hindu and Jew, young and old. It was an indiscriminate attempt to slaughter, irrespective of any considerations for age, for class, for religion, or whatever. 

That isn't an ideology, it isn't even a perverted faith - it is just an indiscriminate attempt at mass murder and we know what the objective is. They seek to divide Londoners. They seek to turn Londoners against each other. I said yesterday to the International Olympic Committee, that the city of London is the greatest in the world, because everybody lives side by side in harmony. Londoners will not be divided by this cowardly attack. They will stand together in solidarity alongside those who have been injured and those who have been bereaved and that is why I'm proud to be the mayor of that city. 

Finally, I wish to speak directly to those who came to London today to take life. 

I know that you personally do not fear giving up your own life in order to take others - that is why you are so dangerous. But I know you fear that you may fail in your long-term objective to destroy our free society and I can show you why you will fail. 

In the days that follow look at our airports, look at our sea ports and look at our railway stations and, even after your cowardly attack, you will see that people from the rest of Britain, people from around the world will arrive in London to become Londoners and to fulfil their dreams and achieve their potential. 

They choose to come to London, as so many have come before because they come to be free, they come to live the life they choose, they come to be able to be themselves. They flee you because you tell them how they should live. They don't want that and nothing you do, however many of us you kill, will stop that flight to our city where freedom is strong and where people can live in harmony with one another. Whatever you do, however many you kill, you will fail.

I'm not being unkind to Blair when I say Ken's response was better.

So farewell Ken Livingstone. London will always remember you as one of it's most distinguished sons. You may have been defeated narrowly by Boris Johnson, but Boris is a piece of flotsam and trivia in the grand scheme of things. In a hundred years time you will be remembered as one of London's important mayors when Boris-I-spend-all-my-time-writing-frivolous-articles has long been forgotten.

Coalition government approval rating down to -43

... according to YouGov. Blair didn't reach that negative rating till late 2006, nine and a half years after he got elected, and well after he agreed to step down.

Obviously the last week and a bit have been packed with all sorts of excitement, and commentators are divided as to which event had the most impact - was it the granny tax at the same time as the top rate of tax being cut? Or was it minimum alcohol pricing, or the tax on pasties? Or Cash for Policies? Or was it the false panic on petrol?

My money is on the fake petrol crisis that turned into a real one thanks to the government.

A crisis has to inconvenience real people before it has an effect. Spending cuts, tax rises and all the rest are only theoretical events until they actually bite, which is the point when most of the public takes notice. The fake petrol crisis, stoked up to divert press attention from Cash for Policies bit hard on anyone who drove to work, drove to pick their children from school, drove to the shops, people who drove, period, which is most of the adults in Britain.

Some commentators expressed astonishment that people actually took notice of the govt when they claimed people had to stock up on petrol because of an imminent strike. What they don't realise is that despite widespread grumbling, at some deep core, every Briton trusts that the govt is telling the truth when it comes to crises. It's part of being British.

This reflex goes back to World War II, when Labour were running the Home Front, and in an effort to stave off the starvation and chaos that was prevalent during WWI, established a set of rules that they wanted everyone to follow for the survival of the tribe - so people followed rules about rationing, and what they should do in an air-raid, and how to keep calm and carry on diligently - and were rewarded when Britain survived the U-boat blockades and managed to produce enough food and keep the factories at full pelt to win the war.

Faith in the government continued after the war, despite grumblings about policy. When the Thatcher government leafleted the entire population about how they should avoid AIDS, people assumed (correctly) that the government was giving advice in good faith and that the advice was correct, and they followed that advice. When the Blair government leafleted everyone on safety advice in the event of a terrorist attack, it was again taken in good faith and the advice trusted as sound.

The terrorist attacks in 2005 were handled well by the public services and by the members of the public who had been primed by previous advice as to what to expect. Ditto the crises of 2007 (floods, terrorism etc) that Brown handled.

So it has come as a shock that the Cameron government manufactured the fuel crisis out of thin air, merely to divert attention from Cash for Policies, and worse, gave out duff advice, which has led to people filling up jam jars and other unsuitable containers with flammable liquid, whose vapour seeps out and is easily ignited. It resulted in the burning of a woman who didn't fully understand that it is petrol vapour that ignites (possibly because it has never been taught in school and has never been a subject of a government leaflet).

Most people don't have a lot of spare cash, so the petrol they bought at jacked up prices came at the expense of something else, or was borrowed on the credit card. And not only was there no strike, but Unite had to bail the government out by agreeing to drive heavy vehicles full of flammable liquid for eleven hours a day instead of nine to replenish the stores of fuel at petrol stations (I get tired after driving my small hatchback for four hours).

This is the first time in living memory that people feel they can't trust the government to tell the truth or give useful advice when a crisis hits. The first time people feel they are being manipulated and inconvenienced by the government for no good reason. The purpose of government is to keep the peace not disturb it, to protect the public not harm them, to solve crises not create them. How do people know when the next "crisis" is announced, whether there is some real danger they need to take note of, or whether it is all fake? They don't. A rubicon has been crossed.

Labour made some strategic wins in 2011

In the political sections of the press it's wall-to-wall articles and editorials about how Ed Miliband needs to be toppled from the Labour leadership. Newsnight even headlined a "Should Ed go" feature on the night before the Feltham and Heston by-election. Luckily the voters ignored them and returned a Labour MP with a bigger majority and a healthy share of the vote.

Why all the wall-to-wall shrillness from the press? It's simple; none of them backed Ed Miliband for the Labour leadership, and they are terrified of the prospect of a potential Prime Minister who owes them nothing. What happened to the NOTW only serves to reinforce this terror. Ed Miliband was free to go on the attack precisely because he owed them nothing - and it's something his brother would not have been able to pull off.

Most newspapers are not profitable (with the notable exception of the Daily Mail). Instead they are vanity projects for their owners - the Barclays and Desmonds and Murdochs of this world take losses on various print titles but believe this is an "investment" because they get to influence the government of the day, which in turn has a beneficial effect on their other non-press business interests. If they lose influence, then what's the point of pouring all this money down a black hole?

So their agenda is always to try to ensure that all the main parties owe them something.

When the Tories in the heady excitement of their very first one-member-one-vote election in three centuries chose IDS, Fleet Street was horrified. He was not their man and they despatched him in the usual way - they made up a false smear against his wife, got some useful idiots in the Conservatives to get worked up about it, and forced him out. His replacement Michael Howard did no better than IDS in the 2005 election, so the Conservatives gained nothing from dethroning an elected leader - but Fleet Street was delighted - Howard owed them allegiance, and that was all that counted.

Labour should remember that when the press starts shrieking about EdM. The press cares even less about us than it does about the Tories.

Time is on our side, the power of the press is waning. The lack of influence of the Newsnight broadcast just before the Feltham and Heston by-election is one indicator. The 2010 general election is another indicator: the entire right-wing press backed Cameron, and the Guardian and Independent backed the LibDems - and yet the Tories failed to win the general election, and the LibDems couldn't even match Charlie Kennedy's tipsy 2005 performance and lost seats.

The press are screaming into the wind with ever greater force - but the voters are not listening to them. Indeed the only part of the electorate that is paying attention are the elderly, and that's mainly because they have time on their hands and try to fill it watching the news channels and reading newspapers. And for the moment that's where the Tory support comes from.

The Labour party should take the demise of the NOTW as a massive strategic victory this year. A big part of the 4 million NOTW readers have not shifted to the other papers - they simply stopped reading a Sunday paper and have gone shopping or to a footie match instead. That's several million people not getting their minds poisoned on Sundays then.

Going into 2012, capitalism is our friend in this instance. Businesses are being very careful about their budgets and scatter gun advertising in the print media yields a much lower return on investment than targeted advertising on the search engines for terms like "pyjamas" or "watches" or whatever it is you are selling. So the advertising revenue streams of the newspapers will be under even more intense pressure, and at some point their owners will need to decide whether it is really worth keeping them going. With any luck we should see another paper bite the dust (no need to mourn the loss, journalists are on the record about what a paradise life on benefits is and how they long to appreciate it's charms).

When happens when the shrill make-stuff-up mafia print press shrivels? Well broadcast press is regulated, and the newspapers who ply an honest trade and don't make their stories up have a small readership, so politics then shifts to the ground war, old-fashioned door knocking, leafleting and talking to people face to face. And Labour is good at the ground war. The Tories like to talk a lot about work but they don't actually like doing it. Their local associations are amongst the laziest in the western world. Going into 2012 this should help us - we will continue to win where it matters in local and by-elections - at the ballot box.

The Americans have moved on already - for them, the challenge to their vision is Berlin

The British papers are understandably obsessed with Cameron's EU veto, with the right-wing press thrilled, the LibDem press (BBC, Guardian and Indie) appalled and the financial press (FT and Economist) deeply concerned. (Labour's sole media representative, the Mirror, has ignored the EU crisis entirely and focused on X-Factor and Tories-in-a-Nazi-themed-stag-party-scandal!).

The Americans however have moved smartly on. For them it's all about Germany v the USA - Germany and US in Tactical fight, says the NYTimes.

According to the American version of events, Obama has prevented global financial meltdown by putting in a huge stimulus and empowering the Fed to print money and fire fight wherever it sees necessity, and they feel Merkel is putting the whole thing in jeopardy by trying to impose austerity on the EU.

They even accuse the Germans of wanting financial instability because it plays into their hands:

The Germans, for their part, seem almost to welcome the collapse of market confidence: without the rising pressure from markets, Silvio Berlusconi would not have resigned as prime minister of Italy. And without the incentive of fear, most European partners would have been more reluctant to give Brussels oversight authority over national budgets — and the right to impose sanctions for violators.

“The Germans had a strategic insight or advantage to let the crisis get to the threshold within the European Union necessary for France to be willing to hand over the kind of sovereignty the country has always resisted,” said Jacob Funk Kirkegaard of the Peter G. Peterson Institute for International Economics in Washington. “You could say that the crisis has either been the wake-up call or the tool that Germany has used to beat them into submission.”

Obama sent his Treasury secretary Tim Geithner to Brussels ahead of the summit - and it's known he tried to contact Cameron too, but Cameron missed the call (or dodged it?)

The Reagan and Bush I administrations used close ties with the Tories to influence European policy, and the Clinton and Bush II administrations used close ties with Labour to do the same, (and Hillary Clinton as Secretary of State in Obama's administration had a very close relationship with David Miliband in Brown's administration).

But the Americans have no relationship at all with either Cameron's Tories or Clegg's LibDems. Further, by removing himself from the EU theatre, Cameron has removed himself as a useful friend to the Americans.

What now?

Well notice how the Americans are worrying about French sovereignty. Obama's relationship with Sarkozy is good, fuelled by his romantic appreciation of France as America's original ally (and pretty much one of two important countries the Americans have never been to war with, the other being India). In addition, to him Cameron is the equivalent of George III and he isn't going to shed many tears over losing him as an ally at the European table.

For the Americans the French are now their proxy in their 60-year strategic goal of keeping the Germans down and the Russians out. Expect maximum help from the Americans to the French in their attempts to ensure that Germany doesn't walk all over them and the rest of Europe.

FWIW, I think Obama is right and Merkel is wrong - wall-to-wall austerity is pretty much nuts - if everyone's consumption contracts, who will buy your products?

Britain needs to hope that the Americans via the French prevent the Germans from sending the entire EU into depression. We are no longer in control of our fate now that Dave-no-mates has found himself locked out of all the top tables in Europe and across the Atlantic. We are in the bizarre position of hoping the French (of all people) manage to prevent made-in-Germany eurogeddon.

End game for Greece: Papandreou calls a referendum

There is shock across the eurozone because George Papandreou has decided to call a referendum over the bailout that was cobbled together a few days ago.

Papandreou is the socialist prime minister elected in Oct 2009 to sort out the mess created by the previous uber corrupt Conservative government who not only cooked the books but spent money they didn't have employing Goldman Sachs, who promptly made even more money arranging new bum loans.

Papandreou has been struggling manfully with the legacy of his idiotic opponents and an angry public who has been asked to pay for the sins of the elite.

He also has to deal with a stroppy German public who have already been through a similar restructuring of their own - The foolish conservative Helmut Kohl had unified Germany with a 1 Deutchmark = 1 Ostmark policy, which led to rapid loss of productivity in the eastern states, plus massive stress on the western states who had to bail them out, and which was only sorted out painfully by the socialist Gerhard Schroeder who led Germany from 1998 to 2005, along with Peer Steinbrück who was the socialist finance minister in the grand coalition from 2005 to 2009. As it happened, joining the euro in 1999 helped them - though the euro was a fairly strong currency it wasn't as strong as the old Deutchmark, especially in the early years, so the Germans got a boost from de-valuation - the very thing they are denying the Greeks. And despite the devaluation boost they got from the euro, they still had a rough old time - from 2000 to 2009 Germany under-performed the UK, US and French economies.

According to the Greek press, the Greek conservative opposition is furious about the referendum, labelling it "irresponsible".

So what is Papandreou up to? In my opinion, he is looking for a way to exit the euro, and to then emulate what Nestor Kirchner managed to do in Argentina.

For those who don't know Argentina's history, the conservative Carlos Menem had pegged the Argentinian peso to the dollar, to acclaim from Wall Street and other banker types. But it ended in tears as the Federal Reserve raised interest rates to cool inflation in the US, which raised the dollar which in turn raised the peso which was pegged to it. Argentina was unable to service it's dollar-denominated debt and had to default - does this story sound familiar? It should because it's the story of the ostmark being pegged to the deutchmark and the drachma being pegged to the euro.

While the Germans gracefully got out of their problems by devaluing under the cover of joining the euro, Argentina had the mother of all defaults, and in raced the IMF to impose draconian spending limits all in the aid of propping up the banksters who had a) urged Argentina to peg their currency to the dollar and then b)lent them money in dollars knowing all the while it would be a disaster.

Kirchner was a socialist and sided with his people against the banksters. He simply told them to take a hike, decided what Argentina could afford to pay without massive unrest, and then defaulted on the rest. Argentina promptly revived and started prospering.

The only option for Greece is to do what Kirchner did - and that needs a referendum and for the voters to say No.

Why the consternation in the rest of Europe? Because a bailout will still have to take place - of the banks, shorn of the "cover" and pretence that they were really bailing out the Greeks. In turn this will accelerate the need to re-regulate the banks and separate retail banking from investment banking - in other words reversing the trend set in course by Margaret Thatcher when she de-regulated in the 1980's, and then exported the idea to the world. (People forget that one of the arguments made by Wall Street when they were pressing for the repeal of Glass-Steagall was that they were ham-strung compared to London where de-regulation meant retail banks could merge with investment banks).

Cue Tory City donors prodding Cameron sharply in the back-side and him responding by de-crying Europe interfering and preventing the banks from bankrupting us all again (he's that silly, he probably believes that the public will side with the banks against the EU, but as usual he is mis-reading the situation).

As for the Greeks - it's awful to default, but it happens to every single nation at some point. Britain defaulted on her debt to the USA in the 1930's. The Americans sort of defaulted in the 1930's by switching from the gold standard to their own paper currency which was worth much less - and they did it again in the 1970's when they switched from Breton Woods to floating currencies. And yet life went on. Germany on the other hand tried to pay her debt in the 1930's and it led to war. De-valuing by joining the euro proved a better way out in the late 1990's.

Whatever. Good on Papandreou for calling his referendum, and I wish him and the Greeks luck.

Dave's Broken Government

An apt pair of comments from the Telegraph that I thought deserved a wider audience:

Question:

6 months for stealing £3.50 worth of bottled water.

18 months for being in possession of a stolen television

48 months for calling for riots via Facebook.

How much for hacking into the mobile phones of hundreds of people, including the mobile phone of a murderd child, and then undertaking a conspiricy to cover up this fact by lying, with others, to both the police and parliament?

Answer:

A senior position in the Tory government.