Yesterday and today the British commemorate the people killed and injured in military campaigns: the official ceremonies are usually focused on those who were serving the crown in the armed forces and the police, fire and ambulance services [as in the London bliz and in Northern Ireland], but allied and associated units are also remembered as thought appropriate. In Australia and New Zealand 11 November stands coequal with Anzac Day, when those two countries recall the carnage wrought upon the Australian and New Zealand Army Corps [hence, the Anzacs] under incompetent British generalship at the invasion, siege and retreat from Gallipoli in the First World War. That tragedy is regarded as the episode that made both Antipodean countries aware that being loyal to the British crown - or even to the British Empire - was not the permanent best bet for the future of their peoples. So far they have stuck with the monarchy, but it is very widely anticipated that on the death of the Queen both countries will take the opportunity to review their constitutional position.
It is absolutely incredible that the Queen still reigns in Australia and New Zealand - obviously, under total constitutional restraint - 101 years after the disaster of the Dardanelles became apparent. It is incredible that Britain and Northern Ireland settled down in 1919 to live under a constitutional settlement that was temporarily patched up until the Irish Free State could be set up in the 'twenties without full-scale war between the Republican/Fenians and the Ulster protestants: a conflict in which the British army, navy and newly-minted Royal Air Force would have been of ambiguous loyalty.
I have mentioned in recent days that the headbanging Brexiteers will not have their way because the Irish question will prove intractable. Peace in Ireland can only be maintained - 99 years on from the first Armistice Day - by keeping the Good Friday Agreement and all that stems from it. Edward Heath combined his failed attempt at peace in Ireland [epitomised in the Sunningdale Agreement] with Britain and Ireland joining the European Common Market together in the expectation that the two would eventually surrender their statehood to the 'ever-closer Union'. John Major led huge steps towards peace in Ireland based on keeping the UK tightly within the Union [as it had become with the agreement - however completely understood - by Mrs Thatcher]. Then the apparently fresh, young Tony Blair was able to bring the process to a very satisfactory conclusion entirely within the EU context. Ireland has always been a major constraint on British policy, and anyone who dismisses that issue as unimportant in the run-up to 'serious' Brexit negotiations is in for a very major shock.
Returning to the main point of today, we can note that the monarchies which had obviously been defeated in the war - the many sovereign German princes, the Empire of Austria and Kingdom of Hungary, and [in effect] Russia - were wiped out; and red revolutions were attempted in Vienna, Budapest, Munich and Berlin. Soldiers with their weapons in hand put down the risings in central Europe, while the navy and the army mostly sided with the workers in Russia to permit Lenin to grab power.
But in Belgium, where much of the country had been devastated by the war, the king returned as a national hero. In Britain during the war there had been rumblings about the king being a German - which, in ancestral terms, he was - leading to the proclamation of Windsor as the royal family surname. The king loyally supported his ministers, while intervening to keep crass generals - first French, then Haig - in supreme command even though their stupidity could not be concealed. Haig accepted assurances that the third major assault on the Somme, known as the Battle of Paschendael, would succeed because such an efficient artillery barrage would be launched before troops were sent 'over the top' that all the barbed wire in front of them would be destroyed and 'not even a rat' would be able to survive the gunfire. The men went over the top, the barbed wire was in place; and as soon as the artillery barrage was lifted the Germans restored their machine-guns to be ready to slaughter the British, Canadian and Indian infantry who were sent forward. Then came the rain, and the churned-up ground turned to deep mud; but Haig sent more and more troops forward for four months, until the Canadians' capture of a small ridge of land enabled the idiots at HQ to proclaim the battle a 'success'. That was just one of the most conspicuous, crass, wastes of human lives that went on from Mons in 1914 until November 11, 1918.
Almost every street and every extended family in the United Kingdom - including, then, Ireland - suffered casualties. Yet the regime, the politicians, the generals and the king were exonerated from blame: individual generals were the subject of loathing from conscripts whose companions had been killed, injured and deprived of their reason as a result of the commanders' stupidity and arrogance, but the regime was not seriously challenged on the mainland of Britain. However, the losses of the war - in men, industrial output wasted, foreign debts incurred and international power - could not be ignored. So a huge propaganda effort, such as had never before been seen, was launched: with massive effect. A temporary 'Cenotaph' - a tall plinth for a coffin - was erected in Whitehall for the first anniversary of Armistice Day, and 'the Glorious Dead' were honoured as national heroes. A couple of years later the 'unknown soldier' was disinterred from a war grave in France and moved to Westminster Abbey, so that every bereaved mother could imagine that her son would ever after be honoured by kings, princes and politicians. That could only continue if kings and princes were kept in place; and so the regime was more deeply cemented in national sentiment than ever before.
This is a spectacular achievement, adopted throughout the Empire and the United States; and with a similar set of events in France and Belgium. Its force in maintaining the socio-economic order is rarely recognised: but the Irish dimension is again being exposed.
Showing posts with label Canada. Show all posts
Showing posts with label Canada. Show all posts
Sunday, 12 November 2017
Wednesday, 8 November 2017
China, Russia and Trump
The President of the USA is due to arrive in China today. It has been much heralded as the first great occasion when the newly enhanced President Xi will be able to demonstrate his mastery of the regime and the magnificence of the show that can be put on for Mr Trump.
In the run up to this visit, Trump has been forced to recognise that there is a very longstanding and close alliance between Russia and China. He has admitted that any plan more tightly to contain North Korea depends almost equally on the two powers that have land borders with that 'rogue state'. While China has been the main supplier of essential imports to the Pyongyang regime, Russia has also been a friendly facilitator over many years.
There is little room for doubt that both China and Russia are sorry that North Korea has developed its nuclear capabilities so far that Kim can be bombastic to the USA: and, by implication, a major nuisance to Russia and to China. On the other hand, they have noted both Trump's reciprocal bombast towards Pyongyang and his deeply ambiguous situation in regard to Russia.
As Secretary of State and as a presidential candidate, Hillary Clinton took a high moral stand on Russia's adventurism in the Ukraine, both the Donbass region and Crimea: she was a major influence on the introduction of sanctions that have affected Russia's trade and the general standard of living of the population negatively and [in a few areas] dramatically. Hence, Russia used all the covert means at its disposal [which are vast] to ensure that Trump had the best chance possible in the general election one year ago. It is very doubtful whether the mass of Russian intervention in any way swayed the election result which, like the Brexit vote in the UK, reflected the despair of swathes of US voters at the failure of the economic and social systems to maintain the American Dream in the rustbucket. The sheer originality - which the literati dismiss as the absurdity - of Trump's approach was combined with a deeply instinctive populism to grab people's attention and stimulate the enthusiasm of the 'forgotten people' in pockets right across the USA. It is noteworthy that Bernie Saunders almost hit the same note from a different pitch, in enthusing the metropolitan young: against him Hillary Clinton displayed increasingly platitudinous arrogance, shouting instead of speaking and thus diminishing any impact that her actual sentences might have achieved.
Russia and China have doubtless agreed a common approach to Trump; based on flattery interspersed with spoonfulls of bitter realism. Mr Xi will spend the next couple of days honouring and further educating the US president. President Putin will be in the same room with them in the following days at the pan-Pacific conference, and it is there, rather than Beijing, that any new understanding on how to deal with North Korea will be agreed.
At the end of the Gorbachev years I twice made the [supposedly] direct flight from Moscow to Beijing, which each time made a heavy - unannounced - landing in Novosibirsk. This was necessary because the old Illyushin aircraft could not carry enough fuel for a non-stop journey. Both times the most conspicuous cohort of passengers were people with massive bags full of empty bags; whose business was to buy up whatever consumer goods were available from the new workshop-factories in China and take them back to Moscow in their many bags. They had a hard time with Russian customs on the way home [doubtless lessened by cash handouts when the KGB turned a blind eye] but their trade was highly lucrative. Russia has never facilitated the sort of entrepreneurial activity that enabled China to build up its balance of payments surplus with the industrial west, and is still largely dependent on China to supply the everyday manufactured goods that middle England takes for granted [and which mostly come into Britain from the emergent economies, not least China]. In exchange for this mass of imports - which are no longer imported by individual chancers as they were in the 'nineties - Russia can pay in oil and other materials; and by allowing Chinese firms to become farming contractors, mostly in the far east where the supply of Russian labour and enterprise are most thinly stretched.
Russia and China are hugely and closely inter-dependent all along the longest international border in the world. This interdependence was slightly set back by the extremities of the Cultural Revolution in China, and then by the economic chaos that followed from the collapse of the USSR. But the long northern border of Russia with China - right to the very eastern point of the Asian mainland - remains, even though other former-soviet republics now border China to the west. The two economies are even more closely symbiotic than that of Canada with the USA, and there will be no room for doubt that the briefings given to President Trump will have emphasised the point. To general surprise, 'The Donald' appears to have been paying more attention to his briefings of late than he did in his early days in office. He is to be watched, closely, over both his days in Beijing and in the ensuing wider conference. Great-power politics could well be reshaped; with North Korea as the carcass to be picked over; rather than the existential threat that it appeared to be in White House demonology just a month ago.
In the run up to this visit, Trump has been forced to recognise that there is a very longstanding and close alliance between Russia and China. He has admitted that any plan more tightly to contain North Korea depends almost equally on the two powers that have land borders with that 'rogue state'. While China has been the main supplier of essential imports to the Pyongyang regime, Russia has also been a friendly facilitator over many years.
There is little room for doubt that both China and Russia are sorry that North Korea has developed its nuclear capabilities so far that Kim can be bombastic to the USA: and, by implication, a major nuisance to Russia and to China. On the other hand, they have noted both Trump's reciprocal bombast towards Pyongyang and his deeply ambiguous situation in regard to Russia.
As Secretary of State and as a presidential candidate, Hillary Clinton took a high moral stand on Russia's adventurism in the Ukraine, both the Donbass region and Crimea: she was a major influence on the introduction of sanctions that have affected Russia's trade and the general standard of living of the population negatively and [in a few areas] dramatically. Hence, Russia used all the covert means at its disposal [which are vast] to ensure that Trump had the best chance possible in the general election one year ago. It is very doubtful whether the mass of Russian intervention in any way swayed the election result which, like the Brexit vote in the UK, reflected the despair of swathes of US voters at the failure of the economic and social systems to maintain the American Dream in the rustbucket. The sheer originality - which the literati dismiss as the absurdity - of Trump's approach was combined with a deeply instinctive populism to grab people's attention and stimulate the enthusiasm of the 'forgotten people' in pockets right across the USA. It is noteworthy that Bernie Saunders almost hit the same note from a different pitch, in enthusing the metropolitan young: against him Hillary Clinton displayed increasingly platitudinous arrogance, shouting instead of speaking and thus diminishing any impact that her actual sentences might have achieved.
Russia and China have doubtless agreed a common approach to Trump; based on flattery interspersed with spoonfulls of bitter realism. Mr Xi will spend the next couple of days honouring and further educating the US president. President Putin will be in the same room with them in the following days at the pan-Pacific conference, and it is there, rather than Beijing, that any new understanding on how to deal with North Korea will be agreed.
At the end of the Gorbachev years I twice made the [supposedly] direct flight from Moscow to Beijing, which each time made a heavy - unannounced - landing in Novosibirsk. This was necessary because the old Illyushin aircraft could not carry enough fuel for a non-stop journey. Both times the most conspicuous cohort of passengers were people with massive bags full of empty bags; whose business was to buy up whatever consumer goods were available from the new workshop-factories in China and take them back to Moscow in their many bags. They had a hard time with Russian customs on the way home [doubtless lessened by cash handouts when the KGB turned a blind eye] but their trade was highly lucrative. Russia has never facilitated the sort of entrepreneurial activity that enabled China to build up its balance of payments surplus with the industrial west, and is still largely dependent on China to supply the everyday manufactured goods that middle England takes for granted [and which mostly come into Britain from the emergent economies, not least China]. In exchange for this mass of imports - which are no longer imported by individual chancers as they were in the 'nineties - Russia can pay in oil and other materials; and by allowing Chinese firms to become farming contractors, mostly in the far east where the supply of Russian labour and enterprise are most thinly stretched.
Russia and China are hugely and closely inter-dependent all along the longest international border in the world. This interdependence was slightly set back by the extremities of the Cultural Revolution in China, and then by the economic chaos that followed from the collapse of the USSR. But the long northern border of Russia with China - right to the very eastern point of the Asian mainland - remains, even though other former-soviet republics now border China to the west. The two economies are even more closely symbiotic than that of Canada with the USA, and there will be no room for doubt that the briefings given to President Trump will have emphasised the point. To general surprise, 'The Donald' appears to have been paying more attention to his briefings of late than he did in his early days in office. He is to be watched, closely, over both his days in Beijing and in the ensuing wider conference. Great-power politics could well be reshaped; with North Korea as the carcass to be picked over; rather than the existential threat that it appeared to be in White House demonology just a month ago.
Saturday, 7 October 2017
Providential Penalties: A Salutary Case of Point Protectionism
This blog has often referred to point protectionism, my term for the myriad instances where governments override [or ignore] trade agreements - including those which are supposedly universal under the World Trade Organisation [WTO] - in order to give advantage to their native producers or to disadvantage alien producers who can outsell their native producers in some markets some of the time.
The recent cause celebre in this category is the action that the US government has taken against the Canadian aircraft firm Bombardier at the instance of Boeing, a US-Based competitor. Britain has a particular interest in this case as the wings of the aircraft under challenge are made in Northern Ireland. In the first instance, last week, the US slapped a 220% tariff on the import of the 'planes on the grounds that the Canadian and British governments had given grants to Bombardier. Yesterday the US took a second bite of the cherry, and added another 80% tariff. This 300% imposition is extremely high: in most cases where the US has accused another country of 'dumping' produce at lower prices than US firms can match, the levy has usually been below 100% of the sale price: as has happened in recent years with imports of basic classes of steel from China.
Britain and Canada have pointed out that Boeing is one of the most heavily state-supported companies in the world; which, of course, cuts no ice with the US Administration.
This is a crude and simple case where a competitor to the US market leader has introduced a product [to which no US firm currently provides a direct competitor] which is obviously highly desirable to US airlines. So the new product is to be priced-out of the American market.
This can happen in any sector of the economy, where a foreign firm attracts American customers to a new or redesigned product: and it probably will, as the world becomes ever more highly competitive. This is a timely and salutary lesson for the bonkers Brexiteers: those who say that Britain can thrive on its own in the world, under WTO Rules. Whenever it suits the USA, Australia, Brazil, Russia or any other country - however comprehensive a trade agreement Liam Fox can dream up with them - they can say "We have imposed this tariff! The WTO can whistle for their rules to apply; and the UK can put its trade deal where the monkey put the nuts." At such times - and there would be an infinite number of them - a solitary post-Brexit Britain would suffer immense disadvantage. To imagine otherwise requires a high degree of intoxication in a very small mind.
In the 2016 Referendum I voted for exit from the political absurdity of the European Union. I did not vote for this nation to die slowly, of starvation. We must stay within the European Economic Area, on the best terms that can be obtained. As Mrs May's moribund government fails to say what it wants to achieve, with any precision, the Torygraph today has a banner headline to the effect that the EU has opened up stronger channels of communication with Mr Corbyn and his associates. Mr Corbyn has learned a lot in the past year - more than I had previously thought possible - but whether he can absorb this particular lesson in Political Economy before he comes to power remains to be seen.
The recent cause celebre in this category is the action that the US government has taken against the Canadian aircraft firm Bombardier at the instance of Boeing, a US-Based competitor. Britain has a particular interest in this case as the wings of the aircraft under challenge are made in Northern Ireland. In the first instance, last week, the US slapped a 220% tariff on the import of the 'planes on the grounds that the Canadian and British governments had given grants to Bombardier. Yesterday the US took a second bite of the cherry, and added another 80% tariff. This 300% imposition is extremely high: in most cases where the US has accused another country of 'dumping' produce at lower prices than US firms can match, the levy has usually been below 100% of the sale price: as has happened in recent years with imports of basic classes of steel from China.
Britain and Canada have pointed out that Boeing is one of the most heavily state-supported companies in the world; which, of course, cuts no ice with the US Administration.
This is a crude and simple case where a competitor to the US market leader has introduced a product [to which no US firm currently provides a direct competitor] which is obviously highly desirable to US airlines. So the new product is to be priced-out of the American market.
This can happen in any sector of the economy, where a foreign firm attracts American customers to a new or redesigned product: and it probably will, as the world becomes ever more highly competitive. This is a timely and salutary lesson for the bonkers Brexiteers: those who say that Britain can thrive on its own in the world, under WTO Rules. Whenever it suits the USA, Australia, Brazil, Russia or any other country - however comprehensive a trade agreement Liam Fox can dream up with them - they can say "We have imposed this tariff! The WTO can whistle for their rules to apply; and the UK can put its trade deal where the monkey put the nuts." At such times - and there would be an infinite number of them - a solitary post-Brexit Britain would suffer immense disadvantage. To imagine otherwise requires a high degree of intoxication in a very small mind.
In the 2016 Referendum I voted for exit from the political absurdity of the European Union. I did not vote for this nation to die slowly, of starvation. We must stay within the European Economic Area, on the best terms that can be obtained. As Mrs May's moribund government fails to say what it wants to achieve, with any precision, the Torygraph today has a banner headline to the effect that the EU has opened up stronger channels of communication with Mr Corbyn and his associates. Mr Corbyn has learned a lot in the past year - more than I had previously thought possible - but whether he can absorb this particular lesson in Political Economy before he comes to power remains to be seen.
Wednesday, 27 September 2017
Bombardier Bombarded: A Lesson for Brexiteers
The Canadian aircraft manufacturer, Bombardier, has suffered a huge blow at the hands of the US regulatory system: a tariff of 220% has been imposed on imports of its new aircraft to the USA: one of whose airlines has ordered 75 of the planes, with a further order pending. Both the British and Canadian governments have made grants to the company, to maintain its technological capabilities and to protect employment in Canada and in Northern Ireland; and Boeing, the US aircraft builder has cried 'foul' even though the new planes will not compete directly with any of their products.
Boeing has massive contracts with the US military and with NASA. The prices set on such products are necessarily sufficient to support the research and development that is necessary to design and build the craft and devices: thus giving Boeing a comfortable profit base that exempts the firm from any need openly to seek subsidies for its civil aviation sections. Bombardier - the former Short Brothers in Northern Ireland - now has little demand from the British defence sector, which is so strapped for funds that the national defences have been excessively depleted and the country only manages to present figures showing that it meets the NATO target of 2% of GNP on defence by cooking the books rather brazenly. It is absolutely essential that a country purporting to be any sort of power invests hugely in defence technologies, which are expensive. The more innovative the defences are, the more they are likely to cost: and the more effective they are likely to be. It is a quaint paradox that some of Corbyn's 'loony-left' colleagues are more likely to see this than are Tory Brexiteers, because they can see the linkage between economic development and military might in Russia, China and the USA.
On the same day as the US decision was taken on the new tariff, the British train building section of Bombardier also received very bad news. A long-planned consortium arrangement with Siemens to build a new generation of trains for the world market was abandoned by the German firm in favour of an alliance with the French firm, Alstom. This has, allegedly, been engineered at the behest of President Macron, whose government is reviewing all major sectors of the economy with a view to ensuring that the French presence in each, within a European context, is the best that it can be from a chauvinistic French viewpoint. Brexit Britain can expect many more similar snubs from the Macron regime.
Both these stories teach the lesson that an isolated Britain depending on free trade agreements under WTO rules cannot succeed. WTO rules do not prevent the US paying Boeing top prices for research of incalculable value. WTO rules will not stop President Macron's chauvinistic plans from coming into effect. Cash tariffs are trivial obstacles to trade, compared with regulations on product standards and safety that can be manipulated in to assist favoured products, and the 'needs of national defence'. The naive optimism of 'hard' Brexiteers is a form of idiocy. Unless the UK remains within the European Economic Area, with all its common standards and definitions, British firms and their products will be picked off [by being deemed not to meet standards] one by one, as their European competitors develop their capacity to supply the equivalent of their former exports.
British airlines and train companies are under no pressure to buy British: so the demise of the bombardier plant in Belfast and Derby is threatened. British jobs can be lost, and with them generations of accumulated knowledge: and the dimmer Tories won't even weep into their whiskies. Of course, there are intelligent people of conservative cast of mind: but few of them are content with the present deeply-riven government, and even fewer are comfortable about the prospect of a 'hard Brexit'. Despite his Marxist blinkers, John McDonnell shows some awareness of these issues. As the parties stand at the end of the Labour Conference today, Labour has the best of the bad arguments. I do not expect the Tories to gain any ground when they meet in conference next week.
Boeing has massive contracts with the US military and with NASA. The prices set on such products are necessarily sufficient to support the research and development that is necessary to design and build the craft and devices: thus giving Boeing a comfortable profit base that exempts the firm from any need openly to seek subsidies for its civil aviation sections. Bombardier - the former Short Brothers in Northern Ireland - now has little demand from the British defence sector, which is so strapped for funds that the national defences have been excessively depleted and the country only manages to present figures showing that it meets the NATO target of 2% of GNP on defence by cooking the books rather brazenly. It is absolutely essential that a country purporting to be any sort of power invests hugely in defence technologies, which are expensive. The more innovative the defences are, the more they are likely to cost: and the more effective they are likely to be. It is a quaint paradox that some of Corbyn's 'loony-left' colleagues are more likely to see this than are Tory Brexiteers, because they can see the linkage between economic development and military might in Russia, China and the USA.
On the same day as the US decision was taken on the new tariff, the British train building section of Bombardier also received very bad news. A long-planned consortium arrangement with Siemens to build a new generation of trains for the world market was abandoned by the German firm in favour of an alliance with the French firm, Alstom. This has, allegedly, been engineered at the behest of President Macron, whose government is reviewing all major sectors of the economy with a view to ensuring that the French presence in each, within a European context, is the best that it can be from a chauvinistic French viewpoint. Brexit Britain can expect many more similar snubs from the Macron regime.
Both these stories teach the lesson that an isolated Britain depending on free trade agreements under WTO rules cannot succeed. WTO rules do not prevent the US paying Boeing top prices for research of incalculable value. WTO rules will not stop President Macron's chauvinistic plans from coming into effect. Cash tariffs are trivial obstacles to trade, compared with regulations on product standards and safety that can be manipulated in to assist favoured products, and the 'needs of national defence'. The naive optimism of 'hard' Brexiteers is a form of idiocy. Unless the UK remains within the European Economic Area, with all its common standards and definitions, British firms and their products will be picked off [by being deemed not to meet standards] one by one, as their European competitors develop their capacity to supply the equivalent of their former exports.
British airlines and train companies are under no pressure to buy British: so the demise of the bombardier plant in Belfast and Derby is threatened. British jobs can be lost, and with them generations of accumulated knowledge: and the dimmer Tories won't even weep into their whiskies. Of course, there are intelligent people of conservative cast of mind: but few of them are content with the present deeply-riven government, and even fewer are comfortable about the prospect of a 'hard Brexit'. Despite his Marxist blinkers, John McDonnell shows some awareness of these issues. As the parties stand at the end of the Labour Conference today, Labour has the best of the bad arguments. I do not expect the Tories to gain any ground when they meet in conference next week.
Monday, 21 August 2017
Carney in Jackson Hole
Mark Carney is due soon to return to Canada and make a political career in an environment free of worries about the pound sterling, the European Union and Theresa May. While Trump survives in the US presidency there will be a small risk for Canada in the future of the North American Free Trade Area, but in other respects Trump cannot hurt Canada; and if his failures drive down the value of the US dollar, this will be to the benefit of the Canadian currency and economy. Britain's problems may be of passing interest to Mark Carney post-Bank of England, but he will have [nor will he want] any part in addressing them.
George Osborne is a co-culprit with Cameron and Clegg in most of the disastrous aspects of the Coalition and subsequently the Conservatives' economic policies, but it is generally accepted that he alone drove through the decision to bypass Bank of England insiders, and all other Brits who might have had a claim to be considered as Governor of the Bank of England, and opt to advise the Queen to appoint the clever Canadian. Carney was appointed when the policy of Quantitative Easing and low interest rates had been entrenched by the previous management of the Bank, who had reacted to the meltdown of world banking as a crisis of moral hazard until Chancellor Alastair Darling sounded the alarm and compelled them to act positively [if not entirely sensibly]. Since his appointment, in retrospect, Carney has not had much to do. His 'forward looking' comments about the British economy in context, and what the Bank may or may not do about lending and about interest rates have all been falsified by events; to the extent that some journalists have made a joke of his predictive capabilities. He participated in 'project fear', the campaign to scare the British electorate into voting to remain in the European Union even after the continentals had grossly insulted David Cameron [and, by implication the country that he represented] by their contemptuous dismissal of his half-hearted attempt to make the"ever-closer union" less objectionable to sensible Brits. When the referendum result was announced, before there was time for any deep observation of its short-term impact on the economy and on the currency, Carney led his outfit into panicky and wrong decision to lower interest rates further and to continue 'printing money' that the banks could then lend and drive asset prices [especially house prices] ever higher even as real wages continued to fall.
Mark Carney seems a pleasant man, and has a reputation for high intelligence. His record in Canadian banking is excellent: his record at the Bank of England gains him nul points. Later this week he goes to the US ski resort of Jackson Hole to meet the other governors of central banks, with a massive audience of media, to exchange platitudes. The real meetings of central bankers, that matter, occur in the context of the Bank for International Settlements at Berne; and sometimes the governors have influence when they gather with their countries' finance minister in the context of the G20, G8 [or whatever number gather, dependent on which countries are in favour with the USA]. The annual performance at Jackson Hole, beside allowing opportunity for some private chatter and data swapping, allows some more speculative statements to be made. This year, it is expected that the Chair of the US Federal Reserve Board will indicate the approximate scheduling of future interest rate increases; and that the Chairman of the European Central Bank will indicate that it is his organisation's plan to begin policy tightening, within the next year. Carney will have nothing to say. The Bank of England is still stuck like the proverbial rabbit in the headlights, mesmerised by Brexit, Trump and the fear of Britain being alone in the world without a Churchill able to summon up the Few, the Dunkirk Spirit and the resources that were handed to stand-alone Britain by President F D Roosevelt.
Mr Carney's children have already gone back to their Canadian educational institutes, and he will follow them soon. He has learned a lot, but been unable to do anything. His experience in Britain has fitted him better for his future career in Canada; and Britain gained nothing from his presence with us here.
George Osborne is a co-culprit with Cameron and Clegg in most of the disastrous aspects of the Coalition and subsequently the Conservatives' economic policies, but it is generally accepted that he alone drove through the decision to bypass Bank of England insiders, and all other Brits who might have had a claim to be considered as Governor of the Bank of England, and opt to advise the Queen to appoint the clever Canadian. Carney was appointed when the policy of Quantitative Easing and low interest rates had been entrenched by the previous management of the Bank, who had reacted to the meltdown of world banking as a crisis of moral hazard until Chancellor Alastair Darling sounded the alarm and compelled them to act positively [if not entirely sensibly]. Since his appointment, in retrospect, Carney has not had much to do. His 'forward looking' comments about the British economy in context, and what the Bank may or may not do about lending and about interest rates have all been falsified by events; to the extent that some journalists have made a joke of his predictive capabilities. He participated in 'project fear', the campaign to scare the British electorate into voting to remain in the European Union even after the continentals had grossly insulted David Cameron [and, by implication the country that he represented] by their contemptuous dismissal of his half-hearted attempt to make the"ever-closer union" less objectionable to sensible Brits. When the referendum result was announced, before there was time for any deep observation of its short-term impact on the economy and on the currency, Carney led his outfit into panicky and wrong decision to lower interest rates further and to continue 'printing money' that the banks could then lend and drive asset prices [especially house prices] ever higher even as real wages continued to fall.
Mark Carney seems a pleasant man, and has a reputation for high intelligence. His record in Canadian banking is excellent: his record at the Bank of England gains him nul points. Later this week he goes to the US ski resort of Jackson Hole to meet the other governors of central banks, with a massive audience of media, to exchange platitudes. The real meetings of central bankers, that matter, occur in the context of the Bank for International Settlements at Berne; and sometimes the governors have influence when they gather with their countries' finance minister in the context of the G20, G8 [or whatever number gather, dependent on which countries are in favour with the USA]. The annual performance at Jackson Hole, beside allowing opportunity for some private chatter and data swapping, allows some more speculative statements to be made. This year, it is expected that the Chair of the US Federal Reserve Board will indicate the approximate scheduling of future interest rate increases; and that the Chairman of the European Central Bank will indicate that it is his organisation's plan to begin policy tightening, within the next year. Carney will have nothing to say. The Bank of England is still stuck like the proverbial rabbit in the headlights, mesmerised by Brexit, Trump and the fear of Britain being alone in the world without a Churchill able to summon up the Few, the Dunkirk Spirit and the resources that were handed to stand-alone Britain by President F D Roosevelt.
Mr Carney's children have already gone back to their Canadian educational institutes, and he will follow them soon. He has learned a lot, but been unable to do anything. His experience in Britain has fitted him better for his future career in Canada; and Britain gained nothing from his presence with us here.
Saturday, 15 October 2011
Democracy, Debt and Doubt
As the G20 Finance Ministers and Central Bank Governors meet in an autumnal Paris they are all acutely aware of the historical context of the meeting. They have all been briefed on what happened to the global economy in the years from 1929 to 1936, and what were the particular effects of the Great Depression on their own countries.
The Chinese have studied how the impact of the depression on a country that had notionally been through a democratic revolution, but which had seen only minimal structural change in the economy, was rendered even weaker than before and more susceptible to the imperialist ambitions of Japan. Those ambitions led to one of the most brutal colonialist wars in modern history, and left the unoccupied areas of the vast country prey to warlords. The Japanese withdrawal was followed by a partial Soviet occupation [of Manchuria] and a no-holds-barred civil war in whose aftermath the communists inherited a prostrate economy and a disintegrating civil society; which the new regime began to restructure on doctrinaire lines that represented a 'historial discontinuity'.
Japanese and Russian representatives in Paris knew that the debilitating effect of the depression on the the old industrial countries had left those former 'international policemen' unable to intervene in faraway countries, which were left to pursue whatever policies were selected by their non-representative regimes: Japan decided upon reckless imperial expansion and intensified political oppression at home; while the then-Soviet Union stepped up the incompetent processes of collectivisation of agriculture and overambitious industrial expansion combined with oppression on a gargantuan scale.which left the country in an advanced state of debilitation ahead of the German invasion of 1941.
Germany, France and Italy recall all too clearly that the depression was seen as the context for the consolidation of Mussolini's power in Italy and Hitler's rise to power in Germany. The restoration of national morale in Italy and Germany under the Fascists fostered the hubris that led them into aggressive war; while the absence of such a fillip to French society and the French economy helped to ensure the collapse of France in 1940 and the willing acceptance of their occupiers and of their puppet government by most of the French.
The English-speaking countries all recognise the Great Depression as perhaps the most decisive step in the shift of global economic pre-eminence from Britain to the USA, which both suffered serious social problems as their economies plunged into the depression. Canada, Australia and New Zealand were forced to increase their autonomy from the 'mother country' during the 'thirties, in the worst of economic circumstances: only to find themselves in 1939 responding to the call to support the British war effort - which they did unstintingly, though their role in the Second World War proved to be a major step in their maturation as sovereign states. The depression also signalled the coming of the end of the British Raj in India: although the imperial power was able to mobilise the sub-continent for the war, despite the fact that the unsustainability of the regime in the postwar world was evident.
Every other participant in the present Group of 20 'leading nations' has memories of the trauma that affected them in direct consequence of the Great Depression: so they all share a determination to take any sensible steps to prevent any re-run of that cataclysm. But they lack a clear and radical economic perspective from which they could possibly devise any 'magic bullet' solution. The nature of the economic crisis is becoming clearer: its potential political fallout is recognised. But the search for a solution lies in economic policy, and the men and women who have this formidable responsibility are looking for guidance into a soup of discredited economic theory, imperfect statistics and glib back-of-a-fag-packet propositions. They will not find any answer to their dilemma in the resources that are currently available to them..
The Chinese have studied how the impact of the depression on a country that had notionally been through a democratic revolution, but which had seen only minimal structural change in the economy, was rendered even weaker than before and more susceptible to the imperialist ambitions of Japan. Those ambitions led to one of the most brutal colonialist wars in modern history, and left the unoccupied areas of the vast country prey to warlords. The Japanese withdrawal was followed by a partial Soviet occupation [of Manchuria] and a no-holds-barred civil war in whose aftermath the communists inherited a prostrate economy and a disintegrating civil society; which the new regime began to restructure on doctrinaire lines that represented a 'historial discontinuity'.
Japanese and Russian representatives in Paris knew that the debilitating effect of the depression on the the old industrial countries had left those former 'international policemen' unable to intervene in faraway countries, which were left to pursue whatever policies were selected by their non-representative regimes: Japan decided upon reckless imperial expansion and intensified political oppression at home; while the then-Soviet Union stepped up the incompetent processes of collectivisation of agriculture and overambitious industrial expansion combined with oppression on a gargantuan scale.which left the country in an advanced state of debilitation ahead of the German invasion of 1941.
Germany, France and Italy recall all too clearly that the depression was seen as the context for the consolidation of Mussolini's power in Italy and Hitler's rise to power in Germany. The restoration of national morale in Italy and Germany under the Fascists fostered the hubris that led them into aggressive war; while the absence of such a fillip to French society and the French economy helped to ensure the collapse of France in 1940 and the willing acceptance of their occupiers and of their puppet government by most of the French.
The English-speaking countries all recognise the Great Depression as perhaps the most decisive step in the shift of global economic pre-eminence from Britain to the USA, which both suffered serious social problems as their economies plunged into the depression. Canada, Australia and New Zealand were forced to increase their autonomy from the 'mother country' during the 'thirties, in the worst of economic circumstances: only to find themselves in 1939 responding to the call to support the British war effort - which they did unstintingly, though their role in the Second World War proved to be a major step in their maturation as sovereign states. The depression also signalled the coming of the end of the British Raj in India: although the imperial power was able to mobilise the sub-continent for the war, despite the fact that the unsustainability of the regime in the postwar world was evident.
Every other participant in the present Group of 20 'leading nations' has memories of the trauma that affected them in direct consequence of the Great Depression: so they all share a determination to take any sensible steps to prevent any re-run of that cataclysm. But they lack a clear and radical economic perspective from which they could possibly devise any 'magic bullet' solution. The nature of the economic crisis is becoming clearer: its potential political fallout is recognised. But the search for a solution lies in economic policy, and the men and women who have this formidable responsibility are looking for guidance into a soup of discredited economic theory, imperfect statistics and glib back-of-a-fag-packet propositions. They will not find any answer to their dilemma in the resources that are currently available to them..
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