O tempora! O mores!

I missed this in the summer.  I know there will be some who find the exuberance of Boris a bit much, but there's something rather magnificent in having as Mayor of London a man who can open an exhibition of the Emperor Hadrian in Latin.  Beats Tony Blair's French anyway.  Extra kudos for describing the Italian ambassador as the representative of the former colonial power, and for praising Hadrian's efforts to keep 'the Caledonians' in their proper place...

Aargh - on that subject

I know that kicking Polly Toynbee for economic ignorance is like shooting, well a whale in a barrel, but here's another bit of elementary ignorance that ought to be caught at first bloody instance.  Such as:

Mervyn King can't admit his mistake in keeping interest rates so high for the past year as this crisis brewed. Only personal pride stops the MPC meeting immediately, confessing its error and cutting rates by 2%.

She must know that the Monetary Policy Committee has one remit: to maintain inflation at an annual rate of on or about 2%.  Surely she must know that?  And that therefore, retaining relatively high interest rates is necessary.  It is in fact another aspect of Brown's masterstroke of giving 'independence' to the Bank of England was that all the implications of setting interest rates - stimulating demand, strengthening the currency, controlling house prices and so on - were reduced to the single aim of controlling CPI inflation.  So if Polly wants to attack the fact that interest rates have been too high to stimulate demand, she should be addressing her complaints to the man who removed demand control from the agenda.

Toynbee also refers to economists that doubt whether Keynesian economics can truly work (and there are a lot of them who agree with Winston Churchill that a Government trying to borrow and spend itself out of recession is like a man standing in a bucket, trying to lift himself up by pulling on the handles) are 'neo-conomists'.  This is the most grimly anti-intellectual neologism I've seen in ages.  I expect to see it in common Guardian parlance before the week is out.

The limits of journalism

In discussing the tide of world events that have rained down upon us, journalists are rather hampered by a specific problem - the ones that get the big headlines know next to nothing about economics.  This is something of a problem - how much do you want to bet that the people writing scare stories about the Lehman's CDS auction had never heard of the damn things a year ago?

Why is it that the wave of stories last year about galloping oil prices never mentioned the slumping value of the dollar as a prime cause?  Why is that the wave of stories this year about the shock fall in oil prices don't mention the soaring value of the dollar as a prime cause?  For God's sake, if you're going to use the dollar value per barrel as your measurement, don't you think currency values are worth mentioning?

Anyway, the purpose of this little rant (and God knows I know little enough about economics) is to explain something that might seem a little odd.  We after all about to enter a serious recession, one that will impact most heavily in the UK on the service sector, and one which does not have an instantly explainable 'cause', and what are the papers full of?  Yachts and the Bullingdon club, and Peter Mandelson.  It seems bizarre - like an in-depth focus on party funding would have been in August 1914.  But the reason for it is obvious - it makes a much easier story.  Journalists, then, are lazy and ignorant - which is why I would be so ideally suited…

Osborne, Mandelson and Russian yachts

Well, Labour have missed Peter Mandelson haven't they! His revenge for the leaking of the news that he 'dripped poison' into George Osborne's ear about Gordon Brown has been swift and harsh. For what it is worth, I doubt that there is all that much in this story - businessman with substantial UK interests considers making donation to political party, but it is not accepted. However, the timing has been providential for Labour.

BBC coverage has been rather odd I thought. After all they were notably unkeen on making anything at all of Mandelson's own meeting with Deripaska, and are now running with this story as hard as they can. Some have questioned Robert Peston's impartiality in the matter, but what strikes me as oddest is both the apparent triviality of the matter and the way in which the only 'killer' accusation in Rothschild's letter - that the Tories 'solicited' the donation has been denied - to the point of legal action - and subsequently ignored by the media.

So - what did happen? The best way is probably to decipher the Tory statement, notable as much for what it did not say as for what it did:

For clarity – neither Mr Feldman or Mr Osborne have ever discussed with Oleg Deripaska the possibility of him making a political donation. At no point in any of these meetings and discussions did either Mr Osborne or Mr Feldman solicit or attempt to solicit a donation from Mr Deripaska. Nor did they at any stage suggest any way that a donation could be channelled or concealed through a British company.

So, what is not denied there is that it was proposed by Deripaska that he make a donation through a British company - Leyland Daf. This proposed donation was rejected. If that's all there is to this story, then it should peter out pretty quickly. The next thing to watch will be whether the threats of litigation against the Times go anywhere...

The limits of narrative...

OK, so I have a definite fixation on the importance of political narratives.  And, when I got back from India, I detected a new narrative in the process of being created: Brown the superhero, whose grasp of economics had re-invigorated his premiership and put Labour back in contention; the economic crisis had been averted only by Brown's prompt action.

Now the thing about narratives is that they only stick when they have an innate plausibility.  No point trying to make Boris look like a far-right thug - it lacks credibility. No point trying to make Gordon Brown into a glamorous figure - he simply isn't. But two questions do arise: can they make Brown look like the saviour of the situation; and will it matter electorally?

On the first point, they might well do, in the short term at least. The financial sector has been shored up against collapse, and a mass failure of the banks now looks unlikely. However, this will not avert a recession - could not in fact, since the recession was the cause of the financial crisis, not its result. Once the recession starts to bite, however, the public will forget the rescue of Bradford & Bingley, except insofar as to question why their company isn't being bailed out. So, as to Brown's long-term image I'm not sure how much the recent events will matter.

And, with regard to the second question, it probably won't matter anyway. People have stopped listening to Labour. There are no real cabinet heavyweights except for Peter Mandelson - a name indelibly linked with lies and sleaze. The politician to have lost most from the credit crunch so far has been David Miliband - Labour have almost certainly lost their chance to replace Brown before the next election.  And even now, at a time when wall-to-wall coverage of Labour is drowning out the Tories and Lib Dems, Labour is well behind in the polls - by 12 points in ICM's latest. For all the efforts of Labour and their supporters, this narrative of doom and defeat is too firmly entrenched in the public imagination to be dispelled that quickly.

Obama: good news, bad news

Well, it's looking more and more likely that Obama will win the US election - the financial catastrophe has hammered in a few final nails into McCain's coffin.  And I reckon there's good news and bad news about this, not considering the actual political result.

The good news is that those people who have sheltered behind their irrational hatred for George Bush for the last eight years will finally be forced either to shut up, or to acknowledge that actually they really do dislike America in all its guises.  We'll also be spared a million trite Guardian articles about Bush-Cheney-Halliburton-oil-you name it.  Some consolation there I reckon.

On the other hand, we are going to be told, repeatedly, that any criticism of the Obama presidency is inherently racist.  I'm already bored of this, and it's been going on for about six months - there's years and years to go...

Britblog round-up

The round-up is here.  The religious are idiots (and misogynists to boot), those opposed to abortions are immoral, and everything's the fault of the bankers.The right-of-centre dominance of the blogosphere is clearly a myth...

Just one quick thing

I'm still not back properly yet, but I do have to say one thing.  The Tories are right to focus on Labour's (and Brown's) apparent enjoyment of the current financial crisis.  This isn't a triumph, it's still a knife-edge of disaster or complete fucking disaster.  There is no good outcome here - only a less bad one.  That's why this current fashion for comparisons with the Falklands War is so fatuous. Michael White is responsible for one today.

Yes, the Tory Government was in trouble before deus ex machina a crisis happened.  Yes it's fair to say that, just as with BRown and the financial crisis, the Tory Government bore a measure of culpability for the invasion (though only in the sense that a woman in a short skirt is asking to be raped - an analogy very few of the 'Thatcher was to blame' pundits would acknowledge).  The similarities, however, end there.

With the Falklands there was a cartoon bad guy: General Galtieri and his junta of uniformed thugs; there was a clear course of action: send in the task force; there was a concrete and definite victory: mass Argentine surrender and the recovery of the Falklands; and then there was a victory parade.  With this crisis there is no specific villain; there is no clear course of action and there can be no concrete and definite victory.  There will certainly not be a victory parade. If eberything goes according to plan there will be a recession rather than a depression. Don't buy shares in bunting manufacturers.

Whereas the question of who was to blame for the Argentine invasion (leftist academics and politicians said Thatcher, everyone else said, um, the Argentines themselves) was rather irrelevant, the question of who was to blame for the financial crisis will not be.  Relaxation of monetary policy, a focus on a skewed inflation target, a hose price bubble, uncertain financial regulation - Brown is directly or indirectly responsible for all of them.  Interest rates will have to be cut (unless we want a depression) but that will lead to higher inflation. Brown ought to wipe that smirk off his face  - we're a long way from Port Stanley.

Blimey

Anything much happen while I was away?

MENE, MENE, TEKEL, UPHARSIN

Frightening times.

So now we have it - the response to the serious economic crisis announced by the Government to the House yesterday is... empty. It has done... nothing. It has clarified... that there is no plan.

As expected it will dither and dother, delay and prevaricate until all is too late.

In these situations there must be a sense of activity and energy - and we instead have a team of people standing by as the final proof of their ineptitude is writ large on the wall: Thou hast been weighed in the balance and found wanting.

One finds ones thoughts moving to Churchill - specifically his commentary on his speech on air parity to the House during which he said that a poem kept running through his mind:

Who is in charge of the clattering train?
The axles creak and the couplings strain,
And the pace is hot, and the points are near,
And sleep had deadened the drivers ear,
And the signals flash through the night in vain
For Death is in charge of the clattering train.