Why on earth would the Queen be embarrassed by the BNP? It's in the family

Interesting news that BNP leader Nick Griffin has decided to pull out of attending a Buckingham Palace garden party in July "for fear of embarrassing the Queen". 

Whilst my main advice to Mr Griffin on his future schedule is that he should flush himself down the nearest public convenience en route to where he belongs - in the sewer - I'm surprised that journalists and commentators should feel the Queen would be embarrassed by Mr Griffin. Fascism runs in the British royal family. The Queen's uncle, Edward VIII (latterly the Duke of Windsor) was a well known Nazi sympathiser, and the Queen Mother was apparently a staunch supporter of the 1980s Botha regime in South Africa. With people like these as ancestors, the Queen would have probably been able to have a perfectly reasonable conversation with Griffin. But instead she will have to make do with the BNP's Greater London Assembly member Richard Barnbrook instead. Oh well. If only the Queen Mother was still alive to say "I like that Richard Barnbrook, he's the kind of fellow this country needs..."

For a Church that supposedly lacks moral leadership, these guys are doing a damned good job

Absolutely excellent intervention by Church of England Archbishops Rowan Williams and John Sentamu on the BNP today. Basically saying "please do not vote for these people under any circumstances". 

The C of E is often accused of lacking "moral leadership" but on this issue the archbishops have grasped the nettle and rightly so. 

The BNP's Nick Griffin says it is time the church "grew up" and started talking to them about issues. 

Well, one issue is that a message of hate for anyone non-British (which is the BNP's basic stance - that's what the 'voluntary repatriation policy' boils down to) seems to my, admittedly not well-informed religious compass, fundamentally at odds with any reasonable interpretation of the Christian message. 

I went to a (C of E) Christening service for a family relative's baby in Halifax a few years back. The priest's sermon was in many ways woeful - he went on a diatribe against gay priests while saying that although he himself had split up with his wife, that was OK because "it's above board and everybody knows about it". It was like something out of a David Peace novel. So the guy was objectionable and woefully inconsistent, but even so, he still spent ten minutes explaining why it was important to mobilise against the BNP in Halifax and encouraging people to attend public marches and demonstrations. 

The Church of England has many faults (although not as many, I would argue, as the Roman Catholic or Orthodox churches, both of which are far more reactionary in most ways)  but putting up with fascism isn't one of them. And Amen to that.

Also big props to Polly Toynbee of the British Humanist Association, who issued a statement supporting the archbishops. If we can get (sane) non-religious people and (sane) religious people pulling in the same direction on these issues, that's got to be the way forward. 

Expensesgate: the political fallout

• More than 2 weeks into the Telegraph's expenses scandal, and I'm still riveted by it. I can understand that many people will be bored stiff by the whole thing, but it may still be that some of the best is yet to come.

For example, Tory MP Anthony Steen spectacularly misjudged the public mood by saying that the only reason people were angry was because they were jealous of his big house, and that Freedom of Information legislation had been a Very Bad Thing because it had fed public envy. He seemed to have conveniently forgotten that these bastard taxpayers were paying for his goddamn trees to be maintained. Pay the piper, call the tune.

Sir Peter Viggers (why are they giving honours to wankers like this)'s floating duck island was also a rare moment of high comedy. Well done mate.

But it's not clear yet to what extent Expensesgate will manifest itself in changes to voting intentions. The latest ICM survey in the Guardian compares European election voting intentions with the results in 2004. Some noteworthy findings are:

• Labour on 24%, 1% above its 2004 polling.
• Greens at 9%, up from 6% in 2004.
• UKIP on 10%, down from 16% in 2004. If these figures are right, reports of a big swing to UKIP are simply wrong.
  
• BNP on 1%, down from 4% in 2004.

I'm not sure I believe that BNP result - it's highly likely that they are up at about 10% (say) and people are too embarrassed to admit to pollsters that they're voting for them. So as well as being fascist tossers, BNP voters are cowards as well. Quelle surprise.

These poll results don't indicate a seismic shift in voting intentions though, especially bearing in mind that the Euro elections are much more likely to attract a protest vote than a Westminster election. If the Tories and Labour were both down below 20% then we would begin to see some interesting gains for minor parties, even under first-past-the-post. But, unless there is a wave of independent Martin Bell-type challengers (certainly possible), the expenses scandal is not on course to upset the Westminster applecart - yet. For that to happen, public outrage has to translate to much bigger shifts in voting intentions.

Enough to give anyone a severe distrust of the Catholic Church

Absolutely frightening revelations from Ireland's Commission to Inquire Into Child Abuse.

As the Guardian reports, "thousands of boys and girls were raped, abused and exploited by the religious brothers and nuns who were supposed to look after them."

I knew a bit about this anyway as my grandmother used to tell stories about being regularly beaten by nuns in school in Ireland (she was an orphan).

All this will horrify rank-and-file Catholics as much as the rest of us. I just hope that reforms have been put in place to stop this kind of thing ever happening again. But given the reactionary nature of the present Pope it is hard to hold out hope of fundamental reforms. The problem with the Catholic Church is exactly the same as the problem with Nazi Germany or Stalin's Soviet Union - when you have an authoritarian unelected apparatus with no accountability, it will inevitably attract people who feel that their vocation is to bully, exploit and torture people. In the end, democratic accountability is the only way forward for religious institutions, just like political institutions.

It is very unlikely that I would ever join up to the Christian religion - although not impossible. But if I did, it would have to be one of the denominations which gives power to the rank and file - for example the Methodists or the Quakers.

Not sure really why I'm blogging in any detail about this, given that I'm no Christian and certainly no Catholic. I guess it just struck a family chord.

Who's gonna get it (in the neck?)

The last instalment in a three-post series analysing what the most likely - and (probably not the same) the most desirable - scenarios are for the next Labour leader.

As each day passes I'm driven towards the conclusion, which many of you will have reached already, that Labour is headed for an absolute landslide defeat. Probably down to less than 200 seats in the next parliament.

Polly Toynbee has recently been converted to the view that Brown should go before the next election - in fact, that he should step down now. She is now backing Alan Johnson as an alternative leader. This is a turnaround from the last few months, when she was saying Brown was the only hope - and then before that, in mid-2008, when she was saying Brown must go - and then before that, in 2007, when she was saying Brown was the best thing since sliced bread. I think Polly is very good on most things, but on this particular subject, she's lost it.

I don't think Johnno would do much good at this stage anyway. There's not enough time to put together a coherent political strategy between now and next June. The main battleground (apart from MPs' expenses) is the economy, where Alan has not really had much experience (not that Cameron or Osborne have either, but there you go). In 2006/07, even in 2008, I was saying yes to a Johnno bid for the leadership, but I think it's too late now.

I think Polly Toynbee is wrong anyway: best to let Gordon Brown take the hit and preside over an annihilation of the New Labour project. Then we can start over. It sure as hell ain't gonna be easy. But it doesn't have to be such a complete cock-up as the William Hague/Iain Duncan Smith era was for the Tory party.

Why? Because the Tories made the mistake of retreating into a more extreme version of the Thatcherite policies which the voters had soundly rejected in 1997. Hague and Duncan Smith were hard-line Thatcherites.

The analogue would be if a rump Labour party just retreated into a hardcore Blairite or neo-Blairite agenda - Alan Milburn/John Hutton/Steve Byers territory - after the next election. But I don't see any reason why they'd do this. The main leadership contenders - the Milibands and Cruddas - don't have a huge ideological attachment to Blairism. (OK, I'm not totally sure about David Miliband, but we'll come back to that). The party base and the unions sure as hell don't want it. Whether the parliamentary Labour Party wants it depends on its composition after the next election, which would take me too long to analyse at this point, but I would imagine that most MPs will be flexible enough to try a move away from the Blair/Brown agenda, rather than more of the same thing that has just destroyed the party electorally.

So, with Blairism (and Brownism, which is much closer to Blairism than most people think) discredited, there will be a space for genuine radical thinking in the Labour party - in the same way that Dave Cameron moved in with genuine (for the Tories) radical thinking after 2 election defeats for the post-Thatcherite agenda in opposition. The main thing, though, is that whoever the leader is, they need their shit together from day one (or at least Year One). Labour cannot afford to f*** about in opposition in a Tory 1997-2005 style, let alone a Labour 1979-83 style. (In fact Labour can't afford much of anything as the party owes millions - they will probably have to go bankrupt and start again - but due to the wonders of modern bankruptcy law designed to encourage 'entrepreneurial behaviour', that's no great problem, so we won't worry about it.)

Who should the next Labour party leader be? I would be happy to see either Jon Cruddas or Ed Miliband do it. Cruddas has the advantage that his powder is very dry, politically speaking - he's not been a government minister at any time - and he has a reputation for plain speaking coupled with an intelligent and logical analysis of political issues, which is an unusual combination. (Many current political heavyweights don't have even one of those attributes, let alone both). Ed Miliband has managed to be about as radical as one can be in the present New Labour cabinet without actually getting kicked out, and has been reasonably effective as Climate Change Secretary - overturning at least some of the shitty decisions that Gordon Brown has made on the environment. He's also a very good speaker, albeit with less of the common touch than Jon Cruddas. On the flipside, he's younger than Cruddas (but I don't know if youth is really that important. Ming Campbell was supposedly deposed from the Lib Dem leadership for being too old, but Vince Cable is one of the most popular politicians in Parliament, and he's almost as old as Campbell. Go figure.)

David Miliband, some journalists' favourite choice, would be less my inclination, partly because I felt the guy sucked up to Tony Blair far too much (indeed my nickname for him was "microBlair" at the time), and partly because I'm not really sure he has the same kind of progressive ideological backbone that Ed has. That's no barrier to a successful top-flight ministerial career - indeed he has already achieved that, as Foreign Secretary - but a decent Labour Party leader needs to have strong ideological convictions. The fatal flaw of Tony Blair was that he didn't in general - and on the occasion he did, they were brainstormingly right-wing. Gordon Brown claimed to have strong ideological convictions, but we've seen precious little of them from him as PM. In fact we've seen precious little of anything from Gordon - the word 'failure' doesn't even begin to cover it.

Other options for leader look dreadful or unrealistic. I've already covered Alan Johnson; I think he'll be seen as too old and he won't really want it anyway, except as a caretaker - but why go for a caretaker when you can have the real thing? The arguments against Jack Straw are pretty much the same as Johnson. Harriet Harman is popular with certain activists but would go down like a lead balloon with the public, and is not as radical as she claims to be, by any stretch. The old guard of Blairites - Milburn, Clarke, Byers, etc. - are delusional if they think they can run successfully for the leadership. How, exactly?

James Purnell is an interesting one. My instincts on Purnell are that he's pretty duff but an acquaintance of mine who works for him suggests otherwise, and as this acquaintance is not in the habit of talking bollocks, I have to at least weigh that in my deliberations. According to Guardian journalist Allegra Stratton, there is some kind of backroom plot among Blairites to pair up Purnell and Jon Cruddas in some kind of 'dream ticket' (a phrase last used about the Neil Kinnock- Roy Hattersley combination, which admittedly was somewhat underwhelming). I'm inclined to think this is just yer standard "journo attends think-tank party and is desperate to write something" bollocks - but it is nonetheless marginally intriguing.

You can assume that any Labour MP not mentioned here in connection with the leadership is either too boring, too extreme (which doesn't mean they wouldn't be good - John McDonnell, for example, would be a class act as leader, but he just ain't got the power base to run for it) or too damn heinous to spend any time on. But we can always come back to this as I don't think that election will be any time soon, no matter what expenses claims excitement emerges from the woodwork.

Best football article EVER in a national newspaper

Steven Wells (who I remember from my NME-reading days: his Fish interview in 1989 was a classic) on why the Premiership should be nationalised.

I can't disagree with a word of this. Classic stuff.

The Boys are Back in the Bubble... Worrying signs on QE?

An interesting piece from Edmund Conway of the Telegraph on quantitative easing here. Conway's political stance sucks (the Institute of Economic Affairs has never published "an excellent pamphlet", and given that for the last 60 years they have been advising governments to reduce regulation of all markets as much as possible, their claim that the credit crunch was caused by lack of financial oversight, while true, identifies them as culpable, along with the rest of the Right wing) but his basic argument looks sensible, and is pretty terrifying.

Conway's basic allegation is that investment banks and hedge funds are making money by buying government debt at cheap prices, and then selling it back to the government (via the quantitative easing operations) at higher prices. I don't have the price data to hand to check this one way or the other, but if it's true, basically the government is handing out taxpayers' money to investment banks and hedge funds. Yes, it's boosting nominal economic activity, but at vast taxpayer expense, and for how long?

Buying private sector debt, not government debt, would be a far better policy, and I don't know why the Bank of England isn't doing that. Hell, printing extra banknotes and dropping them in the street would be a better policy.

It looks like all we're doing is inflating a new bubble to take the place of the old one. That would explain the brief stock market rally of the past few weeks. Forget "green shoots": stage 2 of the economic implosion could be even worse than what we've had so far. Stock up on canned food, kids.

Gorbals to Martin

Good to see that a no-confidence motion in House of Commons Speaker Michael Martin is being tabled for next week. The motion is tabled by Tory MP Douglas Carswell but has support from a selection of MPs in all parties. 

Martin is the absolute definition of a real turkey. When the allegations regarding MPs' abuse of the expenses system surfaced, he took a "my MPs, right or wrong" attitude and decided to ask police to investigate the source of the leak to the Telegraph.

When criticised for this by Labour's Kate Hoey and the Lib Dems' Norman Baker, he then lashed out at both MPs. To Hoey, he said "I listen to you often, when I turn on my television at midnight, and I hear your public utterances and your pearls of wisdom on Sky News. It's easy to talk then." To Baker: "another member who is keen to say to the press what the press wants to hear."

The implication being: what, exactly? That MPs who talk to the media are not doing their job properly? 

The man is a cretin and should be removed from his position. There are 650 MPs and almost all of them could do a better job as Speaker, I don't doubt.  The Speaker is, by convention, unopposed by the other parties when standing at elections, but given how duff this guy is, if he stays in the post there's a good chance an independent challenger could beat him. Which would be a cause for celebration. 

Who wants it? Continued

As promised last week, more thoughts on who might become Labour leader after the next election will emerge from this blog shortly. Today, I want to give you my overall take on what the most desirable post-election scenario is, in terms of how badly Labour is defeated. 

Although the present MPs' expenses scandal is now turning to backbench Tory MPs claiming for swimming pools and the upkeep of their country mansions, which may rub off rather badly on the Conservatives, on balance I think it's a safe bet to assume that the Government will come off worst from this because they are the people who should have been doing something about it. 

Combined with McBridegate and all the other crap that has happened over the past 2 years, it seems to me almost inconceivable that Labour could now emerge from the next election with an overall majority. I think a general election campaign would narrow the poll gap between the two parties, mainly because the economy would be a key focus, and although Labour's promises of an end to boom and bust have been revealed as total eyewash, the Tories - and in particular George Osborne - still look completely unconvincing in terms of economic policy. Does anybody know what they would do differently to Labour if in power? OK so they might be deliberately vague in the style of pre-1997 Tony Blair, but Labour at least had a few soundbites to rely on - "more teachers", "tough on crime" etc. The Tories haven't even got that. 

Having said that, Cameron is popular (largely because the British people seem to have this obsession with political leaders being carbon copies of Tony Blair, for reasons I will probably never understand. We have two of them now - Cameron and Clegg...)  and so I think the Tories will at least be the largest party. Because of the bias in the electoral system, they probably need to be around 6 points in front to secure an overall majority - which again, is likely.

From my POV the relationship between number of Labour seats and my confidence in the prospects for Labour going forward (in terms of becoming a real force for positive political change in this country) is U-shaped. The scenario of a hung parliament, and the scenario of a complete wipeout - Labour reduced below 200 seats or so - are both more appealing than a clear but not landslide defeat - say a Tory majority of around 50. 

Why? Because a hung parliament or a wipeout offer more opportunity for change and less opportunity for more of the crap we've had to endure over the last 11 years. 

In a hung parliament the Conservatives would probably go into coalition with the Lib Dems. If Clegg has any political ability whatsoever (still largely unproven either way), some form of proportional representation would have to be introduced. Which could lead to a huge political realignment, with at least 4 main parties: 

• hard right (low tax Eurosceptic. David Davis, Michael Gove, maybe George Osborne. ).
• centre-right/post-Blairite (authoritarian, stealth privatisation of public services. Dave Cameron, Steve Byers, Alan Milburn, Charles Clarke, Ken Clarke)
• rump Lib Dems (civil liberties, localism, pro-EU. The Nick Clegg personality cult essentially. If it goes more libertarian, we could see David Davis in this camp as well). 
• left (tax and spend, social democrat. Jon Cruddas, Ed Miliband, maybe Vince Cable. Would be most effective if combined with the Greens for a red/green agenda)

This would be a much more honest cut of the British political cake than the current two-and-a-half party mish-mash. 

Of course, without PR (and it's possible Clegg wouldn't have the political acumen to make that bargain) a Tory-Lib Dem coalition could be disastrous; a moderate cover for savage right wing tax cut and spending cut policies. But there is at least a possibility that this scenario could produce a good outcome. 

In the wipeout scenario, by contrast, Labour goes below 200 seats. This would be very tough in the short run, with a lot of bloodletting and recriminations. The silver lining to the cloud is that the Blairites - and the duff elements of the Brownites - would most probably lose control of the party to a reconstituted left wing. The blinding reality of the total failure of Blair/Brown as an economic strategy would probably see to that. Dave Cameron would be left to carry on the legacy of Tony Blair, which will largely manifest itself in huge rises in economic inequality, the decimation of public services as a prelude to privatisation, and other right-wing nastiness. Given that there is a real likelihood that the Tories will make a complete hash of things (in the Ted Heath style), this outcome really isn't as bad as it looks. Labour could sweep back in after just one term out of office as long as they get their shit together. I will come back to likely leadership candidates in the final post (for now) on this topic, later this week.  

The most dangerous scenario is the moderate defeat - because it won't be enough of an electoral beating to dislodge the cretins who are running the party at the moment. Of course Brown will go, but there's a much greater chance that a Brownite (or Blairite) candidate would prevail in the leadership contest to follow. This is also a risk in the hung parliament scenario, but due to the possibility of electoral reform and the fluidity and instability of the situation, that looks preferable to me. 

For this reason I am actually rather encouraged by the latest batch of polls showing Labour at 23%. If they can get below 20, I am fairly confident of the wipeout to end all wipeouts. Then we can Take Out The Trash and start again. It will not be easy, but then neither is the prospect of another generation of Blairite/Brownite zombies running things. 

I will come back to the leadership contenders later this week. 

National Mild Day

As organised by the Campaign for Real Ale. 

"What's mild?" I hear you ask. It's probably the UK's greatest style of beer. Sweeter than bitter, less heavy than stout or porter. 

If you can find a pub that does it (in the south and east of England, free houses are your best bet; in the midlands or north west you'll have more luck with regional brewers as it's more popular there)... ENJOY. 

I've been an obsessive for mild ever since 1993, when I was having a pint with my dad in Oxford and a punter came into the bar and asked for mild and the barman said "I'm sorry, we don't serve it". Dad muttered "what sort of pub doesn't serve mild? This isn't a pub, it's a shithouse".

Nice one, dad. 

Perhaps surprisingly, the Telegraph has done the public a great service

I'm finding the reports from the Telegraph on MP's expenses very interesting. They got hold of the details of all recent expenses claims via a leak. This page gives details of the . Some of the claims do look pretty extraordinary. £22,500 to treat dry rot at a seaside second home? A £320,000 profit in 27 months on a house bought with taxpayers' money?

I must single out for a special mention Labour MP Barry Gardiner, because (based on the testimony of people I know who have worked with him) he is such a complete dork. Gardener made a profit of £200,000 on a Westminster flat renovated using payments which he then claimed as expenses - despite the fact his main home is only 8 miles from parliament. 

It seems to me that we are in for a wave of anti-sleaze sentiment which will make the previous high-point of anti-sleaze, at the 1997 election, look positively tame. That election delivered Martin Bell to Westminster on an anti-corruption ticket. It is possible that next year's election could see dozens of anti-sleaze MPs elected. Next year could be the year when millions of citizens rise up and say they've had enough of MPs on the take.

For the most part, the MPs' attempts to defend themselves miss the point completely. "It was all within the rules", they say. Undoubtedly. But who made those rules? Parliament. The point is that the rules are so lax as to allow ludicrous expense claims that no-one in a job elsewhere (outside senior executives in the banking sector, perhaps) would be entitled to.  Gordon Brown says that the system requires reform - which it does - but why hasn't anything been done in the last 11 years then? Aren't he and previous Prime Ministers guilty of negligence for allowing these crazy expense rules to exist for so long? 

Certainly, MPs living too far away for a reasonable commute need accommodation in London. But why should they be able to make hundreds of thousands of pounds on accommodation which the taxpayer is paying for? If the taxpayer pays, the taxpayer should get the returns. Better still, MPs' offices could include proper overnight accommodation facilities - bedrooms, bathrooms, kitchens etc. The Houses of Parliament should really be like a big hotel. 

I think the Telegraph has done us a great service by publishing all this stuff. I hope they make the complete list of expenses claims available for download and perusal at some point in the near future as it would be good to have a database where everyone could see exactly what their MP has been claiming. Let's have all this out in the open. 

Chelsea deserve dodgy refereeing

I was LMFAO when I read about the Chelsea-Barcelona result. 

All these lame fools who are trying to kill or maim the 'dodgy referee' should remember that Chelsea is only where it is because of the financial input of Roman Abramovich - one of the dodgiest businessmen in the world. An oligarch who made his money via the World-Bank sanctioned robbing of the Russian people after the fall of the Soviet Union, as the sell-off of state-owned industries concentrated huge amounts of wealth and power in the hands of the few. 

Given the immense bias of UK Premiership and European football towards clubs with the financial clout to buy all the best players and management expertise (and the lobbying clout to persuade UEFA to structure the "Champion's League" so that they get in every year, even if they haven't won anything), I would say it is the duty of referees to interpret the rules in a biased manner. The bias should, if possible, be approximately equal to the differential in money and power between the teams. So that means if I put together a Sunday league side to play Manchester United, I should be allowed 200 players on the pitch, my goal should only be 1 foot wide and my team should get penalties roughly every 90 minutes as a matter of course. 

Football would suddenly become interesting again. There is a similar system in golf. It's called "handicapping" (a rather offensive term, but then golf clubs never were known for being very PC) and it works rather well. 

I'll probably apply for a management job in FIFA armed with this theory. You never know. 

Who wants it? Leadership contenders and hopeless cases come out of the woodwork

Now that the media has decided swine flu is a big hype (gives them a chance to make big headlines when it comes back and bites us on the ass later in the year, but not the most helpful way of covering the story), we must be thin on news, 'cos there have been a persistent stream of contenders for the Labour leadership coming out of the shadows. 

First it was Salacious Crumb, aka Hazel Blears. Then "Harriet Hitman". And they also threw Johnno into the ring. (Great hand movements, Alan). 

I have to say this does look like yet another big hype from the media, with no real substance whatsoever. Yes, the government is down in the polls; yes, there's been one crisis after another. But so what? We've been here before. Nine to twelve months before, to be precise. Now it is just possible that if Brown hadn't had that spike in the polls after the initial banking bailouts in October, someone - maybe David Miliband - might have made a move for the leadership. At that stage, with 18 months to go to an election, there was a reasonable chance of making a stab at a policy platform for a new leadership and going to the country without the new PM looking like a complete gamble. 

But that was last year. Even if a leadership election was triggered now (an unweildy process involving trawling round getting signatures from dozens of MPs and then a full ballot of MPs, party members and trade unionists) the winning candidate would have less than twelve months before June 2010, which I think is the last date an election can be held. The whole thing would look extremely rushed and it's unlikely that an alternative candidate could perform better than Brown under those circumstances.

So it looks like a very poisoned chalice to take up, even assuming a leadership challenge could be successful (far from a foregone conclusion). But let's pick the ball up and run with it for the sake of intrigue. Who would be the best candidate for Labour leader? 

We can dismiss Hazel Blears and Harriet Harman straight away. The fact that Hazel Blears was right to criticise the Government's decision on the Gurkhas should not lead anyone - least of all The Guardian, in a strangely wrong-headed editorial - to conclude that she has any clue about policy in general. She couldn't even come higher than fifth in the deputy leadership contest, let alone carry the country in a general election. A total bullshitter, absolutely useless. 

Harman at least managed to win the deputy leadership, but only by being a complete opportunist - appearing to be anti-Iraq war until precisely two minutes after the campaign finished, where it suddenly emerged she had apparently been pro-war all along. Less useless than Blears, but not by much. 

Johnson would be a good choice: he avoids the worst aspects of both Brown and Blair, and is more likeable than either Cameron or Clegg. He's probably the guy that Cameron is most scared of. I still don't think he really wants the job, though. There are circumstances in which you can become Prime Minister without really wanting it (Jim Callaghan in 1976 comes to mind) but that normally only happens if the incumbent resigns. And can anybody really see Gordon Brown resigning before the election? Surely there's no way.

What's most interesting in a way is who isn't being mentioned at the moment. No-one from the younger generation: in particular, David Miliband has been absent from the discussion, which is in stark contrast to summer '08, where he was being viewed as the main contender. Why is that? This is already quite a long post and I want to move on to talking about the most likely - and/or desirable - scenarios are at the next election and afterwards - so I'll continue this v soon.  

Swine flu - it may not be that bad, but idiot journos could make it a lot worse

The media is of course full of swine flu this week. Unlike the virus - so far - the coverage is inescapable. By today, we were facing a pandemic of predictions, an epidemic of articles. 

Most of the TV coverage I've seen has been pretty good - Channel 4 News had Liam Donaldson, the Chief Medical Officer, answering questions that had been emailed in by viewers, and it was quite in-depth and all very balanced and non-sensational. The printed and online media, by contrast, has been much more patchy. Most of the broadsheet reports have been OK but some of the columnists and bloggers have lost the plot completely. 

Simon Jenkins in the Guardian delivered an absolute pile of doo-doo today, arguing that panic over the virus is being 'stoked' by governments and the World Heath Organisation to justify increased budgets for disease management. There is a very strong argument for this view with regard to counter-terrorism budgets in the US and UK, but as regards a potential flu pandemic it's a completely ignorant distortion of the truth. Jenkins describes your average flu symptoms - "you feel ill for a few days then you get better." In which case why have 150 people died in Mexico City?

 So far, it is correct that the cases of the illness outside Mexico aren't fatal in the overwhelming majority of cases. But the early indications suggest that this new H1N1 strain of flu is substantially different from the normal seasonal flus which circulate every year. We simply have no idea how bad the impact might be outside Mexico. We might be seeing just the very small tip of a very large iceberg. When only a few people in the UK have been infected, there might well be no deaths at all. But if millions of people are infected, we may see a much higher death rate. As yet there is just no way of knowing. 

Jenkins says "professional expertise is now overwhelmed by professional log-rolling" but in fact the professional response as I have seen it in the media has been very measured and non-alarmist. It is certain sections of the media that are behaving unprofessionally by talking what they know is presumptious bollocks - suggesting that we know there is no risk whatsoever, or a very very minor risk  - whereas in fact we know nothing of the kind. It is sad that Jenkins, who is capable of much better journalism than this, should have dropped his standards so low on this occasion. 

I can't say the same thing about Telegraph blogger James Delingpole, because I have yet to read a single post he's made that isn't absolute crap. This guy wants to be Simon Heffer with a sense of humour. Sadly, he is a cheap punk impersonating an offensive moron. Or maybe he's just an offensive moron. Apparently no-one (except the very weak and infirm and people living in developing countries, for whom it was presumably a matter of social Darwinism anyway) is gonna die of swine flu. It's Simon Jenkins without the brains. One to avoid, methinks. 

And as for Michael O'Leary... this is a guy who shows such utter contempt for the human race that he is probably just a walking bag of nasty viruses disguised as a human being. Please, can someone infect this bastard, and put the rest of us out of our misery?

UPDATE: the day after writing this post I was lucky enough to find that rare thing - a balanced, sensible media article on swine flu by the excellent Ben Goldacre, author of the Bad Science blog. His view? We simply don't know enough to be able to make predictions on the severity of the outbreak or the potential body count yet - and anybody who says otherwise is a fool or a liar. Read this guy rather than the bunch of other duffers I've collected in this post and we might get somewhere...

Gurkhas - how many times can the govt shoot itself in the foot?

An embarrassing defeat for the government today over its plans to restrict the right of the majority of former Gurkhas to settle in the UK. The Lib Dems and Tories joined forces with rebel Labour MPs to back a Lib Dem amendment.

How did anyone in the government think that it was a good idea to try and pull a hard line on this? I have yet to find one person, of any political persuasion, who thinks that stopping the Gurkhas coming here is in any way fair. It seems pretty obvious to me that if you have served in the British armed forces then you should have the right to permanent residency in the UK. The government says it would cost £1.4 billion - fine, let's just put up taxes to raise the money. Could anybody seriously object? 

And well done to all Labour MPs who voted against the government on this - a full list here.

This makes an already unpopular government look ridiculous. And it's a huge PR coup for Dave Cameron and Nick Clegg. 

Government ministers need to try doing something popular for a change.

A funny sort of 'class war'

The favourite expression of right-wing commentators to describe the Budget this year was 'class war' - apparently because Alistair Darling introduced a 50% tax rate on incomes over £150,000. I know that people like Simon Heffer and the even more ludicrous Jeff Randall have a vested interest in knocking the Labour government (although to be fair to Heffer, he hates Cameron as well - I don't know if anyone in the current crop of Tory MPs is right-wing enough for him to actually support them. Maybe Frank Field on the Labour side might be... Enoch Powell is sadly deceased, although my wife's great-aunt believed he was still alive, but that was before she was dead too), but if we're drawing the dividing line between 'the great unwashed' and 'Middle England' at £150,000 then we ain't got many people in middle England.

Data from HMRC (the Survey of Personal Incomes statistics) shows that only about 1% of income tax payers earn more than £150,000 per year. And only about 70% of adults in the UK are income tax payers. So the class war is 99.3% of the adult population of Britain in the working class vs 0.7% in the middle class. With such a small middle class it's no wonder the economy is going down the tubes. 

Even the number of higher rate (40%) taxpayers is pretty small as a proportion of the population (although a lot bigger than it used to be, as average earnings have grown faster than the higher rate threshold.) I think it's about 15 to 20% of taxpayers in that bracket. So even a rise in the higher rate to 50% would be a pretty unbalanced 'class war'. 

Of course it's in the Daily Telegraph's interest to paint a picture of oppressed hordes of City workers - but there are actually a small handful of high earners at best. During the boom years their salaries grew far faster than anyone else and they cultivated a reputation as the saviours of the UK economy. In the wake of the credit crunch this reputation has largely collapsed - although in many cases their earnings remain high. In some cases we have found in retrospect that not only were they not worth these inflated salaries, their worth to the economy was actually severely negative (step forward, Fred Goodwin).

The government's strategy is - or should be - based on targeting a small number of people who have done very well - far too well - out of the complete imbalance of the global economy in the last three decades. The 50p top rate is only the start of that strategy; Capital Gains Tax needs to be reformed and a lot more needs to be done to reduce tax avoidance. But it's absolutely f*** all to do with class war, whatever Simon Heffer or Jeff Randall might tell you. 

Cutting too much

One thing that has only really emerged from the budget a day or two later, after people had a chance to look at the small print, is the sheer scale of the public spending cuts being planned. In a prime example of the cynical manipulation that makes the budget statement such a farce, Alistair Darling said that public spending would grow by 0.7% a year in real terms from 2010 to 2013. In fact, that figure was misleading, as it didn't include investment spending, which is being cut massively. Overall, public spending is actually going to shrink in real terms over those three years. In fact, most of the heavy lifting in the 10-year plan to balance the budget by 2019 is being done by spending cuts, not tax increases. 

This is, to put it mildly, absurd. Those of us who remember the 1997-2001 Labour government will remember the two years when spending growth was constrained to the Tory plans, which were for low growth. Coming on the back of years of underinvestment, this 2-year squeeze caused huge problems in health and education which the government then spent the next 10 years trying to sort out - with only partial success. Well, the cuts planned in 2010-13 are much worse than those 1997 Tory plans. It's going to be a complete disaster. If people think the health and education systems of the UK have serious deficiencies now, wait until they've been completely starved of cash for several years. 

The correct response of a Labour government to recession was summarised by Tony Benn in a diary entry for December 1974. I don't have the exact quote to hand, but it was something like, "we are going to have to reduce our living standards over the next 12 months. But if we just do that by everyone taking two steps down the ladder, then the guy at the bottom is going to fall off". With cuts in public spending of this magnitude, there are going to be a lot of very poor, very vulnerable people falling off that metaphorical ladder.

The 50% top rate was a nice starting point for a progressive response to the recession, but if the government had had real guts it would have pledged to maintain spending as a share of GDP once the recovery starts, putting up taxes as necessary. The huge hole in the public finances needs to be filled by tax rises rather than spending cuts. It's a real shame that the government is running too scared to protect its legacy of increased spending on public services compared with the Tory years. As Tom Clark in the Guardian shows, if the spending cuts are implemented they'll leave public spending as a share of GDP back at roughly 1997 levels. And then, one might ask, what was the point of New Labour? A ten year diversion in between business as usual? It's a disgrace. 

Sad day for Ipswich Town

I don't think I've done a sports-related post on this blog for many a moon but I couldn't resist grabbing the sick bag when I heard that Roy Keane is the new Ipswich boss. 

I haven't supported Ipswich since they sacked George Burley about seven years ago. I switched to Colchester United instead... closer to me, easier to get a ticket, and (at the old Layer Road ground) within walking distance of a very good pub, the Odd One Out.) (It isn't any longer... the new stadium is out of town.)

Roy Keane always has struck me as a dickhead... irrational, had a habit of deliberately crippling other players as a player, used to play for Man Utd. What's to like? 

The asinine headlines have started already: "Keane sets promotion goal". That's funny, I thought he was trying to get relegated. Like at Sunderland? 

So, balls to Ipswich. (I do quite like Chelmsford City and Braintree Town as well... I've seen good matches at both those grounds.) 

Well, I got a bit of what I wanted, but only a bit

Today's Budget is, in one very particular way, the best New Labour has ever produced. The new 50% supertax on incomes over £150,000 is a welcome (if partial) reversal of the downward trend in top rates of the Thatcher years. The Institute of Directors are up in arms about it, which pretty much guarantees that it's the right thing to do. (Simon Heffer also doesn't like it - which doubly means it's the right thing to do. "Idiocy, bigotry, tribalism and sheer class hatred" - yep, I'll have some of that please.)

The supertax isn't perfect - the ever-astute Vince Cable (best Labour Chancellor we never had - yet?) has pointed out that it won't affect people who are able to pay themselves in capital gains rather than income (e.g. private equity bosses) as the rate on capital gains remains at 18%, and the government should definitely think about a 50% top rate of CGT to match. There are a lot of other tax avoidance issues to sort out as well, as Richard Murphy of Tax Justice Network points out. But the 50% top rate is at least the first step towards a sensible tax policy. And it's very unlikely it would ever have happened under Tony Blair.

Other than that, the good news is a bit thin on the ground. The government has largely rejected a further fiscal stimulus, mistakenly in my view. There is a tiny bit of extra money for the Child Tax Credit - £20 per child per year - but this is nowhere near enough to enable the government to meet its child poverty target for 2011. A bit of extra investment for green technologies, but again, very small beer - about £500 million according to Richard Murphy. Nowhere near the amount that the Green New Deal group has identified as necessary.

Of course the main reason the extra spending was so thin on the ground was because advocates of a further fisacl stimulus couldn't convince the Treasury in the face of the rapid - and continuing - deterioration of the public finances combined with the cost of bailing out the banks. Borrowing could be up to £200 billion this year - a post-war record. Bigger than 1976 when Labour went to the IMF, who were a similar wrecking crew then to what they are now. 

Given the speed and ferocity with which the public finances have unravelled, it's understandable that the Budget projects only 0.7% per year real growth in public spending over the period from 2010-11 onwards. Understandable... but wrong. 

For one thing, it's not a credible spending path. The economic growth projections that the govt published yesterday were less of a trip to fantasy island than the infamous PBR 2008 projections but they are still wildly optimistic about the pace of recovery. The truth is this: after 30 years of misplaced trust in market forces and bubble finance, the UK economy - perhaps more dependent on financial services than any other economy - has had the guts ripped out of it. Recovery, when it comes, will most likely be slow and halting. That's if it comes at all, and we don't slip into Japan-style depression. So, the 3.5% growth prediction in 2011 is cloud cuckoo land stuff.

It seems that the private sector is most unlikely to precipitate a strong recovery on its own - particularly after the Government's green industries package proved to be something of a damp squib. Instead, we need, if anything, to expand public sector investment during the recovery - focusing on building the transport, technological and skills infrastructure that will enable us to work our way out of recession. 

Taxes will need to rise by a quite substantial amount once the recovery starts, to pay for this. For sure, there is some public spending we can cut; any use of management consultants by the NHS or local councils, by example, should be banned. They're overpaid and ineffectual. The ID cards scheme and NHS IT scheme, also both completely ineffective, could be canned. We don't need to replace Trident. 

But this is small beer in the wider scheme of things. Let's not kid ourselves that it's easy to cut public spending without any adverse effects on services - there is no evidence whatsoever for that view. All the evidence in fact is that cutting 'back office' functions - the easiest target - impedes delivery effectiveness. HMRC is a good case in point; reduced to a point in which staff have to routinely cut callers off to meet government targets. 

The next few years is when we finally realise that we can't have continental European levels of public services unless we pay European levels of tax to go with them. Not an easy lesson to learn, but a necessary one. 

incompetent AND economically illiterate - a deadly combination

Apparently the IMF made a mistake when it claimed the UK faced a £200bn bill for bailing out the banks in its 'Global Stability Report' (a phrase to rival Orwell's 'Ministry of Truth', surely. The true figure is closer to £60bn - still a huge number but a long way short of £200bn. 

We've already seen that the IMF are good at wrecking economies - now it emerges that they have no quality control, either. 

Laugh? I nearly bankrupted a small country.

What I'd like to see in the Budget

There's a long list of useful things that could be in the Budget this year. Unusually, the desperate circumstances the economy finds itself in means that some of them might actually get implemented. The main thing I want to make a case for is a big additional fiscal stimulus - a lot bigger than anything we've seen so far - otherwise the economy is going to flush down the toilet even quicker. Many, including Bank of England Governor Mervyn King, have said we can't afford it. Bollocks - we can't afford not to. It's true that UK government borrowing is ballooning to huge levels, and there is a possibility - down the line - that the cost of financing the debt may become so prohibitive that the UK government becomes insolvent. But an effective stimulus should actually reduce this likelihood because the worse the recession, the more likely it is that tax revenues will reduce further and land us deeper in the public finance hole. The alternative is to go the way of Ireland - slashing public spending and benefits, sticking with the same strategy that created the Great Depression in the 1930s while penalising the poorest and most vulnerable people in society.

The Child Poverty Action Group has calculated that a £7.5 billion package of increases in Child Benefit, Child Tax Credit and Jobseekers Allowance would enable the government to meet its 2011 target to reduce child poverty to half of its 1999 level - as well as creating around 200,000 extra jobs when multiplier effects are taken into consideration. That's a more than worthwhile investment.

There are other useful things that could be in the Budget - a supertax on high earners, new suport for green technologies, wealth taxes (especially on parasites like Fred Goodwin), a complete ban on the employment of management consultants in public services... but the fiscal stimulus is what we need above all else. Ex-MPC member Sushil Wadhwani has been making the case for further stimulus very effectively. Let's hope someone in the Treasury is listening.

Calling Boris on his B.S.

One of my favourite pastimes when on a bit of a posting roll is to take issue with Telegraph columnists. Normally I pick the easiest target - the risible Simon Heffer - but today it's time to put Boris Johnson in the firing line.

Poor old Boris. He won the mayoral election last year on a wave of anti-Labour sentiment - since when he's achieved pretty much nothing of value whilst, in the media, his old nemesis Ken Livingstone stays one step ahead of him at every turn.

To compensate for the manifest failure of his day job, Boris ups the ante with his side-job as a Telegraph columnist. Some days this can be mildly amusing: today it resulted in the biggest slice of bullshit on education policy I've seen in years. It makes even the likes of Andrew Adonis (now thankfully moved to the transport brief where he can probably do less damage) look relatively sane.

Boris has noticed the minor bust-up in the Labour party over the possible selection of Georgia Gould, daughter of New Labour architect Philip Gould, for the (normally) safe Labour seat of Erith and Thamesmead, and used it as a stick to beat Labour supporters with over the party's education reforms. Or in fact, every education reform of the last 50 years (all of which were either introduced or supported by the Conservatives, but never mind). Apparently Labour education policy is responsible for nepotism in the selection procedure for Labour election candidates. A bit confused by the logic of the argument? So am I.

Johnson cites evidence that children who were born to middle-class parents in 1970 had a much bigger advantage over children of working class parents than equivalent children born in 1958. And yes, research using studies of children born in 1958 and 1970 shows that does seem to have been the case. But when were those kids born in 1970 growing up and entering the labour market? The 1980s and 1990s. A period in which the Thatcher and Major governments presided over the biggest increase in inequality in this country's history.

So, largely speaking, it's the Tories' fault, not Labour's fault. Now we'd all love to know what's been happening to inequalities and class advantages since New Labour took office in 1997 - and if Boris had had some evidence on that, then he might have had some kind of coherent article, rather than stitched-up rantings. But sadly there are no cohort studies of kids born in the UK in the 1980s or 1990s. Why? Because the Tories decided the study of kids born in 1982 (i.e. 12 years after the 1970 study) was too expensive, and scrapped it. Indeed there wasn't another study of this type until the 'Millennium Cohort study' of kids born in 2000... under New Labour.

Johnson then adds insult to injury by calling for a return to academic selection - but completely fails to explain how this would benefit working class kids. I went to a grammar school and it was completely dominated by middle-class kids - many of whom had been to private sector primary schools where they were very heavily coached for the 11-plus. Selection is an act of desperation - condemning the vast majority of kids to a second (or third) class education so that you can focus on a small elite in the grammar schools. What we need in education is the opposite of selection - a completely inclusive system, with no-one able to buy a better quality education place than anyone else, and no opt-outs. The private sector itself is a selective system (by income) - so,
let's abolish the damn thing. ONE high-quality system for all is the way foward.

Boris Johnson is a fucking idiot on education policy. And he's a clown of a mayor.

Green shoots look like so much hot air to me

Now that we're not seeing a banking collapse every couple of weeks as was happening last autumn, thoughts have began to turn to recovery. Business Minister Shriti Vadera was first to see the "green shoots" in January.

And now almost everyone seems to be in on the act: Barack Obama, his economic adviser Larry Summers, Gordon Brown and a whole welter of smaller-scale politicians and advisers.

But what the hell is this new-found confidence based on?

Some dodgy banking results, a share mini-rally which may have stopped in its tracks already and one month's figures on house prices.

The best we can probably say is that the economy is not contracting as fast as it was last year. And that's the best case scenario.

The worst case scenario? I'll leave that to Willem Buiter in the FT.

Meanwhile, we are coolly informed by the Treasury that the banking bailout may have cost the UK taxpayer £60 billion pounds.

If that's "green shoots" I'm the recently deceased JG Ballard.

Tip of the iceberg?

The G20 police brutality story is really growing in coverage now... the Guardian is normally my first stop on civil liberties issues (notably Henry Porter's column), but the Telegraph also has good coverage. It now emerges from the Independent Police Complaints Commission (same acronym as the Intergovernmental Panel on Climate Change, oddly enough) that more than 185 complaints have been received relating to G20, of which 90 were from alleged victims of - or witnesses to - excessive police force.

Contrary to the initial (very spun) reports from G20, which suggested a moderate police approach, it is now becoming clear that many police officers saw the protest as an excuse to go out and give the protestors a damn good thrashing without fear of recrimination - or so they thought.

Fortunately, videobloggers and the more sympathetic elements of the TV camera crews caught them at it. We live in a surveillance society - but fortunately it's now a two-way surveillance society, at least at a public event like the G20 demo.

This is turning out to be an extraordinary 12 months of mythbusting in British politics. It's already seen the overturning of one myth (that unrestricted capitalism was the saviour of the UK economy - we now see that if anything, it's the gravedigger) - and we may now be seeing a second myth laid to rest - namely, that the police are servants of the public, rather than a force for the oppression of the public.

The nice thing is that the anti-capitalist, anti-authority voices which used to be pushed to the margins of UK politics are now in the mainstream. Which can only be a good thing in terms of overturning a lot of the b.s. that's been laid down over the last 30 years.

Which brings me to my only beef with Henry Porter's otherwise excellent Observer article on the G20 police intimidation. Henry says "this is the end-product of the disastrous legislative assault on Britain's rights and liberties inaugurated by Tony Blair." But it goes back way before that. Anyone who remembers the miners' strike, Greenham Common or Wapping will remember the way the police were used as a political tool in the eighties by the Thatcher government, who thought any protesters were a Communist front preceding a Soviet invasion force. Indeed, it was happening even before Thatcher - in 1974 the police brutally assaulted hippies at the Windsor Festival.

The basic problem with institutions like the police and the army - and this is an obvious point but it bears repetition - is that they are one of the few walks of life where you get to apply violence to other people as part of your job. This inevitably means there is a danger that the job will attract people who are deeply into the idea of causing harm to others for fun. Particularly if the victims are people who have traditionally tended to attract least sympathy from wider society - poor people, drug users, ethnic minorities, travellers, and political protestors. Certainly, the police assures us that they do all they can to stop these people being admitted to the police, and hopefully they succeed most of the time. But even if a few misanthropes get through, you've basically got "Magnum Force" for real. At the end of the day the police officers who are carrying out these despicable attacks - and the higher-ranking officers who are directing them to behave in this way - are like playground bullies - but with considerably more ammunition than your average bully. And no-one will be able to have any confidence in the police force until we have got rid of the nutters - not least the high proportion of decent and caring police officers who are undermined by this criminal activity.

Tomlinson: it's videobloggers vs "Magnum Force" on the streets of 2009

Despite the attempted cover-up, it's looking more and more like the police 'officer' who killed Ian Tomlinson may be brought to justice.

This particular fascist bootboy has miscalculated badly... both individual video bloggers and the news TV camera crews got him "bang to rights" literally. Showing him whacking Tomlinson from behind, well before the poor guy collapsed and died.

The initial coroner's report on the death was garbage... just plain garbage. As another Tomlinson (Ricky - good left winger) might have said: "heart attack - my arse". It took a second postmortem to get the proper cause of death - internal bleeding.

Well done to both the TV camera guys and the individual videophone jocks for getting the vital footage. In future, the more cameras there are recording these kinds of incidents, the better. (Provided of course that the cameras are in the hands of the public and not the authorities.

As for the police... it's quite clear that there is an element within the Met (to be precise, within the territorial support group, or TSG) which is trying to run a "Magnum Force" style vigilante force. These people are wearing police uniforms (though without identifying insignia so you can't tell who they are, and often with balaclavas on as well) but they are really operating like some kind of fascist junta. I'm not going to launch into some tirade here about how all police are fascists, as I simply don't believe that. But, there is an element who are, certainly. Hopefully the 'officer' who appears to have killed Mr Tomlinson will face prosecution for manslaughter. In terms of the wider future of the police force - and of democracy in the UK - the key questions are:

• who (if anybody) authorised police officers to appear in public without identifying insignia, and to take this kind of action? 
• the police top brass always denies that this sort of thing goes on. Are they just lying to us, or is there a rogue element within the police operating as a law unto itself? 
• were Labour politicians involved in authorising these kinds of police tactics?

Getting the answer to these questions should be an absolute priority for the weeks ahead for all of us. Fail to get the answers and we move one step - at least - closer to a police state. 

McBridegate

Hi folks
Just to say the Damian McBride affair has not gone unnoticed round these parts... but is competing with a ridiculous workload and irregular hours (brought on by Easter) at present. I can see now why people find Twitter so convenient: any fool can squeeze 140 characters into a spare 5 minutes. Should be called 'Witter'. Anyway, more on this at the weekend... promise.

Some excellent critiques of the Geithner plan...

...from economists Joe Stiglitz, Peyton Young and Jeffrey Sachs.

By the 'Geithner plan' I mean the latest iteration of the plan to deal with 'toxic' banking assets in the US, drawn up by US Treasury Secretary Timothy Geithner. The Obama administration is suffering from a surfeit of lame economists in the upper ranks - Geithner and Larry Summers, to name but two. A bit of analysis shows that the plan is fatally flawed, but it seems to be going ahead anyway.

The two basic flaws can be summed up as follows (there's more detail in the articles by Young, Sachs and Stiglitz - they're all well written):

1. Incentives for the market to inflate the price of assets by competitive bidding wars, with the US taxpayer footing the bill

The US Treasury is promising to pick up most of the tab if the assets turn out to be worthless, which means that there is an incentive to buy them even if there's only a small chance they turn out to be worth anything. (In economist-speak the 'expected value' of the assets is inflated). This inflation in the expected value leads to an inflation in the actual value which the asset is being bought and sold at. This is due to a logical flaw in what the Treasury is trying to do. Geither believes that his plan will allow the 'real' value of toxic assets to emerge via market pricing, once the US Treasury provides the necessary confidence to underwrite investors' losses. But the Treasury intervention will itself the real value of assets. The plan is incoherent.

2. Incentives for insiders to manipulate the price of the assets without even bothering with a competitive process of buying and selling.

Sachs' article goes one stage further by pointing out that a big financial entity - like an investment bank - could sell a toxic asset back to itself (via an intermediary or subsidiary, for example) and collect a big sum from the US taxpayer by doing so. If the asset is worthless, the 'buying' part of the investment bank makes a large loss - but as it's sold the asset to itself (via the 'selling' part of the investment bank) there's no net loss on the transaction. And because the 'buyer' gets a large wodge of US Treasury compensation, there's a guaranteed profit. It's literally a licence to print money.

Of course, it may be that the US financial regulatory authorities can somehow police the insider option which Sachs points out - although it's sure as hell gonna be fiddly to do that given how adept financial companies are at setting up artificial entities (e.g. to minimise tax bills). But even if they can, there is still ample scope for price inflation through competitive bidding.

The Geither plan is a time-bomb ticking under the Obama adminstration's reputation for economic credibility. Partly of course that's because it's a slight modification of the Paulson plan from the Bush administration, which was complete pants, but somehow can't get off the table. Obama needs to sort this out quickly - what about sacking his entire tranche of senior economic advisers and getting people in who know what they're doing? Otherwise the consequences for his presidency and for the US economy could be disastrous.

Hal on Twitter

For no very good reason, I have now set up on Twitter.

As for the poor sods who already receive text messages from me, expect the brain-bendingly moronic and irrelevant. DO NOT expect major league insights (but then you never did, did you?)

This is strictly for fun.

Catching up after the G20 - how the IMF kills vulnerable economies (at least so far...)

Right then... after a week off on holiday in sunny Wales (and it was sunny, surprisingly), I find I've missed all the excitement of the G20 conference. As usual the media seemed preoccupied with wardrobe's (Michelle Obama's in this case) and failing to report any incidences of police heavy-handedness - like this one (thanks, Kevvy K, for the link).

So, we know the negative side - vacuous reporting and an entrenchment of the police state. But did anything good come of the talking? It's hard to get too enthusiastic. There has been extra bail-out money pledged to the IMF for economies that are on the verge of collapse - but bear in mind that when the IMF lends to countries it tends to impose conditions that collapse their economies still further (e.g. huge wage cuts, which depress demand) as it is an ideological slave to a Thatcherite/Reaganite economic agenda which has now been totally discredited. Having said that, it is possible that the IMF could change its policy stance somewhere down the line, although it's hard to see exactly how that would happen. The increase in Special Drawing Rights (essentially a low cost lender-of-last resort facility where the IMF plays the role of central banker) is useful to an extent, as it will hopefully come with less strings attached than a normal IMF bailout.

For a clear idea of what the IMF is doing to economies it's bailed out in Eastern Europe, it's worth looking at Paul Mason's wittingly titled "Euro-Crash" series on the Newsnight website. Latvia and Ukraine are absolutely buggered, Slovakia is doing somewhat better. What the f*** was the IMF thinking in Latvia? Who the hell thinks that wage cuts of 35% are the way to fight recession? You'd have to be an economic ignoramus to think that. It's almost as if a crisis was being deliberately engineered - perhaps the IMF is a Trotskyist front (ha ha). Meanwhile, in Ukraine, huge swathes of the banking system are bust and people can't get their money out. The government can't meet the conditions attached to the $16.5bn IMF loan which would at least sure the situation up. The conditions were ludicrous: cutting public expenditure and wages, which would deepen the slump even further (if that were possible). So, rather than changing the IMF's goddamn conditions so that the government can survive, the IMF is withholding the loan - which means that government collapse and revolution in Ukraine is looking a real possibility.

Paul Mason's reports are brilliant - but the only missing link is an interview with some of these IMF wankers, touring them round the streets of Ukraine to show the impact that their economic illiteracy is having on the country. Bearing in mind that many of the people who support the IMF's economic views are precisely the same people who were encouraging the reckless deregulation and expansion of credit - which is the main thing that got Ukraine and Latvia in trouble in the first place. We really do need to ensure that the IMF becomes a support system for the global economy rather than a wrecking crew. And that is what the G20 singularly failed to discuss - even if a bit of progress was made on important issues (such as tax havens).

(In the interests of balance I should point out that the latest column from Ambrose Evans-Pritchard, probably the best economics correspondent on the Telegraph, has a much more upbeat assessment of the IMF than me. He says:

Euphoria swept emerging markets yesterday as the first reports of the IMF boost circulated. Investors now know that countries like Mexico can arrange a credit facility able to cope with major shocks – and do so on supportive terms, rather than the hair-shirt deflation policies of the old IMF. Fear is receding again

Which puts a very different spin on things - but I will need to dig more into what is going on in Mexico before commenting further on whether this new "supportive" IMF is for real or whether it's just the old neo-liberal IMF with a new haircut. More on that later in the week.)

Monarchy reform: where's the bigger picture?

Just attempting a blog post while on holiday in a surprisingly sunny Wales, using the Google G1 phone. This is a bit awkward to use for long posts as while it offers a full QWERTY keyboard it's tiny, so no writing "War and Peace on this device. You'll probably have to put up with typos etc for a few days. And posting a link is fiddly, so I wwon't bother much.

Anyway, just to say that Gordon's conversations with ol' Thin Lizzie from House of Windsor about changing the rules of succession and abolishing the rule that says the monarch can't marry a Catholic are fine as far as they go but do miss the point a bit. For sure, the current rules are discriminatory. But the whole concept of monarchy is pure discriminaation based on birthright. The French and the Americans sussed this 200 years ago. So why. Are we still scuttling around in the dark ages? Abolish the whole caboodle and let's have president Jade Goody or whoever the living equivalent is. Preferably chosen by a tv phone-in. I like it. Time for fine home-cooked mexican food and farm perry @7% abv...

Dean Stockwell's finest hour

Watched the finale of Battlestar a couple of days back on iTunes.

A feature-length special: 2h20m of BSG. Split into 2 parts (a single episode and a double episode) when aired on Sky (in the UK) and the Sci-Fi Channel (in the US), idiotically. Split into 3 parts on iTunes.

In the absence of spoilers, what to say? Well, IMHO, it's great. My favourite part is the last contribution of Dean Stockwell, about 2/3 of the way in. You'll know it when you see it.

Stockwell really needs to have his own series - a bit like Larry David in Curb Your Enthusiasm.

He'll be back, of course, in the prequel movie The Plan, scheduled for later in the year. Prequels are difficult things to get right (hello George Lucas) for obvious reasons: dramatic tension tends to disappear down the plughole when you know what's happening next. (Which makes it strange that people still watch Manchester United, but there you go...) That's not a hard and fast rule though - I do consider Twin Peaks: Fire Walk With Me one of the greatest movies of all time, despite being a prequel.

Right. Now BSG has finished I won't be watching much TV so I really must get back to writing about the economy, which is in something of a death dance these days... I'm on holiday next week but the Google G1 phone is doing it for me in terms of blogging while away, so hopefully expect to see a good post rate. Speak soon.

Nice BSG review with particularly fine spelling mistakes

Still on a Battlestar Galactica tip: nice review of the series from Richard Vine of the Guardian here.

Complete with classic Grauniad spelling mistakes... 'cylon' misspelt as 'cyclon' twice. Isn't that a kind of washing machine? Well, a toaster was used as a plot device in Season 1...

Back to the economy forthwith.

Battlestar: just 2 episodes to go

The presence of Battlestar Galactica Series 4.5 (which would more sensibly be known as "Series 5" given the gap between the first and second halves of Series 4 due to the 2008 writers' strike) on iTunes means that it has been possible for those of us who don't want to pay subscription money to Rupert Murdoch to watch the shows without having to wait months for the DVD release, or resorting to P2P sites.

Given that I'm pretty busy with work, allotment gardening, music and writing stuff like this, it's got to the stage where Battlestar is pretty much the only thing I watch regularly on TV (well, actually as a download on a monitor, but the only thing intended for TV that I watch anymore.) And I will sure miss it when it is gone.

I won't say much about series 4.5 due to not wanting to give away spoilers for those of you who haven't seen it yet. But, overall, this is up to the standard of the rest of the series and I can't wait to see the final two episodes (Daybreak Part 1 airs tonight in the US and on Tuesday in the UK, with the double-length Daybreak Part 2 airing a week later). I'm not giving much away by saying that the mood of these final episodes is pretty grim - this show started dark and has gradually dimmed to pitch black. Star Trek it ain't.

If there's been one slight problem with the final run of episodes (and I'll return to this in more detail once the whole thing is out on DVD and I'm less worried about spoilers), it's that there has often been so much plot to get through that some of the episodes have had to rush certain things and keep certain elements of the story more offscreen than would be ideal. It's a huge contrast to Season 3, where the second half in particular seemed to be stretched out to turn 13 episodes' worth of material into 20. This time round they could have probably supported 13 episodes rather than 10 in this half of the season. I guess budgetary constraints and network programming were the reasons they decided to stick with 10 (although if you include the prequel The Plan which will air in a few months' time and the fact that Daybreak Pt 2 is double length, Season 4.5 is effectively 13 episodes long anyway...)

The slightly rushed feel of this season is a minor problem but it's been a bit compounded by weird editing decisions. One recent episode (I think it was "Deadlock") featured around six or seven shots of Admiral Adama walking round a particular part of the battlestar (I won't say what's being done in the scenes as it gives away too much about the likely conclusion of the show). But it was extremely repetitive and a weird use of scarce screentime when there were more important things that could have been shown instead, but presumably had to be cut for time (or maybe there wasn't the budget to film them?)

Series creator Ron Moore's podcast commentaries (also available from iTunes or from the website at SciFi.com) suggest that several of the episodes from this final batch will be extended when the DVD is released later in the year, and that should help a lot.

The main 'problem' with Battlestar, if one can call it that, is that other recent sci-fi series look extremely mediocre in comparison. I tried watching a couple of episodes of Star Trek: Enterprise on Virgin 1 the other day and they were almost unwatchable - it looked so clunky and plastic next to BSG, despite being only a few years older. Partly that may be just because Enterprise was crap from the word go - I dunno. Maybe it was Scott Bakula - Quantum Leap always sucked as far as I was concerned, although Dean Stockwell was great (and he's great in Battlestar too.

Certainly the trailer for Star Trek XI which I saw when we went to see Watchmen earlier this week (and more on that in a later post hopefully) looked good, although a good trailer is absolutely no guarantee of a good movie (and indeed vice versa).

Well, I hope you enjoyed reading about Battlestar - I just HAD to blog about something other than the global economic crisis just for a change, to stop myself going nuts.

A small beaker of electoral death

Last night's Political Spot on Channel 4, presented by Labour, was the weakest party political I have ever seen. It was a spoonful of electoral suicide. I can't imagine that anybody - even the people who appeared on the broadcast - came away more likely to vote Labour. A lot of people probably came away with a steely resolve not to vote Labour.

First up was the reliably charismatic (ha ha!) Alistair Darling. Followed by everybody's favourite cabinet minister, Hazel Blears. And then Geoff "I was in the front line of the Iraq war... at least at the despatch box" Hoon. All of them spouted statistics about extra public services which people will either ignore or won't believe, whilst attacking potential spending cuts by the Tories which sounded microscopic to me. (Figures being mentioned were mostly in the region of £100-£200 million, which is neither here nor there in a public spending sense.) It's come to a desperate pass when Margaret Beckett is the best thing about a PPB.

Poor old Margaret... overlooked for the party leadership in 1994, immortalised in the 1970s volume of Alan Clark's diaries as "sexy little miss-horse-face from Lincoln" (or some similar compliment/putdown). Doing the housing minister brief she must be reminded of the words of Ozzy Osborne from Decline of Western Civilization Part 2: The Metal Years:

You meet a lot of people on the way up: don't f*** with them 'cos you meet them on the way down as well!

Actually, that quote could apply equally to the New Labour project as a whole. I watched some of the Dispatches programme that followed the PPB, until the Taxpayers Alliance (actually the Taxcutters Alliance) got too much exposure and I had to switch over. It was basically attacking government waste - an easy target to be sure. Journalist Jane Moore, who fronted the programme, was right to point out that the NHS IT scheme is an expensive failure, that MoD procurement is a disastrous mess, and that the tax credits scheme was (at least initially) an administrative fiasco. I hope the programme then went on to talk about PFI, the biggest public sector financial scandal (and potentially the most long-lasting) of the lot. But I don't know 'cos I didn't make it that far in. Frank Field was given a lot of interview space, which is always unfortunate, along with Edward Leigh from the Public Accounts Committee - who despite being a right-wing Tory, is actually a lot less annoying than Field. But that's the way of these things.

This far into a period of government term it's possible to get a hell of a lot of dirt on any administration and make most of it stick. But by making bad mistakes on some public spending projects, and failing to curb obvious pork barrel waste in others (why on earth did the MoD need 75 plasma TVs, for example?) the incompetence of New Labour makes it much more likely that a Conservative government will strip away all the spending increases that have actually been useful - tax credits, the extra money for health and education (certainly there have been mistakes there, but overall both services are in a far better shape than in 1997), infrastructure funding - and get us back into the same underfunded mess we'd reached by the 1990s. And if that happened, it would basically be New Labour's fault. For sloppiness and incompetence.

But Labour sure as hell ain't gonna get out of the present poll slide with lame offerings like last night's. Maybe an accommodation has already been reached with the Tories: nice pensions and the chance to chair a review or two for the senior ministers, the opportunity to defect for the New Labour vanguard (John Hutton, anyone?) and the chance for Blairites to say 'I told you so' as Labour becomes a bankrupt husk in opposition. It certainly wouldn't surprise me.

Say no to cheap punk bandwagon jumpers

The Telegraph's current headline (as I write) is a lame-as-hell interview with ex-Australian PM John Howard.

For those who don't remember Howard (and there will most likely be many of you), he's a nasty little wanker of a politician who stayed in power in Australia for 11 years by riding out a boom driven by the Chinese demand for Australia's raw materials exports whilst pandering to the worst xenophobic instincts of the Australian voters and imposing fascist industrial relations laws. When he was swept away by Kevin Rudd's Labor party in 2007 it was the best electoral night in years (until the recent US election).

Suddenly he's trying to sound like someone with a clue on economic policy, but sadly he doesn't seem to have even the most basic grasp of economics. "It's dangerous to go too far into debt" - certainly, but the alternative of cutting back spending would get us into Herbert Hoover 1930s territory, and that's even worse.

His main policy suggestion in response to the slump is pure Reagan/Thatcherism: let's deregulate the labour market even more - making it even easier for big business to exploit workers than it already is. But John: large chunks of the industrialised world have already been following these right-wing policies for 25 years at least. And it's led to economic disaster.

What's perhaps saddest about this is that a broadsheet national newspaper thought this was a strong enough story to lead on. What next? Robert Mugabe on economic policy? Or maybe an interview with the North Korean leader Kim Jong-Il, just re-elected with 100% of the vote. They have about as much to say about the current economic situation that's useful as John Howard does. And that's the sad truth.

Say Hello to Quantitative Easing (long but worthwhile)

..or "printing money" as it's called in the media, which is not completely accurate, but close.

Today the Bank of England lowered interest rates to 0.5% - almost the practical minimum (a negative interest rate doesn't make a lot of sense, although as commercial banks don't normally lend at base rate but something above base rate (quite a lot above base rate at the present time), I guess you could have a negative base rate but maintain a positive interest rate for lenders in the real economy.)

But the interest rate cuts seem to be doing very little to reflate the UK economy (although they are drastically reducing the amount of savings in the UK, which raises the question - where are all these withdrawn savings going? Under mattresses) so the B of E is going to use quantitative easing (hereafter known as QE) to expand money supply directly.

What the B of E will do is to buy up bonds (probably some mixture of corporate and government bonds) with money it has created out of thin air. This expands the amount of money in the economy whilst reducing the supply of bonds. The idea behind QE is that the addition to the money supply makes banks more likely to lend money.

Will this work? It depends crucially on whether the factor limiting bank lending at the moment is a lack of availability of funds to lend. I would argue that it isn't - they have already had billions of pounds of bailout money injected to lend with. The main factor inhibiting bank lending is that banks think they will make a loss on any funds lent out because the economic situation is looking so grim. QE is not going to change that. So it's not going to reflate the economy.

Having said that, QE may have a role to play in preventing a very bad situation getting even worse. That's because it should prevent deflation (i.e. general falls in the price level) by expanding the money supply. Deflation is bad news because it makes consumers less willing to spend - because things are likely to be cheaper in future, so you might as well save your money now (even if you've got it under a mattress!) and buy later. This removes more demand from the economy and can depress the economy still further.

QE directly increases the money supply and so should increase the price level. This is not a cast-iron relationship but the basic 'quantity theory of money' is an accounting identity which states:

M x V = P x Q

where M is the money supply, V is the rate at which money changes hands in the economy (on average), P is the price level, and Q is the real volume of transactions (e.g. real output).

Now, QE clearly increases the money supply. So will it increase P? It depends on Q and V. Assume that Q - real output - at least isn't lowered by QE more than it would otherwise be falling. In that case everything depends on V. If banks just sit on the extra money created by QE that could decrease V and offset the increase in M, leaving P unchanged. But a full offset is unlikely. Therefore, increased M should feed through to P.

However, as the monetarists discovered in the 1980s, there is a catch. The previous paragraph assumes that M can be clearly and uniquely identified as a quantity, which just isn't the case. M isn't just notes and coins in circulation. Equally important in M, if not more so, is 'wide' money - what used to be called "M3" and "M5" in the days of monetarism in the 1980s - which includes the supply of credit and various liquid assets (indeed, 'credit creation' is really 'wide money creation'). The 'credit crunch' has massively reduced the supply of 'wide money'. So QE will only have an impact on 'wide M' (as opposed to 'narrow M') if it gets the banks lending again - which, as I indicated earlier, doesn't seem that likely to me. Having said that, the direct impact of increasing narrow M should be enough to avoid deflation in itself if pursued vigorously enough.

(An interesting side issue here is that the impact of deflation on spending only occurs because money can be held as cash, which by definition has a zero nominal change in value over time. If cash was abolished and the government decreed that we had to have our money in various types of bank account, the interest rate on which could go negative, then the incentive to hoard money in deflationary periods would disappear.)

So the overall verdict is that QE looks a bit dodgy. What's the alternative? Well, the basic problem is that banks don't want to lend. So take 'em over and MAKE them lend! It's all about restoring confidence - at (metaphorical) gunpoint if necessary. But the govt doesn't have the willpower to nationalise large chunks of the financial sector - so we're left with the current mess. Expect little or no impact on the real economy from QE - meanwhile, zombie banks continue to drag us all down with them...

"more bailouts may be required" in the US... aka "prolonging the agony".

Bad news going to worse news in the States... after $750 has already been committed, Ben Bernanke says today that even more banking bailouts might be required.

Where does this end?

Whilst the Obama adminstration's $3.5 trn budget (if it can be passed - a specific post on that later in the week) looks pretty good, the bailout just looks like it's throwing bad money after bad now.

Liquidate the duff banks, nationalise the infrastructure and start again. It's the only way.

I'm not going to be so naive as to say that the continuing slides in global stock markets are being caused by the continual extension of the bail-outs, but it probably can't be helping any.

The significant risk of downside for taxpayers in the deals that are being struck by the US government over AIG - and by the UK government over RBS and Lloyds Banking Group - are also contributing to the grim mood and the general feeling that we are plumbing some kind of bottomless pit of public money. Our old friend Paul Krugman points out the problems of the AIG deal here. Meanwhile there's a fairly measured analysis of the RBS deal by Philip Aldrick of the Telegraph here.

Longing for the days of "Dow 36,000"

Anybody remember the 'classic' book Dow 36,000 by Glassman, Hassett and Hassett? Available very cheap on the marketplace at amazon.com these days...

Basically the book was the high water mark of the eyewash that people were touting around 10 years ago saying that we were in a new technological 'golden age' and stock indices would rise by 10% a year in perpetuity, or whatever.

It's easy now, of course, to say that this is a load of eyewash. Not so easy when stock indices are rising by 10% a year and you're being labelled a contrarian for saying that it's a bubble and it might not last.

It's just the same as the poor sods who are saying now that wait a minute, the Dow is below 7,000, and we might be headed for 3,600 rather than 36,000, but then again we might be about to turn a corner. When the market is in 'herd behaviour' mode (which seems to be pretty much all the time except at the exact point there's a crash), nobody wants to know that things might be slightly more complex.

Your best option for long term investment really is what the folks at fool.com have been telling you for years: get a tracker fund, make sure the annual management charges are as low as possible, and just invest regularly. Low maintenance, low cost. The only thing whizzbang active fund managers are good at is creaming off extra charges at your expense.

Anyway I intend to get hold of a copy of Dow 36,000 as I suspect in the light of current events it will read like a comedy classic. (Very black humour, of course...) with apologies to anybody out there who's lost their shirt on the stock market. But you sure as shit won't do it again. (Or will you? Because that's what they said after the 2000 'dot com' crash...:-()

Definitional trouble for Ed Balls

Now here's an interesting one: Ed Balls thinks lotteries are unfair.

I think that's, by definition, wrong (unless the lottery is rigged, of course). Arbitrary, yes. Unfair? No more than tossing a coin.

Whatever the arguments against lotteries, 'unfairness' sure ain't one of them.

What's really unfair, of course, is kids being admitted to one school rather than another based on where they live, how intelligent they appear to be in a test, or what religion their parents claim to practise.

But these things don't piss off Daily Mail readers as much as lotteries, so Ed Balls won't mention them, of course.

If this guy turns out to be the next leader of the Labour Party then they really are up shit creek without a paddle.