Some Inconvenient Truths Emerge

They weren’t right then

I’d planned to follow up last weeks item with some more on the economy but I couldn’t resist a few words on the leaking of emails from some of the worlds leading climate scientists. Quite simply, it doesn’t look too good for them.

The emails come from The University of East Anglia’s Climate Research Unit which, we are told, is a “world-renowned centre” on the subject. One, from the CRU’s Phil Jones to Michael Mann, Raymond Bradley, and Malcolm Hughes, authors of the utterly discredited ‘Hockey Stick’ upon which Al Gore based ‘An Inconvenient Truth’, is dated November 16th 1999. It reads

“I’ve just completed Mike’s Nature trick of adding in the real temps to each series for the last 20 years (ie from 1981 onwards) and from 1961 for Keith’s to hide the decline.”

Another, dated October 12th 2009, comes from Kevin Trenberth, Head of the Climate Analysis Section at the National Center for Atmospheric Research. It reads

“The fact is that we can’t account for the lack of warming at the moment and it is a travesty that we can’t.”

Another, from Keith Briffa of the CRU and dated June 23rd 2008, concerns the requests made under the Freedom of Information Act (FoIA) for the CRU to release the data it bases its conclusions on (the CRU has turned down 60 such requests). It reads

“I have been of the opinion right from the start of these FOI requests, that our private inter-collegial discussion is just that – PRIVATE. Your communication with individual colleagues was on the same basis as that for any other person and it discredits the IPCC process not one iota not to reveal the details. On the contrary, submitting to these “demands” undermines the wider scientific expectation of personal confidentiality . It is for this reason, and not because we have or have not got anything to hide, that I believe none of us should submit to these “requests”.”

Back to Professor Jones again. On May 5th 2008 a request was submitted under the FoIA for correspondence relating to AR4, an IPCC report that Keith Briffa and others at the CRU worked on together. On May 29th 2008 Prof Jones sent the following email

“Can you delete any emails you may have had with Keith re AR4? Keith will do likewise. He’s not in at the moment – minor family crisis. Can you also email Gene and get him to do the same? I don’t have his new email address. We will be getting Caspar to do likewise.”

Under the FoIA destroying information once a request has been put in is a criminal offence.

This indicates some pretty alarming behaviour at the CRU. Even George Monibot, a leading believer in Man Made Global Warming, said ‘”There are some messages that require no spin to make them look bad“.

The aforementioned Professor Mann, director of Pennsylvania State University ‘s Earth System Science Centre, was indignant; “I’m not going to comment on the content of illegally obtained emails. However, I will say this: both their theft and, I believe, any reproduction of the emails that were obtained on public websites, etc, constitutes serious criminal activity. I’m hoping the perpetrators and their facilitators will be tracked down and prosecuted to the fullest extent the law allows.” Mann’s outraged sense of justice is commendable but as the world’s leaders gather in Copenhagen to commit ever greater sums of our money to fighting Climate Change, isn’t it worth noting that obtaining money (or research grants) under false pretenses is theft as well?

‘Climate change’ is the new religion of the age. Skepticism earns you the epithet of “Climate Change Denier”. We must all tithe only now it’s called Green Taxes. And non belief earns a wrath which wouldn’t be out of place in the medieval Inquisition. Environmental blogger David Roberts once thundered “When we’ve finally gotten serious about global warming, when the impacts are really hitting us and we’re in a full worldwide scramble to minimize the damage, we should have war crimes trials for these bastards—some sort of climate Nuremberg.”

Indeed, Climate Change even has its own Holy Trinity of boosters; the media, the scientists and the politicians.

An article on the Climate email controversy in The Guardian complained that that the “The emails show the frustration some climatologists have had at having to operate under such intense, often politically motivated, scrutiny” (1). My heart bleeds for them. But whether the scrutiny is “politically motivated” or not (the Guardian must have a mind reader on staff to be able to report that) releasing your data so that your conclusions can be checked and corroborated is a basic part of scientific research. If the scientists involved can’t even match this basic standard then why should we take them seriously?

The BBC, it was revealed, had been sent these emails back on October 12th but had decided to sit on them (2). This brought to mind the comments of BBC anchor Peter Sissons that “The Corporation’s most famous interrogators invariably begin by accepting that ‘the science is settled’” and that when it comes to skeptics “it is effectively BBC policy… that those views should not be heard”. Would they have been so reluctant to report a similar set of emails suggesting fraud and deception at, say, a bank?

The reason for the media’s fondness for the theory that we are all about to die is simple enough to understand. Ask yourself which newspaper front page will sell more copies; “We’re all going to die!” or “Natural Processes at Work as They Have Been Since Time Immemorial – Nothing to Worry About”?

The scientists also have a pretty obvious reason for shoveling coal into the engine of the gravy train. According to reports, Phil Jones, the man who may soon be facing a £5,000 fine for offences under the FoIA shouldn’t be unduly concerned. Since 1990 he has brought in $22.6 million worth of funding (3). Would so much money have come his way if he hadn’t been offering solutions to the end of civilization as we know it?

The politicians’ case is slightly more opaque. After all, wouldn’t a politician who told us what we’d like to hear, that everything is ok, clean up at the polls? Possibly, but this overlooks the fact that the Holy Grail of modern politics is to raise taxes without it getting you kicked out of office.

Politicians want money as it enables them to dispense patronage. We should also not forget that many of them think (and some of them are right) that they genuinely are doing good by spending money on this or that. But the desire to tax eventually outruns the public’s desire to be taxed. So Climate Change offers the perfect solution. Politicians can dig their hands ever deeper into your pocket and its all for your own good.

And the beauty for the media, the scientists and the politicians is that Climate Change is the gift that keeps on giving. Ronald Reagan once said “the best sign that our economic program is working is that they don’t call it Reaganomics any more.” Indeed, the best sign that we have less to worry about than we are told is that they don’t call it Global Warming anymore. Hands up if you remember Global Warming? Like Pearl Jam it was quite the rage when I was a kid. Indeed, it’s best year ever came in 1998 when record breaking temperatures proved we were all about to be fried.

But then the world stopped getting warmer. As Paul Hudson, the BBC man who sat on the email, reported recently “For the last 11 years we have not observed any increase in global temperatures” (4) Indeed, in the last couple of years it’s started getting colder again. Could it have been that the scientists had been as far out with their predictions as they had been in 1973 when falling temperatures prompted the world’s leading climate scientists to put an article on the front page of Time magazine warning of ‘The Big Freeze’? Possibly. They didn’t seem to trust their ability to predict anymore having been proven wrong the last two times.

So they fixed upon Climate Change as the new bogie man. The beauty of this was that whether it started snowing or whether the sun started shining it was all evidence of Climate Change. It didn’t matter that your predictions weren’t worth the magazine covers they were printed on, now the unpredictability was the very problem!

I thought about ending this with a joke about the emission of hot air and the Copenhagen summit. But look again at the evidence and look again at what is being done. It’s no laughing matter.

1 – http://www.guardian.co.uk/environment/2009/nov/20/climate-sceptics-hackers-leaked-emails

2 – http://www.telegraph.co.uk/earth/environment/climatechange/6684281/BBC-weatherman-was-sent–climate-change-emails.html

3 – http://www.detnews.com/article/20091127/OPINION03/911270333/1031

4 – http://news.bbc.co.uk/1/hi/8299079.stm

Meltdown


When economic crises hit people eventually turn to ask two questions; 1) How did it happen? 2) How do we stop it happening again? The current crisis has been no exception.

The popular reason put forward is “greed”, usually bankers lending to people unlikely to pay it back to achieve their bonuses. Such a simple minded explanation leaves many questions unanswered such as where did the bankers get all this money to lend out in the first place?

On a more scholarly level the old Keynesian theory of recessions has been dusted off which, essentially, puts everything down to a decline in business confidence. But this begs the question of what caused the decline in business confidence. It treats the symptom, the recession, without addressing underlying illness.

At times like this the search for explanations covers ground usually left alone. Marxists have been happily claiming that Marx has, after 160 years of waiting, been proved right. But another usually obscure theory offers answers to the two questions posed at the top.

Austrian Business Cycle Theory sounds like a tedious nightmare. In fact it is a school of economic thought which proudly renounces long winded, irrelevant, and often self defeating mathematical equations, relying, instead, on logical deduction. It is probably this accessibility to the general reader that accounts for its being largely ignored by mainstream economists eager to give their art the appearance of science by dressing it up in algebra.

Austrian Theory starts with the idea that the interest rate is a price like any other, matching the supply of something to the demand for it. In this case the supply is savings and the demand is funds for investment. So, if the public decide that they want to increase the amount of money they are saving they put it in a bank. A business, on the other hand, which wants to borrow cash to invest in a new factory, must go to the bank and borrow this money.

The interest rate matches the two sides of this transaction. When people save they are, essentially, postponing spending today for spending tomorrow. The banks offer interest to savers so they can encourage them to deposit their money with them and, thus, give the banks money to loan out to businesses for investment. When people decide to save the banks don’t need to offer such a high incentive to deposit so can afford to offer lower interest rates. These lower interest rates are passed on to the businesses. They see that the cost of borrowing from a bank has fallen so they borrow to fund investment projects, such as new factories, which will not produce a return in the short run but will in the future. The signal has passed, via the interest rate, from the savers who wish to postpone their spending, to businesses who will now borrow this money to cater for the future spending.

So far so good. Savings equal investment. And when people decide they want to spend rather than save they pull their money out of the banks which forces them to offer higher interest rates to attract loanable funds. These higher rates are, as before, passed onto business which sees the signal that people are spending their money now so investment spending on future projects is stopped.

But then the monetary authority steps in. In the UK it is the Bank of England, in the US the Federal Reserve, in the EU the European Central Bank, and there are as many around the world as there are currencies to be issued. Say, for example, that the Federal Reserve decides that it wants low interest rates to spur investment and economic growth, exactly, in fact, what it is doing now. It does this through what are called ‘Open Market Operations’. The Fed offers to buy securities from banks and buys them with money created out of thin air. It’s that simple.

But this intervention destroys the interest rates ability to balance saving and investment and the two things rapidly tumble out of kilter. This is where it hits the fan.

The banks are now awash with cash and can go merrily lending out to anyone they like whether they can pay it back or not (especially if, as in the US, they are under Congressional pressure to lend to poor families). Indeed, interest rates are so low that to make a profit they may be forced to lend to just the sorts of marginal borrowers least likely to be able to pay it back.

Business, meanwhile, sees these low interest rates and begins borrowing to invest assuming that people are saving to spend in future. They may decide to build units in places like Michigan assuming that they will be bought in a few years when people have decided to start spending again.

But people are already spending. The lower interest rates mean there is no incentive for them to save as they will see no reward for it. So they go out and spend and, encouraged by the low interest rates, they borrow and run up massive credit card bills and take out mortgages at 6 times their salary.

The economy is, by now, being constantly pumped up by continuing injections of new money. But eventually the penny drops. The central bank raises interest rates. Business can no longer borrow to fund investment. People begin saving thanks to these higher interest rates and, coupled with a fall in consumer borrowing, another source of income for business dries up. We now have a recession.

That, in a nutshell, is the theory. How does it stack up in practice?

A recent book by Thomas E Woods, ‘Meltdown’, applies the theory to the US and shows how the property bubble (like the dot com bubble before it) was inflated then popped by the loose monetary policy of Alan Greenspan’s Federal Reserve.

But the theory doesn’t just hold for the US. In Britain too we’ve had a long period of historically low interest rates. Between 1993 and 2001, interest rates averaged 6%. From 2002 to 2008 they averaged 4.5%. This prompted corporate borrowing in the UK to balloon from £99 billion in 2003 to £269 billion in 2008. Consumer debt also rocketed to more than £1.4 trillion. Then interest rates rose from 4.5% in July 2006 to 5.75% in July 2007; right when the crisis began.

Much has been left out here, notably the role of the inevitable inflation which follows the credit expansion in prompting central banks to raise interest rates. In the UK the RPI index rose from 2.6% in April 2006 to 4.8% in March 2007 prompting the Bank of England’s to raise interest rates from 4.5% to 5.75% in July 2007. Similar inflationary pressures in the US saw the inflation rate rise from 2.6% in spring 2005 to 4.75% in the autumn. This prompted the Fed to edge the Fed Funds Rate up from 1% in mid 2004 to 5.25% in early 2006 where it stayed until late 2007. These central bank rate increases were a direct cause of the bursting of the property boom the same authorities had created.

We’ve also not looked at how the credit expansion especially effects the capital goods industries, such as manufacturing or building which thrive on cheap borrowing but suffer disproportionately in the credit contraction. In June this year LDV Vans went bust in the UK after failing to secure a government bailout. In the US Chrysler had no such trouble getting its hands on taxpayer cash. In the UK the housing construction market declined by 13% in 2008. In the US McGraw-Hill Construction calculated a 12% decrease in construction starts in the same year.

So we have, perhaps, an answer to our first question. We can also answer another question of why Austrian Theory is paid little attention by monetary managers; Shifting the blame from greedy bankers, mysterious declines in business confidence or inherent flaws in capitalism and placing responsibility squarely with the mangers of the national currency is a sure way to earn the opposition of those very same managers. For an answer to the second question, how stop this happening again, Ill return next week.

Heres a link to the book ‘Meltdown’ http://blog.mises.org/archives/009387.asp

Bill Maher – American Idiot

The Constitution of the United States opens with the words “We the People”. It doesn’t say ‘We the Government’ or ‘We the Politicians” or ‘We the Experts From Ivy League Universities’. From its very inception the government of the US was based on Locke’s idea of the consent of the governed.

Clearly someone needs to explain this to TV comic Bill Maher. A few weeks ago he described the US as a “stupid country”. In response to the flood of opposition he got to this he responded on the Huffington Post blog.

Maher rattled off a list of facts proving the stupidity of the average American that would do the smuggest European proud. Ignorance of American constitutional arrangements, basic science and elementary history were just some of the nuggets trotted out to prove it. Maher asked “And these are the idiots we want to weigh in on the minutia of health care policy?”

Well if you believe in We the People then yes, that’s exactly the sort of people you want weighing in. It is We the People, after all, who will end up footing the bill for whatever healthcare measure is eventually churned out by Congress. These idiots that Maher has such contempt for are hard working taxpayers. Before the elites can do a single solitary thing they must first confiscate the resources to do it from the earnings of these idiots hard work. To simply take their money and then deny them any say in how it is spent is nothing less than legalized robbery. The cry of the American Revolution was “No taxation without representation”. We can only conclude that Maher would have fought with the redcoats at Lexington.

A famous Republican, Abraham Lincoln, once described “government of the people, by the people, for the people”. Maher unashamedly believes in only two of these; government of the people for the people as he views the average American (though, one guesses, not himself) as too dumb to participate in government by the people.

Maher concluded his tirade by saying “And if you want to call me an elitist for this, I say thank you. Yes, I want decisions made by an elite group of people who know what they’re talking about.”

But Ronald Reagan nailed this, discussing the American tradition of democracy, in his 1964 speech to the Republican convention; “This idea? that government was beholden to the people, that it had no other source of power is still the newest, most unique idea in all the long history of man’s relation to man. This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.”

http://www.huffingtonpost.com/bill-maher/new-rule-smart-president_b_253996.html

Mea Culpa

The guilty men

I find it very difficult to say anything bad about the Republican party. After all, this is the party which was founded to eliminate the original sin of the United States; slavery. It is the party which fought the racist Jim Crow laws of the southern Democrats and pushed, against opposition from Democrats in Congress, for an anti lynching bill. It is the party which, through Robert Taft, Barry Goldwater and Ronald Reagan, stopped the onward march of collectivism, proved Marx’s ‘laws of motion’ to be the fantasies they were and defended the liberal freedoms of the enlightenment.

But the GOP is going to have to offer up a few mea culpa’s. The mid terms of 2010 and the Presidential election in 2012 are likely to be focused on the dire state of the American economy. If the GOP are to fight the spendaholic suicide of the Democrats in the White House and Congress they need to make a confession; they are partly responsible.

In 2001 the American economy was reeling from the twin shocks of the bursting of the dot com bubble in stocks and the 9/11 attacks. As a new book by Charles K Rowley and Nathanael Smith* shows, during the 1980’s the tight monetary policy of Paul Volcker’s Federal Reserve offset the loose fiscal policy of the Reagan deficits. In the 1990s, by contrast, the loose monetary policy of the Greenspan Fed was offset by the tight fiscal policy of the Congressional Republicans. “So, in the two decades before 2000”, Rowley and Smith write, “fiscal and monetary policies tended to offset each other, and were never both expansionary at the same time.”

In reaction to the shocks of 2001 this was changed. Bush Jnr embarked on a massive program of Keynesian stimulus spending. From a budget surplus of $236 billion in Clinton’s last year in office the Federal budget plunged into deficit to the tune of $413 billion in 2004. As is commonly held, this was not the result of tax cuts. As Rowley and Smith point out “Tax revenues and social insurance contributions in 2007, at $13,866 per capita, were higher than their 2000 levels”. From 1992 Federal spending per capita held steady at $12,500 per annum. From 2001 it began climbing by 2.45% per annum climbing to nearly $15,000 in 2008….Dick Cheney defended the ballooning deficit with the ludicrous assertion that “Reagan proved deficits don’t matter”. But, as we’ve seen, Reagan’s deficits were offset by the monetary tightness of the Federal Reserve. No such restraint was offered by Alan Greenspan. Over the course of 2001 the Fed Funds Rate was repeatedly slashed from 6.25% to 1.75%.

These Keynesian mistakes led directly to the current mess. From mid 2004 Greenspan began trying to mop up some of the money he had sprayed around to soften the landing of 2001. By mid 2006 the Fed Funds Rate was back up over 5% and many Americans, who had taken on the adjustable rate mortgages Greenspan himself had recommended in early 2004, found themselves unable to keep up repayments. The rest, as they say, is history.

Out of simple honesty the GOP needs to acknowledge the disastrous economic policies of the Bush administration. But aside from offering up a dose of humility which could be a welcome tonic to the hubris and arrogance of Obama, Pelosi and Co, this would offer an opportunity for the Republicans. When looked at more closely we see an object lesson in the downside of crude Keynesianism and a warning of a grim future stemming directly from this administrations woefully misguided policies.

Bush’s expansionary fiscal stance was mild compared to Obama’s eye watering $1.6 trillion deficit forecast this year. The Fed Funds Rate, at a range of between 0% and 0.25%, is lower than even Greenspan dared go. And we saw where that got us. The recession of 2001 – 2002 was one of the shallowest on record but this was bought with Keynesian policies at the price of the greater meltdown we face now. But then Keynes himself, the intellectual giant so much back in vogue, simply shrugged his shoulders when faced with this and famously declared “In the long run we are all dead”.

Well Keynes might be but we are stuck with the fallout of such glib, short termist thinking. The philosopher George Santayana wrote “Those who cannot remember the past are condemned to repeat it”. Remembering the doomed Keynesian policies of the Bush administration might be difficult for Republicans going into elections. But if the American economy is going to return to the growth and job creation which is the source of real, long term prosperity, the failure of these policies needs to be highlighted. And if they can prove they have learned from their mistakes, the GOP might be best placed to make the case.

* ‘Economic Contractions in the United States – A Failure of Government’ by Charles K Rowley and Nathanael Smith

Unhealthy Obesession


Dean Acheson famously said that Britain had “lost an Empire and has not yet found a role”. That was in 1962. In 2009 it seems we Brits have finally found one; looking down our noses at the Americans.

Russell Brand recently took time off from making offensive phone calls to old men to weigh into the debate on US healthcare, proudly announcing at the MTV Video Music Awards (a novel setting for a policy pronouncement) that in the UK , unlike the US , “instead of letting people die in the street we have free healthcare!”

You probably shouldn’t expect someone’s eyesight to be too sharp when they’re peering down their nose from astride their high horse but even so, Brand managed to fit two glaring errors into just 12 words.

First, the National Health Service is not free. Doctors and nurses aren’t volunteers and neither are the 2 administrators for every single bed in the system. The NHS consumes 18% of all government spending. That comes from taxes. Secondly, he is right that people rarely “die in the street”. In the UK you die of poor treatment or hygiene in the hospital.

That’s if you get in. As a centralised, socialised system the NHS is driven not by profit and loss in competition but by a deluge of ever changing targets and directives from central government. One target mandates the maximum amount of time a patient should wait after arriving at the hospital before receiving treatment. But targets invite fiddling and ambulances are kept waiting outside hospitals so as not to start the clock ticking. A letter obtained under the Freedom of Information Act from Chairman of the Ambulance Trust Graham Meldrum reveled 7,600 instances of this in October last year alone.

Once inside the NHS cannot even keep its premises clean. One result is Clostridium difficile, a bacterial infection. In England in 2007 C Diff was mentioned on 5,465 death certificates being listed as the main cause of death on 2,298 of them. By contrast, in the same year, 47 British soldiers died in Iraq . Then there is Methicillin-resistant Staphylococcus aureus, MRSA for short. In 2007 MRSA was mentioned in 1,593 death certificates being given as the cause of death in nearly 500. Again, in 2007, 42 British soldiers died in Afghanistan.

If the unsanitary conditions don’t get you the treatment, or lack of it, might. For example, for all cancers 66.3 % of American men and 63.9 % of women survive more than five years. In Europe just 47.3% of men and 55.8% of women survive that long. Breast cancer mortality is 88% higher and Prostate cancer mortality is 604% higher in the U.K. Neither do these treatments bankrupt poor families. Out-of-pocket expenses by American patients are 12.6% of national health spending, lower than in Germany, Japan, Canada and most of Europe.

These are the facts that get lost in the debate about ‘Obamacare’. The primary aim of ‘reform’ is not to improve the health of the people, though its supporters no doubt believe this would follow, but to introduce ‘equality’. These moral considerations are far less quantifiable.

Earlier this year Conservative MEP Daniel Hannan was interviewed about the NHS on Fox News and called it a “60 year mistake” which he “wouldn’t wish it on anyone”. For this saying this the Health Secretary of the UK government branded Hannan “unpatriotic”. He didn’t say he was wrong, and any attempt to debate the NHS in the UK invites the charge that you want to see poor people die. Its often said that in secular Britain faith in the NHS is the closest thing we have to a religion these days. Indeed, to see the venom directed at Hannan was to see something not a million miles from the denunciations of the medieval church. But blind faith, even in socialism, is no substitute for reason.

The same thing is being tried in the US in the current debate; the smearing of opponents of socialization as uncaring and elitist, or, as Jimmy Carter tried to put it recently, racist. That is why it is so vital to look at the statistics behind the socialists empty rhetoric.

Florida Congressman Alan Grayson said 44,000 Americans (out of a population of 300 million) die each year as a result of not having health insurance. But no system will be perfect. Leading oncologist Karol Sikora estimated 10,000 cancer deaths (out of a population of 60 million) in the UK every year because we have the NHS as opposed to another, more efficient system.

One of the most honest and insightful commentators on socialized medicine in the UK, James Batholomew put it this way; “I certainly do not hold up the USA as a model healthcare system. It is deeply flawed. But it is still much better at saving the lives of the greatest possible number than our, far more deeply flawed system. It depends what you want: a flawed system that saves more lives or a disastrous system that people feel is virtuous. This is a secular version of creationism. Many people in Britain love the NHS. They don’t care about evidence. They don’t care how many die. Believing in the NHS makes them feel good about themselves. I find it appalling that people are so self-indulgent and so uncaring about the reality.”

For more information on James Batholomew and his thoughts please refer to his book “The Welfare State We’re In” at http://www.amazon.co.uk/Welfare-State-Were-James-Bartholomew/dp/1842750631

Reasons to be Cheerful

Leader of Germany’s Free Democrats, Guido Westerwelle, looking smug. And rightly so

As the world economy gasps for breath there is a struggle to form a narrative for the momentous events of the last two years.

On the one hand we have the likes of Richard Posner who, in his new book ‘A Failure of Capitalism’, treads the familiar ground of blaming greedy bankersand other such out dated clichés for the credit crunch. On the other are those like Thomas E Woods who, in his book ‘Meltdown’, lay the blame at the door of interfering legislation like the Community Reinvestment Act and the Federal Reserve’s irresponsibly lax monetary policy.

It is a struggle worth fighting. In the wake of the Great Depression of the 1930’s the standard story came to be that unregulated capitalism had conned innocent investors into putting their life savings in a bubble market in stocks which burst in 1929. The ‘do-nothing’ president Herbert Hoover vainly trusted in the free market to revive the economy and recession turned into Depression. Franklin Roosevelt was then elected who rescued the economy with vast amounts of Keynesian deficit spending.

Excellent recent books by Amity Shlaes and Burton W. Folsom comprehensively demolish this myth. But it was a myth which persisted for decades and it was used to justify ever more debilitating levels of taxation and government spending culminating in the economic chaos of the 1970’s.

So ideas matter. If the wrong conclusions are drawn and false lessons learned from the last two years of turmoil we could find ourselves, once again, saddled with its doleful effects for decades.

Unsurprisingly the ‘market bashing’ explanation has found favour on the left. In the US President Obama castigated Republicans for filleting financial regulation “for the sake of a quick profit at the expense of a healthy market”. In the UK Gordon Brown condemned “the right wing fundamentalism that says you just leave everything to the market” in his party conference speech in late September.

But there are encouraging signs for the right that this view isn’t becoming received wisdom as the Depression myth so damagingly did.

Back in June the voters of Europe went to the polls to elect the European Parliament in one of the biggest elections in the world. Or it would be if more than 43% of voters turned out. Even so, the results were an unequivocal slap in the face for the centre left whose largest grouping in the Parliament, the Party of European Socialists, slumped to just 161 seats compared to 264 for the centre right European People’s Party’s 264.

On September 27th Germany went to the polls. The Social Democrats (SPD – imagine the Democrats inlederhosen) were dumped out of government after 11 years with their lowest share of the vote since the 1930’s. Even more encouraging was the nature of the parties who benefited. The SPD’s former grand coalition partners, the centre right Christian Democrats (imagine Arlen Specter in lederhosen – on second thoughts, don’t) and Christian Social Union saw a modest decline in their share of the vote and will form a coalition with the elections big winners, the Free Democrats, a small government party in the Goldwater/Reagan mould.

The same day the Portuguese electorate slashed the Socialist party’s share of the vote from 45% to less than 37%. Next year the UK votes and with the Conservative party holding a lead of between 10% and 14% in the opinion polls a further advance for the right looks on the cards.

So we have a real dissonance here between the narrative exampled by Posner, Obama and Brown, of the perils of free market capitalism and the decisions of voters in the midst of this crisis. True, the circumstances are wildly different. The SPD had run Germany for 11 years, the Socialists in Portugal have been in office for 11 of the last 14 years and the Labour Party have run Britain since 1997. For them to have only just come to their conclusions about capitalism suggests a doziness which would do Rip van Winkleproud.

But the clear signal from voters of the realisation that it will be the private and not the public that pulls us out of this, of the necessity of fiscal responsibility and the rejection of government as a solution can only be encouraging for the Republican Party as it heads into the midterms late nextyear.

Gutless Gordon

Doh!

It’s difficult to remember now but just over a year ago, in July 2007, the Independent could write that “The prospect of a snap election was increased by two weekend polls which showed that the change of prime minister has given Labour a “Brown bounce” after the departure of Tony Blair”. Labour had a 7 point lead over the Conservatives in the polls and had just won two by elections.

How things change. At the Conservative party conference that October David Cameron announced plans to raise the inheritance tax threshold to £1 million. Overnight the Conservatives saw a 6 point Labour lead in the poll turn into a 3 point lead for them.

Gordon Brown, the man who became Prime Minister after a sham of a Labour leadership election, called a sudden halt to talk of an early election, admitting that he’d considered it, but explained that he “wanted to get on with my job of putting my vision of what the future of the country was to the people of the country” before he held it.

His claim that he was not influenced by opinion polls convinced no one. Cameron said “The Prime Minister has shown great weakness and indecision”, and then Liberal Democrat leader Menzies Campbell said “We are talking about loss of nerve”.

A pattern of behaviour soon began to emerge. In October 2004 the new European Union Constitution was signed. The Labour party manifesto for the 2005 election stated clearly “We will put it (the Constitution) to the British people in a referendum”. Then, in early 2006, both France and the Netherlands rejected the Constitution in their referendums and the document died.

But, like a ‘Halloween’ movie, it rose from the dead, this time as the Lisbon Treaty in early 2007. But in August Brown decided that the Lisbon Treaty was, in fact, so different to the Constitution that Labour’s 2005 manifesto commitment to a referendum no longer held. Again, he claimed that opinion polls showing a 2 to 1 majority against the treaty were not a factor.

It was difficult, however, to find anyone who actually agreed with this view of the Lisbon Treaty. From his own party, Austin Mitchell MP said “If it looks like a constitution, if it smells like a constitution, if it reads like a constitution, so far as I’m concerned it’s a constitution”. Valery Giscard D’Estaing, one of the authors of the Constitution, said “The difference between the original Constitution and the present Lisbon Treaty is one of approach, rather than content. The proposals in the original constitutional treaty are practically unchanged”. Danish Prime Minister Anders Fogh Rasmussen said “The good thing is that all the symbolic elements are gone, and that which really matters – the core – is left”. Angela Merkel, the German Chancellor, stated that “The substance of the constitution is preserved. That is a fact”. The Irish Taoiseach Bertie Ahern proudly stated that “90 per cent of it is still there…These changes haven’t made any dramatic change to the substance of what was agreed back in 2004.”

The game was given away in a speech at the London School of Economics when Giuliano Amato, another who drew up the Constitution, said “The good thing about not calling it a Constitution is that no one can ask for a referendum on it”. Brown now said that “The proper way to discuss this is in the House of Commons and the House of Lords, and I believe Parliament will pass the legislation”. Like the election in October, the promised referendum was cancelled.

And the pattern has continued. In the week before the Labour conference in September a group of MP’s contacted the party’s National Executive Committee asking for nomination forms to be sent out. They cited a clause in the party’s constitution which states that nominations “shall be sought each year”. But after a meeting attended by Brown the NEC refused to send out the ballots citing a ‘convention’ of not doing so while in power. It went on to say it did not want to encourage “internal debates”.

That now makes three elections which this un-elected Prime Minister has run away from; the general election he was considering last autumn, the referendum on the Lisbon Treaty and the ballot of his own party membership.

In the future psychologists will probably produce entire theses on Gordon Brown’s almost pathological timidity but for now it seems clear that the man who spent so long plotting in the background for the top job doesn’t function well in the glare of publicity it actually brings. The voters will have to wait until 2010 before they finally get their say.

(Printed in The Caerulean, Issue 12, December 2008)

Laissez faire is not the only culprit


Not guilty

Not since Henry I ordered “that all the mint-men that were in England should be mutilated in their limbs; that was, that they should lose each of them the right hand, and their testicles beneath” have bankers been so unpopular.

Politicians, grateful for cover for their own responsibility for this mess, issue blood curdling threats against bankers salaries. The left argues that banks should be left to stew as they brought this on themselves, a stance they have never adopted towards other failing enterprises such as coal mines or car factories. Meanwhile the ordinary voter is wondering why there appears to be a bottomless pit of cash for banks when parties are proposing spending cuts.

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A reply to ‘National Socialist Health System?’

In the US this summer everywhere I went the second thing people said upon finding out I was British (after ‘thanking’ us for Dancing With the Stars) was to ask about the NHS. The debate over healthcare reform is raging in America.

The debate is raging here too it seems as evidenced by the article ‘National Socialist Health System?’ in the last London Student. Like many contributions to the debate, it contained some fallacies.

The first fallacy came with the assertion that the controversy over nationalizing 1/7th of the American economy was “essentially manufactured and delivered by some of the most toxic elements of the American right-wing press.” I spent two weeks in Minnesota, one of the most social democratic states in the US (the only state never to vote for Reagan). Contrary to the articles assertion, the people quizzing me about the NHS were not raving right wing lunatics but ordinary Americans understandably concerned about the vitally important question of what happens when they get sick.

Next the article referred to the “46 million Americans without any health-care cover whatsoever”. First, the figure of 46 million contains 35 million who could afford insurance if they wanted to but choose not to. They may be young, sporty, don’t drink and smoke. Like a man who lives on top of a mountain doesn’t take out flood insurance, these Americans decide the chances of them needing healthcare are so small it’s not worth the cost.

Also the author didn’t mention Medicaid, the government insurance scheme for Americans on low incomes. Medicaid spent $204 billion in 2008 and will be bankrupt in the next decade.

The article mocked the “Freedom to suffer and to die prematurely due to inadequate health-care access”. But this sarcastic freedom doesn’t hold up. For example, for all cancers 66.3 % of American men and 63.9 % of women survive more than five years. In Europe just 47.3% of men and 55.8% of women survive that long. Breast cancer mortality is 88% higher and Prostate cancer mortality is 604% higher in the U.K. Neither do these treatments bankrupt poor families. Out-of-pocket expenses by American patients are 12.6% of national health spending, lower than in Germany, Japan, Canada and most of Europe.

Finally the article said that the NHS does not have “Orwellian death panels or bureaucratized guidelines on the worthiness of treatments for various categories of people”. This ignores the existence of the National Institute for Health and Clinical Excellence (NICE). This is the body which decides whether the NHS can afford this or that treatment, such as memantine for the treatment of Alzheimer’s disease and various drugs for treating renal cell carcinoma, both of which NICE refused to provide as not being “cost effective”.

American healthcare is clearly not perfect. Florida Congressman Alan Grayson said 44,000 Americans (out of a population of 300 million) die each year as a result of not having health insurance. But neither is ours. Leading oncologist Karol Sikora estimated 10,000 cancer deaths (out of 60 million) in the UK every year because we have the NHS as opposed to another, more efficient system. Discussing these issues makes you a concerned citizen, not a foaming nutcase.

(Printed in London Student, vol 30 issue 3, 19/10/09)

Learning how to tolerate debate

Voltaire is reputed to have said “I disapprove of what you say, but I will defend to the death your right to say it”. The controversial barring from the UK of Dutch MP Geert Wilders shows that, among our leaders anyway, Voltaire’s attitude is now about as fashionable as shell suits.

Foreign Secretary David Miliband resorted to the old saw that opponents of free speech traditionally use, saying “We have profound commitment to freedom of speech but there is no freedom to cry ‘fire’ in a crowded theatre”. But Wilders isn’t planning to scare people in an Odeon. Besides, if the theatre in question was showing Wilders film Fitna Miliband is unlikely to be troubled. When asked whether he’d seen the film he described as full of “extreme anti-Muslim hate”, he said no.

Free speech is not simply a convenient cloak for the ‘far right’ to hide racism. The International Covenant on Civil and Political Rights defines freedom of speech as “the right to hold opinions without interference. Everyone shall have the right to freedom of expression”. Left wing icon Noam Chomsky wrote “If we don’t believe in freedom of expression for people we despise, we don’t believe in it at all”.

I won’t address whether Wilders is right or wrong to call the Koran a “fascist” book. What will be addressed is whether Wilders is a racist. He may be, he may not, but his film isn’t for the simple reason that being anti Islam is not the same as being racist. Islam, after all, is not a race but a religion. You are born black or white, you are not born Muslim anymore than you are born Communist.

So if Islam is not a race but a religion is it still open to criticism? In a democracy, the answer has to be yes. For example, The Communist Manifesto has been accused of sending millions into gulags and killing fields but you don’t get communists in the UK clamoring for the people who say this to be banned or prosecuted.

Communism is an ideology, Islam is a religion. But if you don’t believe in God there isn’t a difference. Then Islam becomes, not a path to paradise, but a way of viewing the world just like Communism. And in a modern secular society the right to criticize competing ideologies is vital. Revealingly, when Communists did get the power to set the limits of debate they sent those that disagreed to the gulags and the killing fields.

Christianity has learned to live with democratic debate and, in some cases, simple abuse. In 1997 Cradle of Filth released T shirts declaring “Jesus is a Cunt”. In 2005 the BBC screened Jerry Springer – The Opera which depicted Jesus as a gay baby. In 2006 Richard Dawkins wrote in The God Delusion that “The God of the Old Testament is arguably the most unpleasant character in all fiction”. In none of these cases was action taken by the authorities worried that the Archbishop of Canterbury was about to declare a fatwa.

Considering the lengths which our leaders go to to say that Islam is a peaceful religion it certainly seems odd that free speech has to be curtailed so as not to provoke violence. Indeed, the majority of Muslims, like most people right now, are probably more worried about their jobs and homes than a previously obscure documentary made by an extravagantly coiffured Dutchman.

Miliband and others have demonstrated in this episode not just contempt for free speech but a singular lack of faith in Muslims to take part in a plural democracy. Supreme Court Justice Potter Stewart said “Censorship reflects society’s lack of confidence in itself”. In this case the real lack of confidence is that of our leaders in their Muslim constituents.

Printed in London Student Issue 10, 02/03/09