Hard Times
Peter Hoskin 9:02am
In the wake of Alistair Darling and Mervyn King's speeches at Mansion House last night, most of the papers are majoring on the sorry state of our economy. Both Darling and King indicated that this is the worst shape it's been in for around 15 years, and warned that there's worse to come. For the gloom-inclined, we've pulled out some of their main points over on Trading Floor.
And whilst we're on the subject of the economy, Anatole Kaletsky's article on inflation in this morning's Times is essential reading. In it, he expresses doubts over Gordon Brown's ability to handle inflationary pressures in the right way:
“The second genuine reason to worry about the inflation figures is the challenge they pose to the Government. Will Gordon Brown withstand demands for public sector pay increases to compensate for the rising cost of living? If he gave in to such demands, the result really could be a 1970s-style wage-price spiral. Alternatively - and more probably - the Bank of England would respond to spiralling wages by sharply increasing interest rates. That, in turn, would trigger a deep recession and mass unemployment more reminiscent of the Thatcherite 1980s and 1990s than the 1960s and 1970s.
From this standpoint, probably the biggest worry has been Mr Brown's surprising combination of weakness and short-termism since he became Prime Minister. If he responds to minor hiccups such as the 10p tax row by giving away £2.7 billion, one wonders how he would react to a genuine challenge to his authority on the scale of the Winter of Discontent?”
Problem is, the 'Winter of Discontent' allusions may not be misplaced. The FT reports this morning on Unison's efforts to get 800,000 of its members to strike. If they do, will Brown be up to the challenge? Or will he buckle, as Kaletsky fears?
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TomTom
June 19th, 2008 9:45am Report this commentKaletsky was a booster for Brown not many moons ago. We had such rapture from Anatole that I expected him to beat Peter Riddell to a gong.
Now he states the obvious as if it is revelation so the scales must have fallen from his eyes.
The simple fact is that Britain has spent 25 yearst the gaming tables with North Sea trust fund revenues and asset sales financing roulette and backjack
The country has imported population to feed on a credit boom and will have a fascinating policing problem when the bust leads to a fight for survival....maybe The Civil Contingencies Act will simply suspend elections ?
Ian C
June 19th, 2008 10:02am Report this commentYou can just hear the Union leaders getting together in the pub, saying to each other "welcome back brother, think I'll have a double, this one's on Gordon"!
Kevyn Bodman
June 19th, 2008 10:49am Report this commentI fear that 'a fascinating policing problem' is all too credible a possibility.
But not just for economic reasons.There are other reasons for social tension too.
But having seen the way politicians have displayed such scorn for the voters, yes on major policy issues like Lisbon but also on squalid personal expense fiddles an important question occurs to me, when is it right to use violence against politicians?
I do not have an answer, but I'm not willing to say it's always wrong.
Trumpeter Lanfried
June 19th, 2008 11:08am Report this commentOne of Kaletsky's reasons for saying things are different now, is that 'There is no overweening trade union movement.' But there is. Trade Unionism in the public sector has never been stronger and the public sector Unions don't have to flex their muscles. They simply raise an eyebrow and finger their cheque books, whereupon the government caves in.
Nicholas
June 19th, 2008 1:10pm Report this comment"an important question occurs to me, when is it right to use violence against politicians?"
It was always an integral part of British politics, at least as a recognised risk on the part of government, until the legislation began stripping the public of their rights to self defence and armed insurrection against tyranny, post-1860. The relationship is now thoroughly inverted. The public have become dependent upon and controlled by government, with regulation and legislation impacting almost every aspect of their daily lives.
The introduction of permanent police forces in the second half of the 19th century was originally intended to serve communities as an independent (and thereby incorruptible or impartial) arm, subordinate only to the rule of law, maintaining order in public places (the Queen's Peace) and protecting private individuals and private property from crime.
This "glorious" era of policing lasted just over 100 years, perhaps until the 1960's.
Gradually, and unfortunately, the police forces have been transitioned into an increasingly political arm of enforcement by the state against the public, with an ever widening remit. This change has been exacerbated by the elimination of the public right to self-defence against crime which made them legitimate and vested partners of the police within communities.
Most recently, under Labour, we have seen the state/police bond strengthened even further and the police now acting as the actual imperative for the rule of law, encouraging the amendment and expansion of legislation to serve their own perceived needs and aspirations rather than those of the public.
There has been a new criminal justice bill for every year Labour has been in power and 3,000 new offences created. In addition the definition of an arrestable offence has been broadened to include what were once reportable offences or "misdemeanours", previously proceeded with by way of summons. That is why pensioners who cut down trees are carted off to police stations and have their DNA, perhaps their most fundamental possession, seized by the state.
These changes have been spun as providing more safety and security to the public by scare-mongering and demonising certain criminal and anti-social elements. In reality the legislative changes have done little or nothing to restore or improve the original 19th century tenets of policing (which are still valid despite Brown's "21st century" techno-babble) and the streets remain unsafe, the gangs grow and the no-go areas expand.
Laws are useless without enforcement and more laws mean more prioritisation by police forces, which in turn reinforces the opportunity for political direction.
Tradebot
June 19th, 2008 3:25pm Report this commentOh Anatole. He is bit of contradictory indicator...he has been bullish on USD, bearish on oil, Euro, etc for a while now. What happened to "When the facts sir, I change my mind."
The truth is that the credit crunch is only now starting to feed into broader economy : banks are going to be lending less and charging more. Witness the mortgage market for example. Cost of living is going up way higher than wages and this combined with fall in asset values = recession.
Oh, and this will be a global recession/slowdown - and there is relatively very little what the government can do about it. Best thing would be to stay out from the economy and let the natural course of action to take place.... but this is tinkerer Brown what we are talking about. He cannot resist - and he will end up making things even worse.
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