Our EU 'partners' demonstrate their trustworthiness It was a stirring demonstration of international solidarity – Europe’s leaders standing shoulder to shoulder vowing to work in unity to defeat the global credit crunch. The leaders, including German chancellor Angela Merkel, were particularly scathing about go-it-alone efforts by some countries, such as Ireland and Greece, to guarantee savers’ deposits. This “beggar-thy-neighbour” approach was entirely wrong, they argued. Far better if Europe stands together. The touching show of unity lasted less than a day. Within hours Merkel announced that Germany was in fact going it alone too and would guarantee bank deposits, triggering chaos across the continent’s financial markets. The message was loud and clear – the rest of Europe could go hang. Some measure of stability returned later in the week when central banks around the globe cut interest rates in coordinated move, but by then the damage had been done. At a time when Europe needed firm resolve and steady nerves, the EU offered only panic, confusion and selfishness. We shouldn’t really be surprised any more. It happens every time. If there is one thing Britain should have learned from our years in the EU it is that our European “partners” will always put national self-interest ahead of the ideals of unity and cooperation. It happens in Afghanistan, where Germany and France speak brave words about the need to confront the Taliban, but then stubbornly refuse to carry their share of the burden, preferring instead to let British troops do their fighting for them. Similarly, the French cling to the Common Agricultural Policy (CAP), despite clear evidence that reform would boost free trade and allow poor countries access to rich European markets. Only the British are expected to put the EU ahead of our national interest – and we fall for it every time. Take for example Tony Blair’s disastrous decision in 2005 to surrender Britain’s £7bn EU rebate – famously hard won by Margaret Thatcher – in return for a solemn promise of “fundamental reforms” of the CAP. That money has long since been gobbled up by the EU’s notoriously corrupt bureaucracy, but the promised reforms of the CAP have never materialised – and never will. The French will never allow it. One side effect of the current financial crisis may be the end of the dream of a European superstate – a project that has been streamrollered through by the continent’s elite in the face of an emphatic rejection by the French, Dutch and Irish peoples (the British have never been allowed a vote, despite being promised one). Perhaps in its place will emerge a more modern, flexible, equitable Europe that is more responsive to the needs of its peoples, and less destructive and selfish in its dealings with the Third World. Every cloud is supposed to have a silver lining.

16.10.08 13:34 Permalink / comment

The love of money is the root of all evil Pope Benedict weighed into the financial crisis this week saying it showed that money was futile. “Now with the collapse of big banks we see that money disappears, is nothing and all these things that appear real are in fact of secondary importance” he said. Well, if anyone understands the true value of money it should be the Vatican – because they have always had plenty of it. Currently the papacy relies on earnings from roughly one billion US dollars (£676 million) worth of stocks, bonds and property. In addition Catholics around the world – some of them desperately poor – contribute a further 79.8 million dollars (£46 million) via the collection plate to the Peter’s Pence fund that goes directly to the Holy See. Not half bad for an organisation that thinks free market capitalism has "grown too much and badly in the past two decades". But surely, given the Pope’s comments, it can only be a matter of days before the Catholic Church announces it is giving away all its money to the poor? Yeah sure, and my name is Cardinal Newman.

16.10.08 13:29 Permalink / comment

Try the Rizla test If you’ve a packet of Rizlas handy try squeezing a cigarette paper between the three major political parties on key issues – you won’t have much luck. From the economy to Europe, crime to welfare, education to health, Labour, the Tories and the Lib Dems all jostle for space on that tiny scrap of territory they call the middle ground. Faced with the wide spectrum of vivid political opinions, our major political parties say we can have any colour we like – so long as it’s an indistinguishable shade of grey. Take for example the meltdown in the financial system. All three parties agree the poor banks have been picked on by those nasty city slickers and vast amounts of taxpayers’ money must be offered to help them out. I’m sorry but I just don’t buy it. City traders are ruthless gamblers who have taken advantage of the current chaos to make a killing – but they didn’t cause the problems in the first place. The real responsibility lies much closer to home – right here in the north – where thanks to the incompetence and irresponsibility of former building society bosses, the region’s once proud financial institutions have been brought to their knees. After all it wasn’t the hedge fund managers or short sellers who encouraged punters to gamble on house prices with dodgy buy-to-let mortgages, or who handed out 125% mortgages like sweeties, or who dreamt up “self certified” mortgages, which simply encouraged borrowers to lie about their true earnings. No, these shocking mistakes were made in the boardrooms of the Halifax, Bradford and Bingley and Northern Rock. That sound you can hear is the building society founders spinning in their graves. Yet our politicians are prepared to spend vast amounts of our money rescuing failed banks without the merest hint of criticism of the people responsible. Contrast that with the United States, where the fury of ordinary people has at least found an outlet on the political stage. One Congressman said when “mom and pop” stores make bad business decisions, they go out of business, but the big banks expect ordinary people to pay for their mistakes. Wouldn’t it be marvellous if we had politicians on this side of the pond prepared to champion the little guy in this way? I’m not holding my breath. Of course a bail out deal will have to be agreed in the US, but not before the ordinary “mom and pops” have given the fat cats a good kicking - with a warning that their patience and generosity are not limitless. Not so in the UK. Here the message to the banks is it doesn’t matter how stupid, feckless or incompetent you are, those nice Messrs Brown, Cameron and Clegg will always be on hand with a blank cheque from the taxpayer should anything go wrong. It is hardly likely to encourage responsible behaviour in the future, is it?

7.10.08 15:28 Permalink / 2 Comments / comment

Tony the Tiger is innocent! Now we know who to blame for the outbreak of obesity among schoolchildren – step forward Tony the Tiger, Coco the Coco Pops Monkey, Moo the Diarylea Cow and Snap, Crackle and Pop. In a report compiled by the once-sensible Which? – haven’t they got anything better to do? – these so-called cartoon baddies have been blamed for promoting foods that are high in fat and sugar. And as we’ve come to expect from the health zealots, Which? wants further heavy-handed regulation, when a smidgeon of common sense would be sufficient. Children become obese because they eat too much of the wrong sort of food and they don’t get enough exercise. The people best placed to deal with this are not the cereal companies, nor even poor old Tony the Tiger, but the mums and dads – yoo, hoo! remember us? Perhaps if we took parental responsibility more seriously and stopped blaming everyone else, we could start to tackle the problem. Besides which I’m not sure how far cartoon characters influence what children eat. I’ve been reading Desperate Dan since I was a boy, yet I’ve never managed to eat a cow pie with horns sticking out of the top despite a life time’s searching.

7.10.08 15:22 Permalink / comment

Keeping the lights on This may sound perverse, but as the country seemingly writes off Gordon Brown as a dead loss, I’m finding strong reasons why his beleaguered administration deserves our support. Why? Simply because Labour is the only major political party to take seriously one of the gravest problems facing the UK over the next decade – the looming energy crisis. According to Ian Fells, Emeritus Professor of Energy at Newcastle University, we are likely to see severe power shortages emerging any time between 2012 and 2015 because of the growing gap between supply capacity and expected demand. Professor Fells warns the UK could be hit by repeated power cuts that would shut down public transport, reduce hospital services and cause chaos in supermarkets and offices. The impact on our economy would be devastating – far more serious than the last time we suffered major power cuts in the 1970s when computing power, email and mobile phones were not the essential business tools they are today. As Professor Fells put it: "Electricity is the life blood of civilisation. Without it we spiral down into anarchy and chaos." Yet the response from our political class to this very real threat has been little short of pathetic. The Tories seem to think if everyone straps a little windmill to the roofs of their Notting Hill townhouses then everything will be OK. The Lib Dems, meanwhile, have forfeited the right to be taken seriously on energy by swallowing the lunacies of the eco-fundamentalists hook, line and sinker – no coal, no gas, no nuclear. It’s true that for more than ten years Labour has neglected its duty to secure future energy supplies, but at last there are at least some signs that ministers are beginning to recognise the urgency of the problem.  Business secretary John Hutton told this week’s Labour Party conference that clean coal technology and a “renaissance in nuclear power” were needed if we weren’t to leave ourselves at the mercy of gas imports from unstable and unfriendly foreign regimes. He bluntly told delegates: "No coal plus no nuclear equals no lights. No power. No future." Contrast this clear thinking and straight talking with David Cameron’s pandering to fashionable eco-opinion. His most notable contribution to the debate was to borrow a private jet so he could hold a photo-opportunity on an Arctic glacier. What Labour have grasped, but the Tories have not, is that in the current economic climate green politics are a complete dead duck. Obsessions about global warming – or is it global cooling now? – are indulgences tolerated in an affluent society when there isn’t anything more serious to worry about. In hard times – and we are in for an extended period of those now – thoughts inevitably turn to more pressing matters, like trying not to freeze to death. When the election comes I suspect I won’t be alone in looking for a party with grown-up policies that might just keep the lights on. At the moment Labour are winning hands down.

30.9.08 15:56 Permalink / comment

The archbishop gets it wrong When Rowan Williams, the sharia-supporting Archbishop of Canterbury, spoke out in defence of Karl Marx this week it was tempting to shrug one’s shoulders and file it under “Well, what did you expect?”. But when the normally sensible John Sentamu, Archbishop of York, joined in the attack on modern capitalism, it is time to sit up and take notice. Bishop Sentamu condemned traders who cashed in on falling share prices as "bank robbers and asset strippers". I’m afraid the Archbishop, a courageous and godly man, simply does not understand the market. The only reason the so-called short sellers were able to force down the price of banking shares was because they were overvalued in the first place, built as they were on a mountain of bad debt and years of irresponsible loans. If the market fundamentals underpinning the shares had been sound, the price could not have been forced down as far as it was. By helping expose the real value of shares short sellers perform a vital service. The last thing we want is an artificial, rigged market that protects badly-managed companies from economic realities.

30.9.08 15:54 Permalink / comment

We're all doomed! Private Fraser, the dour Scottish coffin maker from Dad’s Army, would be in his element in today’s spiralling economic crisis. “We’re all doomed!” just about sums up the reaction of the commentariat as once solid banks collapse on a weekly basis. Certainly, there is no shortage of material for the gravediggers of modern capitalism – from Northern Rock, to Bear Stearns, Freddie Mac, Fannie May, Lehman Brothers, AIG and now HBOS. There is little sign that the crisis is over – or even at its peak - and there’s a feeling abroad that things are likely to get worse before they get better. This has all been greeted with an obscene degree of lip-smacking relish by Marxist economists and their fellow travellers in the British press. No matter that hundreds of thousands may lose their jobs and we’ll all be hit by higher mortgage payments and depleted pensions (unless you’re lucky enough to work in the public sector, of course) – the doom-mongers jubilantly claim the latest events have at last proved them right. “This is the end of capitalism,” they cry with glee. “The free market model has failed!” And out of the ashes of the collapsed system will rise a glorious proletarian revolution – or at least increased regulation and control by the state of what socialists call “the commanding heights of the economy”. Well perhaps, but I can’t help thinking I’ve heard it all before. In fact the theory that cyclical crises in capitalism will eventually lead to its inevitable collapse has been around a long time – ever since Karl Marx first propounded it in Das Kapital in 1867. As with many fine theories brute reality often finds a way of proving them wrong - and capitalism has shown itself to be remarkably resilient, bouncing back from each crisis to become ever stronger. Even after the Wall Street Crash of 1929 - a disaster that dwarfs today’s problems - it took the US less than 20 years to rebuild the world’s most powerful economy. But if this really is the end of capitalism, we should bid it a fond farewell – because it has benefited ordinary people enormously, creating wealth on a previously unimaginable scale and lifting millions out of destitution. In contrast, wherever a Marxist system has been imposed on the people the invariable results have been repression, murder, famine and economic collapse. Ask yourself this, where would you rather live – in the US, UK or Germany, or in the socialist paradises that are Zimbabwe or North Korea? Would your rather be weeping into your Veuve Clicquot in New York, or boiling up a soup of grass clippings in a vain effort to feed your family in Harare? I suspect the present obsequies for capitalism are premature. No doubt we’re in for a hard few years with a good deal of economic pain. But eventually people will once again want to develop businesses, build houses and create jobs. It is this irrepressible creativity of ordinary people that may just ensure capitalism’s survival.

30.9.08 15:51 Permalink / comment

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