Tuesday, January 29, 2013

Austerity is an outcome not a policy. We need a new language and properly integrated macroeconomic leadership.

I am surprised at the lazy way that politicians and commentators continue to suggest that austerity is a policy not an outcome. It is the latter. No sane leader would wish to impose austerity on his people. But, as in the immediate post war era, at times Macroeconomic realities dictate that there has to be restraint, especially more closely to match government outgoings to government income. A combination of expenditure cuts and tax rises can cause widespread hardship - increased unemployment reduced family purchasing power, and, especially, low or even negative growth. This is a vicious circle within which growth is a casualty of reduced government spending and reduced personal spending which is the direct outcome.

To break the vicious circle the classic Keynesian solution is to increase infrastructure investment. This utilises unused capacity (especially Labour) to create necessary and long-term contributory assets such as roads, railways, power generation capability and the like. Clearly this comes in part from deficit financing - although public/private partnerships can allow a proportion of the capital to come from the private sector, e.g. from Pension Funds. And of course employment is created in the construction phase of the investment which reduces welfare spending and leads, through increased personal consumption, to a return to growth.

We need a new language to describe an integrated Economic policy which matches a measure of fiscal probity with a major emphasis on infrastructure investment. Austerity is not the word! And we need a realistic planning timescale of at least five years during which Government sticks to its plan! The eventual outcome from the restraint (on the one hand) and the post war infrastructure recovery programme (on the other) of the austere 1945-1951 years was positive. More of the same is needed now.

Monday, January 14, 2013

The Netherlands is "Not dissimilar to the UK" say No. 10 Spin Doctors.Ha!

Having lived in The Netherlands for three years, visited frequently, worked extensively with the Dutch and speaking the language I can say that the claim by No. 10 Spin Doctors that the country is "Not dissimilar to the UK" is preposterous.

Lets start with the most material point. The Dutch, are, always have been and always will be enthusiastic Europeans. The European flag flies alongside the Dutch flag on public buildings and there is no political party of any significance (and they have plenty of political parties!) that would even contemplate a "withdrawal from EU" agenda. The Dutch people as a whole see their nation as integrated in Europe and have no problem with the idea. They do not regard their participation all all of Europe's steps towards integration from 1951 onwards with anything but enthusiasm. 

Unlike the United Kingdom The Netherlands has a strongly homogeneous culture. True there are differences - the Catholic south and the Protestant North. The urban centres of Amsterdam, Rotterdam etc. compared with the more rural parts. But generally the Dutch are united by a common language, culture and history. There are no provinces of The Netherlands seeking independence!

While like the UK The Netherlands has an Imperial past Empire was in the end swiftly discarded and there are few hangovers from or sentimentality about the Imperial past. And there is no Dutch equivalent of the "Commonwealth" with its presumptuous proposition that former colonies should stick together under the maternalistic umbrella of a Head of State (and in some cases bizarrely still their Head of State ).

True The Netherlands is a Monarchy but they ride bicycles rather than drive around in Rolls Royces - and the heir to the throne is married to an ArgentinianImagine that in Britain! (I met Willem-Alexander, Prince of Orange at the Olympic Games with his Argentinian wife and children and a very pleasant lot they are indeed. Unpretentious and friendly. Just like Charles and Camilla (not).) 

The Netherlands has had coalition Governments throughout modern times. Their excellent electoral system is strictly proportional which means that there will always be a Coalition  This is unexceptionable and part of the culture and nobody would suggest a better way of running the Country - so they stick with what they have. This includes  of course, a fully elected Upper House (the Eerste Kamer) which represents regional interests and is a logical complement to the 150 seat Lower House. (Tweede Kamer).

The Dutch political spectrum is quite wide but there is no real challenge to a broad social-democratic consensus nor to the welfare state. Dutch self-sufficiency in Energy (Groningen Gas primarily) has been a source of the underpinning of this for forty years or more and provides the economic basis of the State.  Private enterprise is encouraged and Holland is the home of great international companies like Shell and Philips. But this is not ideological and where it is better for the people for an activity to be publicly owned it is. The excellent Dutch Railways, for example, are a private company wholly owned by the State.

Education is of course free at all levels and a consistently high standard is maintained in all schools. There are a few private schools (just as there are a few private hospitals) but the public services are sufficiently good in both cases for there to be no strong reason to choose them.  

The Netherlands was occupied during the Second World war. Dutch Jews were sent by the Nazis to the gas chambers - and the population was starved in the "Hunger Winter  of 1944/5. There is every reason for the Dutch to hate the Germans - and the Spanish and the French for that matter if you go further back. But that is not the Dutch way and they above all nations have been leaders in European integration and their Borders have no gates on them at all. You drive into Belgium or Germany on the Motorway at 100km an hour and you don't need to show any identification  And that was already the case when I lived there 30 years. Like the UK? Don't make me laugh! 


Monday, January 07, 2013

The “Great Britons”

Back in 1972, at the height of promotions on the forecourt, Shell launched a “Great Britons” giveaway at their UK Petrol stations. 20 Postcard size prints could be collected with Shell petrol and kept in an album. The 20 Britons were chosen by the Historian Sir Arthur Bryant. This is who he chose:

  • Alfred the Great
  • Henry VIII
  • Elizabeth I
  • Geoffrey Chaucer
  • Queen Victoria
  • Sir Winston Churchill
  • George Stephenson
  • Sir Edward Elgar
  • Sir Christopher Wren
  • Isambard Kingdom Brunel
  • John Churchill (First Duke of Marlborough)
  • Florence Nightingale
  • Horatio Nelson
  • Captain Cook
  • Oliver Cromwell
  • William Shakespeare
  • Duke of Wellington
  • Scott of the Antarctic
  • Sir Francis Drake
  • Sir Isaac Newton

An interesting list. I don't think Elgar would feature on many such lists although personally I'm delighted to see him there. Other questionable choices are Marlborough and Scott and perhaps Captain Cook. Churchill aside there are no politicians (of the modern sort that is!). But logical choices otherwise ?

Saturday, January 05, 2013

Does David Cameron actually believe in ANYTHING ?

Does David Cameron actually believe in ANYTHING ? I ask this in the context of the line now being peddled by his office that he will be the "Most Eurosceptic PM ever". Put aside for a moment the question as to what the hell this means. And let's also not be too squeamish about the vulgarity of political opportunism - which this stance so obviously is. What I would like to know, and as a citizen I have a right to know, is deep down what sort of Leader we have. Is he Green as once he claimed or does he lean more to Climate change denial as could be the case? Does he believe in Europe and Britain's central place in it (as he is on record as saying) or does he really want to become a Norway or a Switzerland? Does he want to be tender in his approach to the hoodies of this world (he wanted to hug them remember) - or does he want to lock them up and throw away the key.?

All successful politicians are pragmatists - they have to be. But the great ones (small in number perhaps) don't always bow to public opinion or just seek Party advantage. I thought Tony Blair was wrong on Iraq and Afghanistan - but he certainly followed his conscience (disastrously, but he did what he thought was right ). And so, mostly, did Margaret Thatcher. So did Ted Heath on Europe. And Roy Jenkins on social reform. And Harold Macmillan on the withdrawal from Empire. And Winston Churchill on almost everything! These politicians will be remembered for more than looking just at the Focus Group results and acting accordingly. And they will remembered also for not bowing to the trouble-makers in their Parties or putting the specious search for "Party unity" ahead of the National Interest.  Will David Cameron be remembered for anything ? Footnote in History time I think....