A painfully empty charade - by Richard... Sunday, April 11, 2010

A painfully empty charade - by Richard... Sunday, April 11, 2010

This blog and a a few more have made the point. And latterly, the politicians have been compared with drunks in a karaoke competition. Now, it's Booker's turn to point out, in his columnthe simple fact that none of the politicos and their claquers want to admit, that this election is a painfully empty charade.

With the latest poll putting the Tories only eight percent ahead – 26 seats short of an overall majority – it would appear that there are many people who would agree. Despite his frenetic activity, the Boy Cameron has failed to (so far) to engage with the increasingly disinterested electorate and, according to a poll in The Independent, two-thirds of voters distrust both Labour and the Tories over the deficit

And that is precisely the focus for Booker, who says there are four huge shadows that hang over this "claustrophobic" election. The first is the "barely imaginable scale of the deficit in public spending", increasing at the rate of half a billion a day and set to cost us the equivalent of £60 a week for every household in the land just to pay the interest on the debt.

But what strikes us so forcibly is the utter unreality of the political debate, illustrated last week by the Tories' claim that they could cut spending by £12 billion. That is the amount the debt is risingevery month. Not, of course, that Labour is any better, boasting that it could save half a billion a year by cutting out NHS waste – the amount our debt is increasing every day.

The second shadow over this election is the unprecedented damage done to our politics by the expenses scandal, which has degraded the standing of Parliament to its lowest point in history.

More than anything, says Booker, these revelations have reinforced the realisation that we are ruled by a political class in which the three main parties are blurred indistinguishably together, almost wholly divorced from the concerns of the rest of us. Never have MPs or peers been so diminished in stature, at the very time when the bloated apparatus of the state has been intruding on our lives more obviously than at any time before.

The third, closely related shadow is the still barely understood extent to which the politicians have handed over the running of our country and the making of our laws to that vast and mysterious new system of government centred on Brussels and Strasbourg, all of which is related to the final huge shadow – the
way our politics has become permeated by everything which can be related to global warming.

Having made the points at some little length, Booker notes exactly the same phenomenon to which we have been referring – they way three virtually indistinguishable parties squabble over trivia, leaving the electorate without any clear alternative. His feeling is that on 6 May, almost half the voters may well stay apathetically or sullenly at home.

My great concern is that, as the campaign develops, people will get caught up in the drama and, having focused on quite how awful Labour is, turn to Cameron's not-the-Conservative-party as the antidote. What is so desperately needed is the recognition that choosing between disasters still ends up with a disaster.

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Polish president killed - by Richard... Saturday, April 10, 2010

The Times and many others report that Polish president Lech Kaczynski and his wife Maria were killed in a aircraft crash this morning.

They were on board a flight which crashed at 10.56 Moscow time (0656 GMT) near Smolensk airport. Russian media is reporting that all 132 passengers were killed.

The Kaczynskis, we are told, were travelling with several senior government figures on a trip to mark the 70th anniversary of the Katyn forest massacre, in which thousands of Poles were executed by Soviet secret police.

It is far too early and wholly inappropriate to assess what, if any, are the political implications. Understandably, the Polish peoples are in shock. We can only convey our sympathy.

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Indifference compounded by derision - by Richard...

It says a great deal that the munificent Boy King is prattling about "giving" four million married couples tax breaks worth up to £150 a year, when his party's energy policy is set to cost every couple in the land an average of £600 per year (as a conservative – if I may use that word – estimate).

And that, as Carl Mortished of The Times has suddenly discovered, is precisely the intent of the green-tinged policy. It commits us to more expensive and less efficient energy production for no good reason other than to pander to the climate change obsession, of which the Boy is a prime advocate.

Equally, we see a "shock-horror-probe" sort of response when it is suggested that Tory policies might "cost" 40,000 public sector jobs – when to make any significant inroads into the annual deficit of £160 billion, we should be looking at 400,000 job losses, and then some.

Merely financing that deficit is set to cost every household in the land £60 a week, which again knocks little Cammy's £150 a year for low-middle income married couples into touch.

But this is what is characterising the election campaign – the politicians dancing round the edges of the big issues, making marginal adjustments to marginal policies. That they then expect us to get excited about them is, frankly, an insult to our intelligence. They may think they are dominating the headlines. The actual response is indifference, compounded by derision.

Voting for these educated, arrogant and vacuous fools, says Autonomous Mind, is a vote in favour of slow, inexorable decline, the dramatic extension of the impoverished underclass reliant on the state that is in turn reliant on debt and borrowing, and eventual societal breakdown. Will they talk about this? I guarantee you they won't, he says.

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An epitaph for Greece? - by Richard...

Unwittingly, The Financial Times may have delivered the ultimate epitaph for the foolhardy experiment of allowing Greece into the eurozone.

It comes in its latest analytical offering – of which there has been no shortage – when we are told of the latest developments, with the rider: "This was not how things were supposed to work out." That, most certainly would suffice for the gravestone of a nation.

The situation on which the FT was commenting was the declaration by somebody or other in the EU telling everybody who would listen that the "colleagues" would come dashing to the rescue if need be. Greece would not be allowed to default.

Somehow, though, this message does not seem to have got through to the markets. Nervousness about Athens' public finances, we are told, has contaminated lending in the private sector, with depositors having withdrawn €10 billion from Greek banks.

This is what the FT thinks should not be happening. Greece cannot be forced out of the euro and is unlikely to leave voluntarily so, with the declaration of support, the markets are supposed to rush in and buy up Greek debt.

The reason for this seems to be that the EU – with Germany looming in the foreground – is playing an elaborate game of chicken. It framed its statement of support, says the FT, in terms of a reason why the support would never actually be needed.

Since Greece would not be allowed to fail – so the argument went – there was no need for the market to worry. And as long as the market wasn't worrying, there would be no need for support, and thus no reason to suppose that the support would not be forthcoming, because it wouldn't be needed ... as long as the market wasn't worried.

Worrying, however, is just what the market seems to be doing – manifest in the yields on two-year debt and the cost of credit default swaps, although precisely where they stand is not exactly clear ... different reports seem to be reporting different figures – rather like the Greek government's accounts.

But, as long as Greece is not going to be allowed to fail, and the wish becomes the promise, Germany – which is going to have to produce the dosh to make it not happen if the worst comes to the worst – is insisting that there is no need for a specific plan to keep Greece out of the schtuck ... because Greece is not going to be allowed to fail, and therefore it isn't going to fail.

Strangely, even though it is not going to fail, the European debt markets are still behaving as if the impossible could happen – which, of course, it can't. But since the debt brokers this side of the pond aren't playing ball, Greece is trying to offload debt on the US market, where it is assumed that there are gullible buyers around who are prepared to take a punt.

Unfortunately – for Greece – US investors seem no longer to be relying for their market intelligence on surface mail delivered by the fortnightly steam liner. Thus, the WSJ tells us, they aren't playing ball either. Neither are the Chinese and Japanese investors particularly interested, especially as there are safer options around ... like Russian bonds. It really is that bad.

As a result, the credit rating agency Standard & Poor is marking Greek debt down as BBB+, with a negative outlook. No one knows for sure if there is a ZZZ- category, but it could be that we are about to find out.

Nevertheless, all is not lost. The Guardian is telling us that Greece cannot be allowed to fail. The union cannot afford another failure like that of the now defunct Lisbon agenda, it says. So the member states must step in and do something. Somebody, anybody, must do something. So there ... sorted.

That leaves the New York Times to note that the question facing Europe is no longer whether Athens has the political will to cut spending and raise taxes to curb its gaping budget deficit, but whether Greece will run out of money before it gets the chance to do so.

The money, so to speak, is on Greece running out of money. "This is no longer about liquidity; it's a solvency issue," says Stephen Jen, a former economist at the IMF who is now a strategist at BlueGold Capital Management in London.

But, since German and French banks own over €100 billion in Greek bonds, it is unlikely that Greece will be allowed to fail. Here we go again. According to Yannis Stournaras, an economist and an adviser to previous Socialist governments, all Greece has to do is ask for the money.

Meanwhile, there are a lot of unhappy bunnies in Greece (pictured). They don't seem to be that convinced that Greece cannot fail. Clearly, they have not been told what to think ... nothing can go wrong ... Greece cannot fail.

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