Please let it fail - by Richard... Thursday, December 01, 2011

Please let it fail - by Richard... Thursday, December 01, 2011

Jacek Rostowski, Polish finance minister, has called for "extremely forceful" action "to stabilise the markets in a very decisive way". Yet efforts to leverage the eurozone's €440bn rescue fund have fallen short of the €1,000bn goal set by member state leaders in October.

With Italy alone needing €400 billion over the next twelve months, the ECB is being hailed as this week's miracle cure for the euro, even if the ECB seems to have a different opinion on the matter. "Everyone knows what needs to be done to ensure financial stability", says Jean-Claude Juncker, the Eurogroup president, then adding, "I cannot speak, however, on behalf of the European Central Bank, which is very sensitive when people encroach too much on its independence".

Miracle cure number two is the IMF, which is also being slated as the organisation holding the get out of jail free card, although supremo Christine Lagarde denies that she is moving in to bail out Italy and Spain and fears of default there intensify. She dismisses any such talk as "rumours".

Meanwhile, in contrast to our feather-bedded wuzzies in the public sector, striking to protect over-generous pensions and a cushy number that it unaffordable, if we had a chancellor and prime minister with the balls to admit it, Greek workers are striking for real today.

Another general strike is in the offing, with ferries and public transport disrupted, schools closed and state hospitals running with reduced staff.

This comes as eurozone leaders approved the next €8bn tranche of the second bailout, but with money pouring out of the country. Bank deposit outflows reached €13-14 billion euros in the September-October period, an annual jump of about 17 percent in October – and the flow continues unchecked. As fast as the money pours in, it drains away. It certainly isn't helping Greek workers.

The labour situation is somewhat graphically explained by Ilias Iliopoulos, deputy leader of the civil servants' union Aededy. They, he says – speaking of the "colleagues" - are creating a situation that can no longer be tolerated, can no longer be endured. Unfortunately people are in a state of somewhere between poverty and despair.

The measures are supposed to improve the country's financial situation, but the country is getting deeper into debt, unemployment is rising, and the recession - unprecedented in recent times - is worse than anywhere else in Europe. People are falling apart.

And, as reality begins to dawn, British banks and other institutions are being warned to prepare for the collapse of the euro.

There can be no one with any sense who believes that the single currency is now going to survive – it has got to the state where collapse has become the self-fulfilling prophesy. But we still have the charade to go through, with the winter European Council on 8-9 December, as the "colleagues" yet again go through the motions of saving the euro.

But we are back to the Poles, and Polish foreign minister, Radoslaw Sikorski speaking in Berlin yesterday. "The biggest threat to the security and prosperity of Poland today would be the collapse of the eurozone, " he says. "And I demand of Germany that, for your sake and for ours, you help it (the eurozone) survive and prosper. You know full well that nobody else can do it".

Therein lies the problem. Nobody else can do it. But Germany can't either. Thus, the next few weeks are regarded as a critical moment in European history. Not for the first time we wish the "colleagues" would get a move on and let it fail. Please let it fail.

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Referendum times - by Richard... Wednesday, November 30, 2011

Much has been made of Merkel's difficulties in financing EU bailouts, with the intervention of the German constitutional court. Ambrose Evans-Pritchard has been hot on the case, reporting how the court is blocking further moves to surrender fiscal powers to the EU, on the back of a judgement in early September.

However, very much in the character of a mountain meeting an immovable object, there was a whisper, mid-month that Merkel was looking to overhaul the German constitution, with a view to emasculating the powers of the constitutional court.

This story is now gathering momentum, if not substance, with a further report in Speigel, suggesting that the court is at risk of losing its jurisdiction over European issues.

The federal government and the court, we are told, are locked in one of their biggest power struggles to date. One judge at the court has described it as a "latent constitutional crisis." The government, he says, is trying to free itself of the restraints imposed on it by the constitution, and by the court.

The president of the court, Andreas Vosskühle, has expressed it a little more cautiously. The perception of his court is at present, he said "ambivalent in parts", thus leaving open the tantalising question of how serious this challenge actually is.

The process entails transferring more sovereign rights to the EU - and it would mean amending Germany's constitution. This could either be accomplished under Article 23, requiring a two-thirds majority in Germany's federal parliament, the Bundestag, as well as the Bundesrat - or, as a more challenging alternative, under Article 146 of the constitution.

Article 146 is a tool that allows for the drafting of a new constitution following a national referendum, and it is this which is thought necessary to achieve the necessary changes, especially as the constitutional judges in Karlsruhe have now made it clear on a number of occasions that the constitution leaves little leeway to relinquish more power to Brussels.

At present, there is no firm idea when this article might be invoked, although some are talking of a referendum in the autumn of 2013. By that time, of course, it will be questionable as to whether there will be a euro worth saving, which is the whole purpose of the exercise.

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Campbell at Leveson - by Richard...

Whatever you might think of Alastair Campbell, his evidence to the Leveson Inquiry is compelling stuff. Much of what he writes, in fact, has been expressed on this blog, to the extent that there is a remarkable degree of agreement at what constitutes a deterioration in the quality of the press, and the reasons for it.

And, in expressing his view of the press, Campbell then goes on to express sentiments with which we could only concur.

Despite what the UK press has become, he says, I believe in a free press as a cornerstone of a healthy, vibrant democracy. Newspapers must always poke around in the affairs of the rich and powerful. They help hold authority to account. They should always be difficult, challenging, suspicious of power. They must always take risks and push hard for the truth. They must be free to criticise, mock and expose.

Of his many observations in 55 pages (double-spaced) of witness statement, he tells us that the centre of gravity in our press has moved to a bad place; the combined forces, of technological change, intense competition, an obsession with celebrity, a culture of negativity, and amorality among some of the industry's leaders and practitioners have accelerated a downmarket trend, and accelerated too the sense of desperation in the pursuit of stories.

Speed now comes ahead of accuracy, impact comes ahead of fairness, and in parts of the press anything goes to get the story first. Whilst a free press should always be fought for, he says, the impact upon our culture and our public life of what the press in Britain has become has a large debit side alongside the credit that freedom brings.

Campbell thus asserts that news values have deteriorated to the extent that whether something is true counts for less than whether it makes a good story. There is, he says, a culture of negativity in which the prominence and weight given to coverage is not proportionate to the significance or newsworthiness of the matter being reported, but whether it fits the agenda of the outlet., and particularly whether it is damaging to the target of the organisation.

Alongside all this, news and comment have fused, which makes it harder and harder for the public to establish where fact ends and comment begins. This is particularly prevalent in those newspapers - now the majority - which have an agenda, political or otherwise, and who often make their impact by relentlessly pursuing their campaigns, using news as well as comment columns to paint a wholly one-sided picture of an issue or personality.

Once again, this is not new, as anyone who worked for media moguls of the past will testify. But the acceleration of the trend has been clear, as newspapers have relied more on front page impact campaigns and manufactured news, less on hard news in the traditional sense.

There is an interesting paradox that while we have more media space than ever, complaint about the lack of healthy debate has rarely been louder. Fewer stories and issues are being addressed in real depth in a way that engages large audiences; there has been a decline in evidence-based reporting; and despite the explosion in outlets, there are very few days in which there is not a single homogenous theme or talking point dominating the vast output.

When newspapers defend themselves and their role in society, however, they tend to rely on their reputation of investigative journalism, citing great investigations like the Thalidomide scandal as the kind .of story they are in business for.

But, says Campbell, the fact we still talk and hear so much of it underlines how few great investigations there have been amid the millions of stories since. The time, energy and resources available to journalists go primarily towards the instant hits and the celebrity exposes, so that real serious investigative journalism such as is represented by Watergate and Thalidomide is actually under threat. That too is the responsibility of those who now lead the industry and edit its papers.

Campbell thus does not believe Britain gets the media we deserve. The press, at a cultural level, he says, has got itself into a position where it thinks only negativity sells, and where the ferocity of competition has led to a decline in standards. The combination has been corrosive.

The principle of the freedom of the press is always worth fighting for, he says. The quality of that freedom however is questionable when the quality of so much journalism is so low, and when so few people - just a handful of men until now seemingly unaccountable to anyone but themselves and to anything but their own commercial and political interests - have so much say over the tone and nature of public discourse, and so much responsibility for the decline in standards. It is also worth fighting therefore - politicians, journalists and public alike – to change the press we have.

To sum up, in his experience of over a decade dealing with the political media, he claims that exaggeration, embellishment and pure invention are endemic, and are tolerated and indeed encouraged by some editors and senior executives

But all this comes at a price. The public, Campbell claims, are smart enough to recognise overblown nonsense and hype, and the decline of newspapers has been hastened by people's weariness and frustration at the lack of any sense of proportion or balance in what the papers offer.

So people are going elsewhere to find information they trust, he says. The rise in social networks is in part based on the concept of 'friends' - we do not believe politicians as we used to; we do not believe the media; we do not believe business and other vested interests; we believe each other, friends and family, those we know.

In the final analysis, this blog exists in its current form because of the failures of the media, about which we have been voluble. We do not believe the media – much of what it says, and spend much time and effort trying to overcome those failures.

The reason we do so is that, as Campbell asserts, a free press as a cornerstone of a healthy, vibrant democracy. And if the press no longer does its job – and it so clearly does not – then someone has to. I take pride in my work, and greater pride that there are so many other bloggers – free spirits all – who are prepared to do the same thing.

Campbell seems pessimistic about whether the press can be improved, and looks to the Leveson Inquiry to recommend changes. But like so many "above the line" figures whose main experience of blogging is Guido Fawkes, he does not understand the degree to which serious bloggers are beginning to fill the political vacuum.

Our weekly hit rate would now be quite sufficient to sustain a respectable political magazine, and our output over a week would easily fill one. Campbell may complain, therefore, and Leveson in the fullness of time, may proclaim. But we are already there, filling the gap.

What Campbell offers is too little, too late. The MSM, I believe, have gone too far down the road to be recoverable. Too many of those that inhabit it simply have not the skills, knowledge or capability to do better than they are already doing. The people have shrunk to fit the media they serve.

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Danger, experts at large - by Richard...

Created in 2010 "to provide independent and authoritative analysis of the UK's public finances", the Office for Budget Responsibility (OBR) has supposedly been George Osborne's secret weapon, keeping him in touch with what is happening in the real world.

There is no doubt the man-child needs such a facility, with 21 percent of his less than adoring public marking him down as "out of touch". However, as The Independent helpfully points out, the OBR has problems of its own.

Its main task, supposedly, is to provide Osborne with independent estimates of growth, upon which the chancellor can base his fiscal policy. But it is here, in its short life, its performance has been somewhat lacklustre. It has now had to downgrade its growth estimates four times. The latest came with yesterday's Economic and Fiscal Outlook, published alongside Osborne's Autumn Statement.

At least though, the OBR points out its own shortcomings (chart above), where its June 2010 forecast for growth was 2.8 percent of GDP, when the outturn was actually 1.7 percent – an error of over 40 percent.

This, however, pales into insignificance against the forecast for private consumption, the OBR putting it at 0.9 percent growth as against an actual shrinkage of 0.5 percent, an error of over 150 percent.

Similarly error-strewn was the OBR's prediction for government consumption, suggesting a drop of 0.2 percent against an actual increase of 0.5 percent – a whacking 350 percent error.

Excusing its own piss poor performance, the OBR says that higher than expected inflation was the culprit. High prices reduced real incomes and dissuaded people from shopping. And businesses did not invest, according to the OBR, because the public weren't spending.

As to whether this is convincing, The Independent agrees that high inflation is unlikely to have helped the economy, but notes that the experts in the OBR didn't even consider the possibility that the Chancellor's own pledges of draconian austerity last year might have helped to undermine consumer confidence.

On the issue of government consumption, one only had to see the unabated flow of non-jobs, the rush of over-generous salaries, and the continued public sector profligacy, to realise that any idea of a reduction was pie in the sky.

But if the experts can't see these things coming, when most bloggers and even MSM sources could, one wonders why we have the OBR to waste our time and money. And if this is what Osborne is relying on, no wonder he is out of touch.

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