The Great Debate UK

from The Great Debate:

Margaret Thatcher, an enlarger of British freedom

My immediate and lasting  memory of Mrs. Thatcher -- Maggie as we called her -- is sitting next to her in the late sixties at a dinner table as she scorched a bunch of City of London financial types. I was astonished. She wasn't yet the Iron Lady. She wasn't  in government. Labour was in power. She was  an obscure back bench Conservative MP, elected only in 1959, noticed in those sexist days (has much changed?) as much for her hats and aggressive hair style as for  her passionate defence of grammar schools under threat of closure from Labour.

What she did with the City of London men  was later characterised as a  "hand-bagging." A black Asprey bag she always carried was metaphorically wielded against people she saw as standing in the way of the greatness of Britain as Boudica, the leader of a British tribe, wielded a lance against the Roman occupiers. I suppose that as a new national editor (of The Sunday Times), and with normal male presumption , I had expected to lead the questioning of the ten or so big names and the table. I didn't stand a chance. Maggie pounded and pummeled them all by herself for an hour. I can't pretend this is verbatim but it went something like this: "All you people are interested in is moving paper around, making money not things. What are you doing for British industry? When are you going to help business stand up to  the unions?"  They murmured, they shuffled, they were outclassed. British elections -- six weeks to  a vote and no paid television ads -- have never been as corrupted by money as much as American, so she was not turning off a potential source of funding as an American candidate would fear to do. Still these were  men -- all men of course  -- who were influential and articulate and used to reverence not rebuke.

Maggie could be seductive in private conversation one on one, more so as she matured,  the strident voice of the public halls giving way to a softer, more seductive style, hand on an arm, intent eye to eye in persuasion. She was afraid of nobody, respecter of no convention she considered archaic. The British custom at dinner parties was always for the host to murmur "coffee?" which was signal for "the ladies" to leave for the powder room while the men, over cigars and port, got down to serious business. It was  a small sensation -- regarded in some circles as a grave breach of etiquette -- when at a dinner party I attended thrown by her egregious confidante Woodrow Wyatt, Maggie stayed in her seat unabashed, uninvited,  and unfazed by the  arguments over the cigars (in this case by a couple of captains of industry who wanted to be part of Europe and she defiantly raised the Union Jack).

The trade unions at the time were busy wreaking havoc on industry. The far left had infiltrated Labour constituencies; Labour candidates were as scared of the militants then as primary Republicans of the Tea Party candidates today.  Local union chiefs called wildcat strikes, disrupted production.  The union movement, with some Labour ministers in support, threatened a closed shop in the press which would have curtailed free speech. I'd spoken out against it as had the  then editor of The Guardian, Alastair Hetherington. At another of those endless London dinners where Maggie  was the speaker and still not in government,  she referred to me as "one of us." I wasn't. I was just expressing a view on an issue. We had many things in common, both from the north, both educated in state schools, both brought up in a grocer's shop, in my case one my mother started, in hers one her father ran. I admired her.  I was one of the millions of voters in the 1979  general election  which put her into power as the first woman prime minister. The country  was in dreadful shape, fearful and anxious during a winter of discontent in which trade union militants blocked cancer patients getting treatment and garbage piled up in  the center of London.

from The Great Debate:

In Venezuela, an election about the future is haunted by the past

Presidential elections will be held in Venezuela on April 14, pitting Hugo Chavez’s vice president and chosen successor, Nicolas Maduro, against Henrique Capriles, the opposition candidate who lost to Chavez in 2012. At stake: whether Chavez’s legacy will continue after his death.

Most analysts see Maduro as the favorite. Many believe the fear of losing the social and economic gains made during the Chavez years will be the most important motivator for voters if Maduro is elected. Others see Maduro gaining from sympathy votes after Chavez’s death. Still others see the electoral timetable as working against the opposition. A short campaign season — two weeks — could favor the government, which has more resources at its disposal. All these perspectives cite recent polling that puts Maduro at about an 18-point advantage over Capriles (see table below).

from The Great Debate:

China as peacemaker

Nuclear escalation on the Korean Peninsula demands creative solutions. With a 2,200-year history of non-aggression, China is in the best position to take the lead — and relieve the United States of a burden it has shouldered for too long.

In fact, no other nation  has had as stable a pattern of world citizenship. Over two millennia, China has not attempted to conquer its neighbors or spread its system of government on any scale remotely comparable to the Romans, Mongols, British, Germans, French, Spanish, Russians, Japanese or even Americans. China does brutally resist the secession of Tibet, which it considers part of its ancient patrimony. But it has not grasped for lands beyond its historical borders.

Cyprus deal means the cat is well and truly out of the bag

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By Laurence Copeland. The opinions expressed are his own.

The German insistence that depositors in Cyprus must face a haircut marks a new and dangerous stage in the interminable death throes of the euro zone. Up to this point, the one unshakeable principle underlying all the bailouts on both sides of the Atlantic since 2008 had seemed to be that the value of bank deposits was sacrosanct, whether they were explicitly insured or not. Now, the cat is well and truly out of the bag. It will be clear from now on, even to the most naïve investor, that there are no longer any totally safe assets. The principle of caveat emptor applies to bank deposits as much as to second-hand cars or beef-burgers. If even deposit insurance is now conditional, the difference between insured and uninsured deposits is only one of degree of risk. It is amazing how calmly the markets have reacted to the new reality, but it would be foolish in the extreme to rely on their continued insouciance.

There are a number of lessons we can learn from the events of the last fortnight, most of which relate more to Germany than to Cyprus.

The great dividing line in British politics

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By Stephen Evans, Director of Employment and Skills at Working Links. The opinions expressed are his own.

Chancellor Osborne’s latest budget may have been good news for beer drinkers, but it highlighted a growing dividing line in British politics that will shape the 2015 general election.

from Anatole Kaletsky:

Even Britain has now abandoned austerity

The Age of Austerity is over. This is not a prediction, but a simple statement of fact. No serious policymaker anywhere in the world is trying to reduce deficits or debt any longer, and all major central banks are happy to finance more government borrowing with printed money. After Japan’s election of Prime Minister Shinzo Abe and the undeclared budgetary ceasefire in Washington that followed President Obama’s victory last year, there were just two significant hold-outs against this trend: Britain and the euro-zone. Now, the fiscal “Austerians” and “sado-monetarists” in both these economies have surrendered, albeit for very different reasons.

Much attention has been focused this week on the chaos in Cyprus. Coming after the Italian election and subsequent easing of Italy’s fiscal conditions, the overriding necessity to keep Cyprus within the euro -- and its military bases and gas supplies outside Russian control -- will almost surely mean another retreat by Germany and the European Central Bank from their excessive austerity demands. But an even more remarkable shift has occurred in Britain. The Cameron government, which embraced fiscal austerity as its main raison d’etre, was suddenly converted to the joys of debt and borrowing in this week’s budget.

from The Great Debate:

‘Post-Communist’ Russia and China remain remarkably the same

For a Russian to live in Beijing is to experience time travel. Things long gone in Russia, or stuffed into kitschy theme bars to draw tourists, still appear in China with no sense of irony. There are endless displays of hammer-and-sickles, Red stars, and exhortations to Obey the Communist Party. There’s the rhetorical deification of the worker and the peasant. “Public-security volunteers,” elderly men and women with red arm-bands and a lot of time on their hands, lounge on little folding stools, sizing up passers-by. There are five-year plans, and front-page headlines screaming “Socialist path reaffirmed”.  I thought I left all of this in the 1980s’ Leningrad. But no, it’s all still here in Beijing, instantly recognizable even behind Chinese characters that give it  a new spin. All of which makes it tempting to think how  Russia and China have changed over the last 20 years.

But in fact the opposite is true: their political systems  remain remarkably similar. Both ditched Communism a while back. The only difference is Russia ditched the trappings while China held onto them. The system that emerged in both places operates with fewer overt ideological constraints but with a singular mission: the self-perpetuation of the ruling elite.

Predictions and wishes for Osborne’s 2013 Budget

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By Nick Hostler, tax expert at BDO. The opinions expressed are his own.

Following the recent loss of the UK’s AAA rating, Chancellor George Osborne will be keen to show real progress and dedication towards eliminating the UK’s structural fiscal deficit, but must balance this with ensuring that the UK is a highly competitive and attractive location for multi-national businesses. The Budget should mark a watershed moment for the coalition government as Osborne, with an eye on the next general election, treads a fine line while demonstrating an understanding of the pressures faced by individuals and businesses across the country.

Whether he strikes this balance remains to be seen, but here is what I believe the Budget will have in store.

Budget day cheer is here again

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By Laurence Copeland. The opinions expressed are his own.

Budget Day again, and the pressure on Chancellor George Osborne is rising ominously. There is little agreement about what needs to be done, but complete agreement that something has to change because the state of Britain’s economy is simply awful.

Yet just look at the facts in the table below (all the data are taken from Eurostat, the EU’s own statistical agency). For the latest quarter, the UK economy contracted by 0.3 percent – but France’s performance was just as dismal, Germany’s economy shrank by twice as much, as did the euro zone as a whole. Only the USA achieved a significantly better outcome, a dazzling growth rate of zero  – but at least it didn’t shrink. Year-on-year (Y-O-Y, as the pros call it), the picture is even clearer. Britain’s economic growth, a miserable 0.3 percent, was not significantly lower than Germany’s, but better than France’s minus-0.3 percent, or indeed the euro zone as a whole, which was down by 0.9 percent. Only the USA grew to any significant extent – and there are signs that it may now be starting to slow down, even before the impact of the fiscal cliff and the sequester are felt.

from The Great Debate:

Why the EU is right on Cyprus

The reaction to this weekend’s European Union bailout deal for Cyprus has gone from initial shock to rather predictable condemnation. “Europe botches another rescue,” ran the headline on an editorial in the Financial Times. “It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying ‘time to stage a run on your banks,’ ” Paul Krugman, the economist and New York Times columnist wrote on his blog.

As widely reported, the deal has an important claw-back component: a one-time tax on the deposits of everyone who has a bank account in Cyprus ‑ Cypriots and foreigners alike ‑ aimed at raising 5.8 billion euros of the total rescue package of 17 billion euros. It’s always possible that the hyper-alarmist scenario of a pan-European bank run actually takes place, although by Monday afternoon, even jittery stock markets across Europe were starting to grow calmer, as EU officials insisted that the Cyprus deal was exceptional.

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