Archive for July, 2008

Labour Party

Sunday, July 27th, 2008
robin Recently, for the first time in the 25 years I have been publishing Lobster, a subscriber wrote and told me he was not renewing his subscription because of something I had published – or, rather, because of some things I had published. He said Lobster had become just another anti-Israeli magazine.
I wasn’t greatly surprised; and, yes, it is true that in the last five years Lobster has been publishing material not so much critical of Israel but interested in and critical of the influence of the Israeli lobby on the Labour Party. Some of the material has been coming from one of my regular contributors – like me a former member of the Labour Party – and some from me.
There has been a considerable Israeli lobby influence on Labour certainly since the days of Harold Wilson, who was very pro-Israel (and wrote a history of Israel when he retired). In his most recent book, Downing Street Diary, Lord Bernard Donoghue, head of Wilson’s policy unit in the 1970s, describes the regular comings and goings of the Israeli ambassador to No 10, and Wilson’s former press secretary, Joe Haines, recounts in his Glimmers of Twilight that he was told by a former head of the Joint Intelligence Committee that the Foreign Office considered Wilson’s private secretary, Marcia Falkender, to be an Israeli agent. So Israeli influence and money within the Labour Party isn’t new. But when money from Jewish businessmen was raised by Lord Levy and given to Blair to run his private office when Blair became leader of the party, the Israeli lobby achieved a new prominence; for their money enabled Blair to become financially independent of the Labour Party. And so Jewish money enabled Blair to form his little clique within the Labour Party and carry on with Mrs Thatcher’s project of destroying it.
A big supporter of the Labour Friends of Israel, Blair has since repaid the money he received by supporting the American invasion of Iraq; and has been repaid, in turn, with his ‘job’ trying to solve the Palestinian-Israeli conflict for ‘the Quartet’. Taking over a floor in the best hotel in Tel Aviv, Blair has been doing . . .  who knows? At any rate he has yet to visit the Palestinian sections of Israel. But this is hardly a surprise, for the one thing a pro-Israeli politician like Blair cannot do is face the reality of Israeli policy. Blair and his ilk are simply unable to acknowledge that the Israelis’ policy is simply and openly to squeeze the Palestinians out of Israel: land seizures, the security wall, blockades of the enclaves etc etc – slow-motion ethnic cleansing: inch-by-inch, steps too small to make it impossible for American politicians to support them; but ethnic cleansing nonetheless. Given that Blair cannot deal with reality, what chance does he have of solving the conflict? Meanwhile the Israelis will continue talking vaguely of the ‘two state’ solution to appear reasonable to ‘international public opinion’ while slowly pushing the Palestinians into the sea.


Tuesday, July 15th, 2008

Robin RamsayAnd so, with barely a flicker of interest from the UK’s economics journalists (page 15 in The Guardian), on Tuesday 14 July the Brown government abandoned the central plank in its economic policy: viz. that the Monetary Policy Committee (MPC) of the Bank of England would keep inflation at or below 2% by using interest rates. On 14 July the governor of the Bank of England announced in the Bank’s annual report that the MPC had not raised interest rates as the inflation rate rose recently because to do so would have required a ‘large increase in interest rates with such a severe impact on output and employment that it would have risked inflation falling well below the target further out.’

The second half of that sentence is pure horseshit – a feeble excuse with which the governor, Mervyn King hopes to persuade commentators not to notice that the policy is kaput. Let us unpack this.

The policy of keeping-inflation-down-with interest-rates worked (when it worked) in two ways: higher interest rates depressed the economy, transferring money from the citizens who had debts to the moneylenders who owned the loans (if more income goes into loan repayments less gets spent on goods), and creating unemployment (the poor spend less). Falling demand pushes down prices through the normal supply and demand market mechanism. Higher interest rates also push the price of imports down because higher interest rates push up the value of sterling and imports get cheaper. (Speculators want to put their money into sterling if it has a higher return that its rivals, such as the dollar and the euro.)

The economists (and the politicians in their thrall, such as G. Brown) like to pretend this is scientific and such, but how much of an interest rate rise will produce this or that much of a reduction in inflation one year? two? down the road is all guess work. They just know that putting up interest rates will eventually reduce price rises in the economy.

In the current situation there is another factor at play. For whatever reason the economists and their politicians have lumped together all price increases as ‘inflation’. In fact this is not true: some price rises, such as the recent increases in world raw material prices are just …..price rises and are beyond the control of this (or any) government. Strictly speaking, inflation is what we get when too much money is chasing too few goods. (Hence the famous dictum of the monetarist economists of the 1970s and 80s that inflation is always a monetary phenomenon; and thus the Thatcher government’s failed attempts to ‘control the money supply’.)

In this society the best recent example of inflation has been the housing market where an uncontrolled frenzy of credit creation has pushed up – inflated – house prices to absurd levels. (Conveniently housing costs are mostly not recorded in the government’s index of consumer prices.) What we have in the world economy now and for the foreseeable future is too many people chasing scare commodities, notably oil and cereals.

The belief that you can control domestic inflation in an increasingly globalised economy solely with domestic interest rates was an absurdity from the getgo and this government was only able to get away with it for so long because the massive expansion of the Chinese and Indian economies flooded the West with cheap goods which kept down the consumer price index, the measure of inflation.(While doing massive damage to Western economies, but hey, that’s the wonder of globalisation!)

Those economies’ demands for raw materials is now putting up prices all over the world, rises in basic commodity prices will cause further price rises in the production/consumption chain and most of us in this country (and all over the world) are going to get poorer; and there is nothing this government can do about it.

And so we arrive at one of the central questions: do messrs. Brown and Darling understand any of this? Did then Chancellor of the Exchequer Brown understand this when he handed over control of interest rates to the Bank of England on his second day in office and abandoned any attempts to control the British economy? Since we have no information on this I can only guess; and my guess would be that having been taught ‘the magic of the market’ nonsense by academics at Harvard in his summer holidays while Shadow Chancellor in the 1990s, Brown really did believe that the bankers had a magic lever they could pull which would control inflation and everything else could be safely left to the market.

(Darling’s views on economics are a blank, as far as I’m concerned. He has written no books or pamphlets on the subject and what he believes – who knows?) Your guess is as good as mine as to the stories they are telling themselves these days as the British economy goes into recession.

I was a premature green . . .

Sunday, July 13th, 2008

I was a premature green. Writing I was ‘a premature something’ is a joke which refers back to the Soviet Communist Party’s attempts before WW2 to control ‘the line’ of its affiliate parties. Thus, most famously, some people who opposed Hitler and Mussolini before the Soviet CP thought it apposite, were described as – or so I believe; I have never tried to check this – ‘premature anti-fascists’.

So: I was a premature green. I was around in the late 1960s when the first green-eco wave took place. I cannot remember how it happened that I came across this material but I bought an expensive hard-backed copy of Paul Ehrlich’s 1970 Population, Resources, Environments and contemplated the end-of-the-world-as-we-know-it. What did I do? Apart from spreading gloomy talk through my first year as an undergraduate and clipping British newspapers for the Sierra Club Bulletin, not very much. What could you do? I started a branch of Friends of the Earth, attended the first meeting and never went back: these were not people I wanted to do anything with; nor did campaigning about recycling bottles seem an appropriate response. And then the UK discovered North Sea oil and with that any possibility of another kind of less consumption-oriented society in this country went out the window for a generation. I was one of a minority of people in this country whose response to a government announcement of future oil from the North Sea was ‘Oh, no.’ When the 1975 referendum on Britain staying in the then EEC took place I voted ‘Yes’ for staying in. Why? Well, as I told Andy Mullen a few years ago, when he was doing a survey on this subject for his book, The British Left’s ‘great debate’ on Europe, it seemed like a good idea to belong to a protein surplus area. (At the time, like almost everyone else in this country, I had no idea of the idiotic Euro-federalist ambitions of the elites running the then EEC.)

Yes, the pessimists in the first green-eco wave got the timing wrong – at least as far as the rich Western world is concerned. The environment hasn’t collapsed at the speed they thought it would. But all those issues are back – and we now have about seven million more people on this island than we did in 1970 (and it is really only this island about which I think or care greatly.)
For the British political system as it is presently constituted, the situation is impossible. Parties are constructed to compete to persuade the electorate that they, rather than their rivals, will make the electorate better off and more content. For the foreseeable future all the economic and environmental news about the world is going to be bad and getting worse. How can this work with the competitive electoral system we have today? A friend of mine, Colin Challen, now a Leeds MP, and a serious-minded campaigner on global warming (his Wiki entry doesn’t quite convey this), recognised this in a recent letter to the Guardian in which he called for the creation of a national government to respond to climate change, citing Churchill’s cabinet in WW2 as an exemplar. It says much about the diminished status of MPs that this striking suggestion raised no response that I noticed. Yet he clearly has a point – if we are serious about carbon emission reduction. A party which proposes to reduce society’s carbon emissions is, willy-nilly, proposing to reduce the living standards of the voters and will lose any election to a party which proposes not to do so (or to do less).

Added to which British society has had 30 years of propaganda telling us that the state is the central problem in society and the free market is the answer to all questions. We have a government of people who have abandoned their belief in the efficacy of the state as a regulator of the free market just in time to discover that they were right the first time: we need the state. And, as things degrade, as the price of life’s essentials – food and fuel – continue to rise, we will need more and more of the state. Selling this to a population the majority of whom have now had a generation of easy credit and are accustomed to living now and paying later (to use the late Jack Trevor Storey’s phrase), who think at least two cars per family and two foreign holidays a year is their minimum due, is only one of the huge items on the agendum which the political system is currently entirely unwilling or unable to deal with.