Tag: Financial Times

There can be no compromise

The Financial Times recently headlined warnings from leading economists about the dangers of Brexit. I expected something more forthright when I read the article. They were hedging their bets, not, I imagine, wishing to be caught out when things do not work out quite as they forecast.

The muddle-through-to-a-glorious-future approach has few supporters among economists. But simply muddling through, without the expectation of any glorious future, seems to be a currency shared by many among both economists and the wider population.

For me, and millions like me, opposition goes much deeper, and in the event of any kind of Brexit our opposition to a departure from the EU will remain as virulent as now, until such time as circumstances oblige us to re-establish the connection we have so rashly thrown overboard.

For reasons, as I see them, read on. Feel free to add, or subtract.

historical (1): fly solo at your peril, build don’t tear down alliances – never over-estimate your power or position in the world, or assume that past prestige guarantees future influence – never draw empty parallels, one example being the specious argument that the UK leaving the EU is a re-run of England versus Rome in the 1530s;

historical (2): the bond created over seventy years of peace and cooperation since World War Two isn’t one to be lightly set aside;

political: it may or may not be that, under Trump, a transactional, case-by-case approach to policy will work for the USA, but a smaller country, and the UK is a smaller country, holds few cards – self-interest not charity among partner countries will always prevail – negotiations involve unpalatable trade-offs, a blank slate is no place to start – always build from strong foundations, with plans in place for all eventualities – bluster is no substitute for hard graft;

economic: on what basis could we ever assume that the EU would agree that we can take out (i.e. trade) we do now, without putting back (financially and in other respects) at a level comparable to current levels? – that we can somehow reverse gravity theory and its thesis that our closest neighbours are our best and favoured trading partners? –  that the theory of comparative advantage, whereby we all specialise in those areas where we have advantages not shared by others, could ever deliver other than diminished returns and destruction of existing industries, not least because we would be inviting in tariff-free products from a world which is unlikely to reciprocate?;

philosophical: for many a vote for Brexit was simply a vote for change, a plague on all your houses, but change rarely delivers what we expect, and that applies especially to change as little planned and falsely argued as Brexit – the frequently peddled and spurious notion that there is some kind of a contract between government and governed, which begs the question of what’s in the contract, who wrote it, and who are the ‘people’ – how democracy functions is a fundamental question, see next item, and flawed concepts do not help;

democratic: decisions must be reversible, and are best handled by elected and representative assemblies, referenda being the favoured tool of those who wish to bribe and manipulate, or as happened in the Brexit vote promote a specious ‘free trade’ agenda on the back of hyped-up panic about immigration, that of itself an example of how a critical issue can be radically mis-represented;

humane: rules and regulations exist to protect the working population, not as some would have it for their own sake, and future trade deals will allow minimal change from what we have already have;

humanitarian: we are all citizens of the world, as well as the UK and Europe, by definition, a simple and to my mind ontological truth – what we can bring to the world, not how best we can hide behind borders, should be our focus, and we can drive that worldwide agenda far better through the EU;

environmental: as ‘humanitarian’ above, working together with people in other countries, pushing a climate change agenda, exercising influence on the US and China which we could never do on our own;

judicial: the rule of law must always be above politics, a notion that has been unwisely challenged in some quarters;

sovereignty: we have greater sovereignty as part of a wider body wielding influence in a US/China/EU dominated world, than a supposedly greater say on our own – ‘taking back control’ is a fiction whereby we lose much more than we gain;

demographic: where comes our uniqueness as a nation: from closed borders, from excluding foreigners? – the opposite has always been, and should always be, the case;

influence: why leave the forum through which are influence has been most effectively spread and felt around the world in recent times? – any more than we should leave the United Nations on the grounds of poor performance – we will effect change by working on the inside, rather than gesture politics on the outside;

reform: expanding on the idea of influence, there are vast issues out there in the world which British pragmatism and ingenuity can help solve, but we will do that as insiders, pulling levers, arguing in corners, never by grand-standing;

pragmatism: implicit in all the above, but worth separating out – pragmatism is what has always defined us as a nation, which is why so many beyond these shores are astonished to see so many in our land practising the politics of division – and badmouthing the institution with which they’re negotiating, and yet anticipating a happy outcome … curious indeed;

reputation: why be taken as fools, as we are being already, and risk being taken as greater fools, with our new friends the Republican right, the supporters of Marine Le Pen in France, Matteo Salvini in Italy….

The flag of St George turned into a jingoistic banner cannot be the way forward for this country (for sure, it can’t be for Scotland, or for Northern Ireland, and, despite a majority voting for Brexit, for the population of Wales). With sanity and pragmatism we can avoid fracture now, not least territorial. Without it the battle-lines will remain, and skirmishes and worse continue, for many years to come.

Infrastructure and the Genoa bridge

Infrastructure hasn’t over the years been a topic of too much debate. It simply went on, all around us, yet curiously out of sight. We’d complain, some of us, about HS2 and Hinckley Point, but these are new glamour projects. Not the day to day. The day to day is about detail, hard graft, the invisible – and the maintenance of what we have.

All has been suddenly thrown into a much sharper perspective by last week’s collapse of the Morandi bridge in Genoa. The human cost is terrible, the economic cost (access to Genoa’s port, north-south communication) serious, the political cost (Italians disillusioned with government now even more so – but to whom do they turn?) likely to be high.  Italy’s interior minister blames the Eurozone’s strict rules on budget deficits – but as the Financial Times points out ‘a bigger constraint is the crushing burden of interest payments on Italy’s public debt’, 132% of annual economic output. (Source: Tony Barber, FT 18/19 August.)

Italy is not alone. Germany has bridge issues of its own. Obama’s transportation secretary described the US as ‘one big pothole’. Much of the road network across Britain, once you leave the motorway system, is in a poor state of repair: not dangerous, but a significant impediment to good communication.

(How many other bridges small as well as large on motorways across the developed world are suspect? The Genoa bridge had passed all its tests. I’m reminded of the long-term roadworks on the M5 just south of the M6 junction. You see few workers on the motorway itself: there are 40 or so (notices tell us) out of sight, working below the road surface. That at least is re-assuring.)

Quoting Tony Barber again: in the UK, ‘governments of all political stripes tend to neglect unglamorous small scale infrastructure projects and repair work in favour of ostentatious schemes with predictably spiralling costs.’

HS2 (high speed rail link) is a case in point. Local infrastructure (taking in the north-west, north-east, south, and south-west of England, and Wales and Scotland – HS2 may in twenty years time, with a following wind, just about reach Manchester and Leeds) and high levels of maintenance of existing infrastructure would be a far wiser way to spend money. In the case of Hinckley B (our very own Chinese-financed nuclear power station), funding requirements have trumped political considerations – and reduced our scope for independence and influence in the world.

One other consideration, which Italy’s situation highlights. Massive infrastructure self-evidently requires massive maintenance and repair costs, and that assumes continuing stellar economic performance. Will we need our skyscrapers in fifty (or a hundred) years’ time? Will our road networks be underused, radically underused, as we develop new modes of transport?

We move too fast, too blindly, and that won’t stop any time soon. The Chinese Belt and Road initiative is one guarantee of that. Development is driven as much by political and strategic as well as economic considerations. (One powerful reason why we need to be part of the EU – only that way will we have serious political heft in the world.)

What we can do is hold to the simple truth that infrastructure requires maintenance, and put aside the money in national budgets across the world to ensure that it is carried out to the highest level. That is the imperative now. (Easy to say, immeasurably harder to ensure it happens.) As for the future, we cannot simply rely on continuing high levels of prosperity as a guarantee of the required levels of funding, via taxation and borrowing or private investment.

If we cannot be confident in the long-term maintenance of our infrastructure, then we shouldn’t be building. One day our leaps into the dark will come to haunt us.

Slow investing, slow news

As an advocate of ‘slow news’ it was good to read Tim Harford’s article on ‘slow investing’ in the Weekend FT. He argues that ‘most investors should operate closer to the six-month timescale than to the frenetic fast-twitch world in which a coffee break lasts an eternity’.

Slow news – what do I mean by that? Maybe not six months (though I have tried a month, walking the Camino in Spain) – but always go for the long perspective, avoid the cumulative effect of ‘fast-twitch’ hourly fixes. And treat the big daily bulletins with caution: they’re no more than what takes the news editors’ fancy on any one day.

Likewise investment. Check your portfolio everyday and the pain of the downs tends, according to Harford, to outweigh the joy of the ups. There’s more reason to smile if you check less frequently: good years for investors happen almost three times more often than bad years.

(Check out Delayed Gratification magazine, published by the Slow Journalism Company.)

We obsess with detail. ‘To single out one murder during a battle where there is one person killed very minute would make little sense.’ (Quoted by Harford in his article.) Morally it does of course – we lose sight of the immediacy of violence if we treat the victims as a collective entity. On the other hand, we lose the bigger picture, and we become inured to violence by the endless repetition.

Detail obscures reality. The 2009 expenses scandal was arguably as much a media as a political scandal – a drip-feed of news day-by-day by media owners pursuing their own agenda. The Brexit campaign was (and still is) all about emotive soundbites obscuring the real picture.

I’d originally included comments about the scandal involving Oxfam employees in Haiti, but I’ve taken them down: who knows where truth lies. Enough to say, I’m treating headlines and assertions with caution, and not rushing to judgement.

But should I be making judgements? Slow news can’t be a pretext for disengagement. The zenpolitics blog has always been about engaging directly with the world, and yet maintaining balance. Upekkha in Sanskrit – equaninimity. It’s a tough act.

*

Elsewhere in the FT there an obit of an American cyber-libertarian, one John Perry Barlow. For one, I love the idea of a cyber-libertarian. I’m not certain it’s for me, but I covet the name. He wrote of the death of his fiancée in 1994: ‘All hope has at times seemed unjustified to me. But groundless hope, like unconditional love, is the only kind worth having.’

That strikes a chord. Ride the daily news roundabout, and what hope are we left with? I don’t want to get into arguments about whether the world is getting better or worse. But take hope as watchword, take a long-term view, plan for the long term, avoid the news obsessed doom-mongerers – take hope, even irrational hope, as a watchword, and we will do a damn sight better than over-obsessing with the everyday.

A story about lemmings 

Hard to post anything on the subject of Brexit. Zenpolitics has been quiet for a while. The level of absurdity is too high. Talk of hard or soft as the only alternatives. Business, scientists, economists, all against. Incredulity that it could get this far.

Martin Wolf, in the FT, argues that we’re underperforming against our European partners of similar size, whether we look at increases in GDP, exports or productivity, proof surely that it’s not European regulation that holds us back but something more deep-rooted in British attitudes and industry – attitudes to the wider world, an over-focus on our home territory.

Jeremy Warner in the Telegraph recognises the same infirmities, but imagines that Brexit will somehow shake industry up, that it’s the EU that’s holding us back. Industry needs the shock: the mechanism by which the shock transforms isn’t mentioned.

Divorce is a shock, relationships are soured, couples don’t normally get back together. Could ‘just good friends’ ever be enough?

Companies having to divulge the number of foreign workers, as if by doing so they’d take on any more British workers. (It seems this may not now happen, a step too far, but other measures with the same intent remain under discussion.) A Home Secretary whose past record suggest she knows better, but who falls into line.

And so to the Tory party conference, an assembly of lemmings gleefully finding a cliff and looking to leap over, some in hope of a soft landing, others unconcerned if it’s hard. Maybe a few of the soft landers will live. Maybe not. Theresa May, our turncoat (loyalty to Cameron? closet believer in Brexit all along? serving her own ambitions?) PM, admits there will be bumps in the road. Some road.

The whole process is deeply unedifying. Once the Tories were split between supporters and opponents of the EU. Now the supporters are cowed, MPs looking to save their seats. Defying the logic of history and events. Falling in behind an anti-immigration agenda. Playing along with the racists closet or otherwise in their number. There’s a cowardice, a self-serving mentality about it all. They and we will look back in shame on this example of how mass hysteria can take over a political party. On a press which soaks it all up, and reflects it all back.

As a country we are bigger and better than all this. But Labour is obsessed by internal wranglings, old obsessive loyalties clouding the minds of those who ought to be out there, strident in their arguments. Anti-establishment loyalties on the left encompass the EU as well – anti-capitalist means anti-EU. We turn inward, pay heed to ideologies of left and right, we shuffle nervously, and accept ‘it’s going to happen’. Let Brexit take its course. We will get on with our lives. Phoney war. Nothing’s happening now. The stock exchange is buzzing with revenues taken in a depreciated currency. Because nothing is happening now a hazy logic suggests nothing ever will.

God help us all.