Do you trust your Politicians?
Sex and Trust
“Male” and “Female” Values in politicians.
A blog about anything and everything…
Individuals, businesses and governments are all moving from the “How can we possibly afford to stop working?” to “How can we possibly afford to start working again?”. Here in the UK, at the daily Press Briefing given by the representatives of government flanked by special health advisors, the awkward questions asked by the press are now including, amongst those on the competency of the UK government to manage the amount of testing required and the supply of personal protection equipment, new and urgent questions on how the government may be starting to envisage how we will restart the economy. There Is some suggestion that the government does not trust us with transparency in this matter for fear we will think its all over and rush back to normal life too soon. Or perhaps they just haven’t got a clue yet…
Largest amongst the issues to be faced is the question of where the money is going to come from and although I am writing from a UK perspective, many of the points will apply across the world. Before I begin, I know I am a day in late posting this challenge piece but in my defense, I only found out about this on the first day of it – those at A to Z 2020 Challenge HQ recently asked the question “Are you a pre-planner or a ‘pantser’?” Necessarily this year I am a seat of the pants writer which at least means that I can react to current circumstances and indeed make them my theme for the challenge. The subject of Money and how we shall find enough to exit the crisis is a big one and needed a lot of research – I have tried to boil it down but there will be links to articles if you want to go deeper.
Many governments and others are referring to the struggle to contain Covid 19 as a “War” because it helps to conjure the spirit that is needed from everyone to “defeat” the tiny, invisible, senseless thing which is a virus. Economists are now starting to talk about the cost of the crisis to our economies, in terms of productivity lost, unemployment created and of course the borrowing which will be necessary to get things started, so my question is, if all the countries in the world are facing the same situation, then who is going to lend money to who in order to fix things.
One precedent is what has happened in actual wars – the World Wars for example. Britain had to borrow a lot of money, mainly from the US or in the case of the Second World War, the US and in a smaller amount, Canada. In 1945 alone, the UK borrowed 4.33 billion dollars and 1.93 billion dollars from Canada the following year. Suffice to say that the total repaid amounted to twice that which was lent and the final repayment was as recent as 2006. We may have a “special relationship” with America, but it does not come cheap. Furthermore, that war helped cement the Dollar as the world’s leading currency and saw US influence consolidated around the world – facts which are still pertinent in the crisis of today. Whilst Britain floundered under the weight of debt and the need to rebuild its shattered economy after the war, America, increasingly obsessed with fighting the spread of Communism, made satellites of the “frontline” countries using the Marshall Plan to rebuild European countries equally shattered economies in exchange for hosting military bases.
There is another way of raising money to fight wars which may become significant in solving our present crisis, the issuing of the enchantingly titled “Gilt Edged Security Bonds” – so-called because the certificates have a gilt edge to them. This is a way of borrowing money from private investors, individuals, pension companies and the like. Invented by the British as early as 1694 when King William III borrowed 1.2 million to fund a war with France, gilts are low yielding in terms of interest paid but they are very safe hence their attraction to pension funds. King William could not raise the money for his war from taxes and neither will governments following the Covid 19 crisis since the money they will be dispersing to help businesses and individuals, needs to be spent on producing and consuming, there would be no point in just taking it back as tax. There is a really good chart of all the ways governments can raise money here, at Positive Money – an organization for monetary reform – more of them later.
The UK Chancellor of the Exchequer, Riki Sunak unveiled a plan for £330 Billion which he described as an intervention in the economy “on a scale unimaginable a few weeks ago”. This is indeed true since the Tory party have predicated their policies on Austerity, beating up the Labour Party for years for their level of the national debt – before running up even higher levels themselves (which they predictably kept quiet about). Austerity is the central plank of neo-Liberalism which will be the subject of my next post – a sort of part II to this one. But meantime, the £330bn is actually government-backed loans – however, the loans will actually be issued by the banks. If the loans are defaulted on, the government will, then, and only then, have to shell out – so not quite as magnanimous as it first appears. There will be further offers of support from the government and some will require the government to borrow, either from the markets or by issuing gilts and of course, the Bank of England can always print money, “quantitative easing”, as they did after the 2008 financial crisis.
The scale of the current crisis in financial terms makes the 2008 financial crisis look small by comparison – we are talking levels of borrowing nearer to that of the war, and our government(s) might be tempted to assert that all this has undone the savings from years of austerity and that we must tighten our belts once again, for the long haul. This is not the only choice and so tomorrow I will look at why austerity is an ideological position and what other choices there are…
Dear Prime Minister Johnson
or may I call you Boris since you are now to be perceived as one of the people,” in it together”? I wish you well on your recovery from Covid 19 and I despise those who have made political capital out of your illness and I wish you no harm as a fellow human being.
Whilst I disagree strongly with decades if not centuries of the policies of your party, I know you are not responsible for all that, but you have willingly picked up the mantle. On a personal level, l am given to understand that your position on Brexit had more to do with seeking the highest office in politics rather than conviction and now you have achieved it. Your personal approval ratings are high as the jolly man who promises to “Get Brexit Done!” But this pandemic means that all bets are off, Brexit almost irrelevant for now except that the benefits of international co-operation have never been more needed or more obvious. Furthermore, now that you have experienced the very best treatment by a National Health Service which your party has done so much to wear down under your plans – to change it into an American for-profit system – I hope you have seen the results of those policies, understaffed, under-resourced, yet offering heroic service to the nation in the present crisis.
I hope when you return to work after the rest which your father has prescribed for you, that you’ll see things in a different light – you may question the wisdom of your earlier judgments. I know you will be surrounded by a cabinet full of the people who still believe in austerity as the default position, the same people who pressured this country into Brexit and they will not be happy to see you turn your ideas around but I beg you to do so for it is not possible for this country or indeed the world to return to things as they were. Do you endorse your stand-in having said, whilst you were ill, that “this is not the time to be thinking of a raise in salaries for nurses.” Surely you of all people must now agree that there can be no better time…
You may wish to emulate the man I understand to be your hero – Winston Churchill – a man who made many errors of judgment in his career before finding his ultimate role as leader of the country in a time of war, much as you are now, However, remember, despite having led us through the war successfully, Churchill was disappointed to lose the election in a landslide to Labour after the war, because the people knew by then, that they were entitled something better and they rejected those who traditionally felt entitled. This is how the Welfare State was born and the time has come for the government to renew the Social Contract and rebuild the Welfare State for the people, or as Labour would have it “For the Many Not the Few”. After your election victory you realized you had to look after the so-called Labour red wall seats or else you might lose at the next election. None of us could have foreseen that this crisis would spring up so quickly on your watch, but here it is – your Churchill moment. How are you going to play it? You have the chance to be an outstanding leader if you dare to take a radical position as the times call for. Or you can just attempt to restore things as they were with the massive gaps between rich and poor. But will you then succeed at the next election with an electorate who have had unlimited time to understand and consider how we got to this place in such a poor state of preparedness and to watch how you manage to deal with the crisis.
Please! Go for blue-sky thinking, out-of-the-box thinking, make judgments based on new criteria, try something different – make no mistake that is what is required in what will be a new world order.
PS Your senior advisor – the self-styled Disruptor, Dominic Cummings – is he the right man for the job now. Breaking things is so much easier than trying to fix them and Covid 19 has surely given him as much disruption as even he could wish for -just saying…
Let us not forget, in this time of distraction, Brexit, pushed by the likes of uber-rich, hedge-fund manager and Member of Parliament Rees-Mogg. His hedge fund no doubt made a huge killing betting on the outcome of Brexit – betting against the good of the country. The European Union is an example of Internationalism – it was set up in the aftermath of the Second World War with the aim, through close cooperation in all areas, trade, education, crime prevention, scientific research, and the freedom of movement for work or simply to live somewhere else. This aspect of the EU was completely ignored by Brexiteers who saw only a body that imposed rules which make it harder for them to exploit society, rules on human rights, on environmental and food standards.
Now, brought together by a greater danger, the Covid 19 pandemic, we are seeing unprecedented international cooperation – at least in the scientific community but whilst we are all distracted, there is a creeping seizure of “emergency” powers by many governments and the question is, will they be relinquished at the end of all this – they are the ones who will decide when it is at an end in any case…
There have been many ridiculous conspiracy theories about the virus and its origins and you may think that these warnings about power-grabs fall into the same league, but if you do take them ln any way, seriously, here is a link to Open Democracy who take these things very seriously and offer a comprehensive list of the implications for democracy around the world.
Sorry to offer more doom and gloom when the virus gives us enough to worry about here in the present, however, we need to think about how things will be on the other side of this pandemic and since the crisis has highlighted many inconvenient truths, the way austerity has run down the heroic National Health Service in Britain – softening it up for privatization US style – the complete and scandalous inadequacy of the “for profit” health service in the US or the way companies have denied the effectiveness of working from home for say, disabled people and which managers are now doing everywhere. People are questioning the way they have been made to live, in all sorts of ways and those on the right are terrified of where it will leave them if the people remember what they have learned including – Internationalism good for solving the crisis- Isolationism (on an International level though very definitely not the personal) bad…
The very excellent enhancement of our democracy http://www.theyworkforyou.com/ allows you to see every time your MP asks a question in Parliament and it also allws you to send emails direct to your MP. In the last election, my constituency of Keighley lost the long standing and excellent Labour MP – Ann Cryer to retirement and instead got Kris Hopkins, Conservative. This is a letter I have sent to him.
Dear Kris Hopkins,
As an ex-army officer I am hoping you will agree that the Trident missile system is a colossal waste of money and that the conventional forces are in much greater need of this financing. At this time of economic crisis it is particularly foolish to pursue funding for a weapon system wholly at odds with the reality of the UK’s latter-day position in the world. Against whom would we conceivably use these weapons notwithstanding the premise of all nuclear deterrents since Their first and only use against Japan – M.A.D. Were Britain ever threatened by an enemy would not our American allies (who are even less likely to get rid of all their nuclear arsenal), defend us? Will we threaten the Russians for hiking the price of gas? Are they of any use against Al Quaeda, wherever they may be? Can they be used as part of wars such as those in Iraq or Afghanistan? Can they contribute to peace keeping interventions such as in Bosnia or our role in Northern Ireland? The answer to all these actual dispositions of our military in recent years is no.
Those dispositions and the issue of Trident raise the whole question of what role the UK and its military have in the world today as well as what we can afford to be. I lived in Ireland (the Republic) for ten years and was most impressed by the steadfast use of the Irish Army purely for peacekeeping roles – something for which they are held in high regard, indeed sought after.This role of neutrality and amed forces only for peacekeeping is so much endorsed by the people of Ireland that it was an important part of the No votes in referendum for the new European treaty. I am aware that Britain still has “interests” around the world that need defending from time to time, but has the time not come when we could drop our memories of worldwide imperial power and adopt a role similar to that of Ireland but bigger and better provided for and with all the excellence of which our forces are capable of?
Yours sincerely,
Andrew Wilson
Last Friday appearance by Tony Blair at the Chilcot Enquiry reminded us all what a slick operator Blair is. I nearly put “questioning by” but “appearance” is more appropriate to what happened if not the defining characteristic of Tony Blair.