Monday, 6 October 2008

The problem with New Labour is that they do not regulate enough

Schardenfraud is a nasty trait, and yet it was hard to avoid enjoying the experience when Sarah Palin got caught out in a high profile interview recently.
The question she was asked was about specific actions that John McCain took to tighten regulations to prevent irresponsibility in the financial markets. The only way she could have answered the question is to not answer and quickly move on to another point and make the interviewer ask questions on that instead. No doubt some politicians can do it, and it is one thing to have the skill to do it, but the fact remains that the question is unanswered.
The reality is that the economic orthodoxy built up since the 1980s is one based on free market ideology, of which deregulation was a fundamental component.
First it was the political right that believed in it, then powerful forces on what was previously the left, and in the UK it is Liberals who have joined the concensus. Indeed many now argue that Liberalism is now defined by this free market ideology.
Now of course this ideology faces a major challenge. It seems so obvious now. Economic growth has been strong because of the bubble in the housing market. Housing in itself does not generate wealth, so it was bound to be unsustainable.
So now we are in a downturn, which we are assured by free market ideologues will not last long.
However if we have learnt the lessons from the housing bubble and we decide to regulate the market to stop this from happening again, then where is growth going to come from in the future?
Vince Cable is absolutely right to point out that he had been warning about debt for years. Some of his colleagues appeared not to take heed however. At a fringe meeting at Lib Dem conference Jeremy Browne argued, incredibly, that as he believes in markets then he was sceptical about nationalising any banks, even in the emergencies that we have today. He also said that although he bought a house with a very expensive mortgage, he was not worried about a slump in the housing market.
However it is not just debt, it is lack of regulation that causes debt. What has Vince said about that prior to 2008? If someone interviewed me and asked me this question, I for one would have a Sarah Palin moment.
What I do recall is a fringe meeting a couple of years ago at a Lib Dem conference where Ed Davey told us how he was going to deregulate further in the financial markets. He seemed very proud of this policy at the time. Personally I was horrified.
Of course I am sure it is possible to look back at the archives and find in the small print suggestions that might imply greater regulation. Given that Vince correctly identified the level of debt as a major flaw of New labour's economic record, I am sure Vince had a good set of policies to deal with it.
However greater regulation was never the headline solution as it has suddenly become, and the free market ideology had been encouraged within the Liberal Democrats, gaining a momentum where there is now a significant fundamentalist fringe within the party.
That fringe simply has no answers to the economic problems we are facing today. No one knows what the solution is to the economic downturn we are now heading into, but even George Bush is being forced to accept that "more of the same" free market ideology is the last thing we need to turn things round.
However Keynes once warned;
The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.
That is the problem the Liberal Democrats now face. Can they adjust their thinking quickly enough to account for the new realities?
These 2 links are the best articles I have read so far on the crises we now face;

Sunday, 5 October 2008

Should we make a deal with the Taliban and pull out of Afghanistan?

Some parts of the Middle East, notably parts of Iraq and Afghanistan are too dangerous for reporters to venture, so we do not really know what is going on.
So from time to time, we are told that things are going well in Afghanstan. Prince Harry loves it out there. He would far rather be there than at home, he said on a TV interview.
But consider this. Our troops have been there for nearly 7 years, and although by now they should have started leaving, in fact we are putting more in. This is a sign of it NOT working.
And now Brig Mark Carleton-Smith has confirmed what we suspected. We are wasting money, lives and resource out there. We are causing more ham than good. We should settle with the Taliban and leave.
If we could do better, then why have we not already done better?
I went to a fringe meeting at Lib Dem conference last month where Paddy Ashdown presented his solution to the problem. It was good to see that he has taken on the lesson learnt from Iraq, he gave a very realistic analysis of the country I thought.
As for his solutions, I would say that most of the pieces fitted, but some did not.
I asked him how he expected local people to "defeat" the Taliban. He clarified that his view of them was more nuanced, and only some parts of the Taliban should be defeated. He then said that we had been in Northern Ireland for 35 years, implying that is how long it might take in Afghanistan. If that really is a timescale you are considering, I would suggest you do not have a viable plan. Northern Ireland, and within it the IRA was a much smaller scale problem in a culturelly similar country.
If it took 35 years there, I dread to think about Afghanistan. 35 years really means no idea how long it will take.
So I was not persuaded by that. Many of the peices in the plan fitted. But for the plan to work, the most important pieces must fit, and I do not think they do.
There is a price to pay either way. There are 3 main objections to the Taliban;
1/ They raise money by selling drugs
2/ They might habour Al Qaeda again.
3/ From a Liberal point of view, we loathe them because of their human rights abuses.
My solution does not fix these problems. But then neither does anyone elses. Having to make this choice is indicative of how the power of the West has seeped away...

There is no perfect solution. Withdrawing our troops is the least worst solution.

March against child poverty

I congregated with a group of Lib Dems recently to go on a march against child poverty organised by the Child Poverty Action Group.
Nick Clegg is determined that the Liberal Democrats have a high profile on this issue. It was a dominant theme at our last conference with lots of fringe meetings. Martin Narey of CPAG had a high profile at conference and is helping the party develop our policies on this theme.
So I was delighted to see Nick Clegg join the march. I may not be his favourite activist given my opposition to some of his policies, but I was happy to help out holding a banner as background to his photos.
Demonstrations have changed over the years. These days the London School of Samba come along with there drums, and you can put on a special costume and have a dance! I remember the times when it was more serious and if you did anything like that then you were a wierdo and you had to go to the back of the demo. Well it is better the way it is now.
The title was "Keep the Promise". Will Labour stick to it's pledge to eliminate child poverty by 2020? We will probably never know of course. The hardest thing is keeping on track with child poverty when we have serious fuel and food inflation, an economy about to go into recession, and ever worsening public finances.
Despite the gloomy prognosis, we will remain one of the richest countries in the world, so there isn't really any excuse. It is a matter of priorities.
Combatting child poverty should be priority over replacing Trident and ighting an unwinable war in Iraq. But there is a lot more to those arguments of course...