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The Appalling Arrogance of the Libertarian Right

June 5th, 2010 by The Parallax Brief

An instructive few paragraphs from the Adam Smith Institute blog this morning:

During the question and answer session that followed his Adam Smith Lecture on Thursday, Irwin Stelzer was asked what he would do about the NHS. His response was interesting.

Although he was strongly opposed to President Obama’s socialization of healthcare in the United States’, he didn’t see much point in attacking the NHS in Britain. It is too much of a national icon to be tackled head-on, and has a ‘social solidarity’ effect that many Brits are deeply attached to, he said. Instead, you need to nibble away at the edges.

His main suggestion was that we accelerate the process that started in 1951, when Hugh Gaitskell introduced charges for prescriptions, dental care, and spectacles. In short, we should gradually introduce user payments throughout the health system, increasing them over time so as to rely more on direct payment and less on tax revenue.

This is a sensible idea…

In effect, the real libertarian hard right want to destroy the NHS, but they can’t because it’s actually a genuinely popular concept with that awkward and unfortunate stumbling block, ‘the People’. So, since they’ll never gain a democratic mandate to destroy it, they advise nibbling away at its edges, to undermine it slowly until the whole edifice collapses or at least ceases to be what it once was.

The Parallax Brief is certainly in favour of public service reform, including the NHS. And perhaps there is a good case for introducing greater charges into the system. But that’s not the point. What rankles is the pernicious scheming combined with the appalling arrogance of believing that they, the uber-mensch, know what’s best for the bovine masses.

It’s just the kind of fundamentally anti-democratic strategy that a real libertarian would fight against.

But it probably exposes the truth behind much of the so-called libertarian movement.

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F-35 Lightning: The Weapon the Royal Navy’s New Aircraft Carriers REALLY Need to Fear?

May 22nd, 2010 by The Parallax Brief

As the strategic defence review initiated by the new government gets underway, big-ticket military purchases will come under microscopic scrutiny. Trident replacement has thus far garnered the most press coverage, mainly because the two political parties have diametrically opposed, and probably irreconcilable, views on the matter.

However, next in line will surely be the plan to build two new aircraft carriers for the Royal Navy, the HMS Queen Elizabeth II and the HMS Prince of Wales.

The current estimated cost of the two carriers has already increased from GBP2.9 billion, to GBP 3.9 billion, to the recent estimate of an eye watering GBP5 billion. And you can bet it won’t stop its inexorable rise upwards there.

Surely this presents an inviting target for cost savings.

One area of this that hasn’t really been discussed by the mainstream British press thus far is that, as aircraft carriers, these things need fighter jets to fly from them. Currently, the plan is for the USD90 million-a-pop F35 Lightning, built by Lockheed and funded by an international consortium, including Britan, Norway, Italy, Turkey, Denmark, the Netherlands, Australia and others, to fill that role.

But all is not well with the F-35. In fact, that’s an understatement.

Conceived as a cheaper and more flexible version of the super-duper F-22 Raptor, the F-35 was a plane designed to replace a plethora of current aircraft — as various as the close troop support, tank-busting A-10 (sometimes better known as “the Warthog”), Harrier jump jet (with vertical take off and landing capabilities), and F/A 18 Super Hornets, which currently fly from the US Nimitz class ships — and to be stealthy and cheap as well.

But the project is already two years behind schedule, costs are spiralling, and the plane itself simply isn’t working as advertised.

Meantime, America’s congress, for whom the Defence budget is the pork barrel to end all pork barrels, has just passed a USD485 million amendment to the defence bill to build a second, competing engine for the F-35, a measure which (more…)

Stick a Fork in the Eurozone — It’s Done

May 20th, 2010 by The Parallax Brief

A strange thing is happening in the British media at the moment. Papers and commentators are dutifully recording the violent financial and economic earthquake currently rocking the Eurozone, but are not taking their reports to their logical and obvious conclusion.

The Parallax Brief doesn’t mean to say they’re hiding anything in order to further a pro-European agenda — they’re not. But it’s as if they are assiduously chronicling the advance of the Visigoths while not saying what they’re clearly going to do to Rome when they get there.

And make no mistake: the EU is about to be sacked.

Whatever anyone argues, the Parallax Brief simply does not understand how the periphery will be able to regain the 20-30% of competitiveness relative to Germany they need to right their economies. It would be bad enough if Germany was inflating and consuming; but it’s not – it’s deflating, too, which is how its corporatist, wage-bargaining economic system works.

And the ECB isn’t helping. Every euro spent on purchasing sovereign bonds in this bailout package is currently being sterilized back out of the money supply as part of the Bundesbank’s barbarous insistence on deflationary orthodoxy.

This is as textbook a case of the type of debt-deflation that took the world from sharp recession to Great Depression as any hypothetical an economics lecturer could conjure.

Not to mention the percentage of GDP the periphery will be they’ll be paying back to foreign nations to service and pay down their debt: Simon Johnson, the former Chief Economist at the IMF, wrote that, “By 2012 we estimate Greece’s debt/GDP ratio will rise from 114% of GDP to over 150%. The interest payments alone on this would amount to 9% of (more…)

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Cameron’s Pearl Harbor: Government Declares War on the Legislative with Sneak Attack on the 1922 Committee

May 19th, 2010 by The Parallax Brief

The Parallax Brief has been more than a little concerned about both the practical and moral impact of introducing a 55% super-majority requirement for votes to dissolve parliament. On the former, the practical implications, he feels that in a deadlock situation, Parliament would be faced with a choice between California-style legislative constipation, and all the consequences which go with that, or opaque political horse trading. Either would be indecorous and dangerous, and are cast in stark contrast to our current system, which elegantly and brilliantly allows for a swift dissolution of Parliament so the people can break the deadlock with a new election.

On the latter, the moral aspect, it is a fundamentally undemocratic process which, when combined with the effect of a coalition on Lords voting dynamics, strengthens the executive even further at the expense of the legislative.

But the potentially fragile coalition must be preserved. Potential enemies must be knocked out before battle even commences. Enter Admiral Yamomoto stage left.

David Cameron has today launched a sneak attack on the 1922 Committee, the voice of Conservative backbench MPs and the bulwark of the Conservative Party’s legislative resistance against the executive.

In what James Forsyth, the editor of the Spectator, calls, “a move of breath-taking audacity,” the Prime Minister will attempt to bounce a vote through the 1922 Committee on whether ministers, that is, MPs on the Government payroll, will be allowed to become full voting members in the 1922 Committee.

This, if voted through, would remove much of the 1922 Committee’s independence, preventing it from being the thorn in David Cameron’s side in the way it has been for Prime Ministers of Christmas past.

If the vote is passed, it would leave the legislative, that is Members of Parliament not in the Government from both sides of the House, with far, far less power, and, combined with the proposed reforms on fixed terms, the impact a coalition has on voting dynamics in the Lords, the decision to install Lib Dem and Tory loyalists in the Lords, and the 55% dissolution super-majority, would continue the process which started under Thatcher and continued right through to Brown: centralising power with the executive.

The contrast to Nick Clegg’s lofty words and admirable program for governance is stark.

The contrast to the Liberal Democrat and Tory manifestos is even worse.

Seriously concerned.

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Why Are the Lib Dems Sleepwalking into Irrelevancy?

May 19th, 2010 by The Parallax Brief

A couple of days ago, the Parallax Brief blogged that Nick Clegg was walking the Lib Dems into irrelevancy by supporting the 55% super-majority proposal: the number has not been plucked from thin air, or based on any legal, constitutional or moral precedent or logic, but picked specifically because the Lib Dems could only muster 53% of the vote if they wanted to exit the government and bring down, say, a budget.

Lord Falconer agrees, and adds some interesting colour to the Upper House end of this concerning constitutional stitch up:

Before the coalition the Lords, if persuaded that the 55% proposal was the worst sort of constitutional gerrymandering, would have voted the proposal down…

But the chances of the Lords voting the measure down are much reduced with two of the three parties in coalition, making a built-in majority. At the end of last month, there were 704 members of the Lords (excluding those on leave of absence or barred from sitting through holding high judicial office), made up of 211 Labour, 188 Conservative, 72 Lib Dems, 182 crossbenchers, 25 bishops and 26 others.

On almost all issues, because many do not attend regularly and crossbenchers and bishops never vote as a block, the coalition can ensure victory with 180 votes. On a great constitutional issue it would be possible to defeat the coalition only with significant defections. So in the years of the coalition, the house of parliament that has been able to stand up against a whipped Commons will be gravely weakened as a scrutiniser of the executive.

In pursuit of their aim of proportionality in the Lords, the coalition is going to create 100 peers for coalition parties – no doubt selected for their loyalty, and no doubt ensuring that the 55% proposal gets through. These peers will have the effect of ensuring not just that the Lords is weakened as an independent force, but that the hold of the executive on it will be near complete. We will retreat to the late 1950s when the Lords, totally in the hands of the Tories, with the Tory government down the corridor, hardly had a vote from one year to the next.

Nick Clegg’s legislative program, including a great repeal bill, increased protection of civil liberties, the abolition of some of the more ominous Labour programs, like ID cards, and asking members of the public which Acts of Parliament they would like repealed, should be applauded. But he seems intent on moving in the opposite direction when it comes to Parliamentary procedure.

Britain has blurred separation of powers — and even then backed by a constitution that relies on nothing but tradition, good will and precedent. But the strengthening of the executive and centralisation of government authority and power under successive governments from Thatcher to Brown shows what a sham it all is. And the 55% proposal seems to take matters even further: the Commons will be as much in the hands of the whips as ever — which the Parallax Brief suspects is more than at any other point in history — only now the executive could remain in power even without a majority. Meantime, the Lords will be neutered as a scrutinising body, having had extracted its few remaining teeth.

It’s a recipe for one of the most authoritarian, executive-focussed systems in the free world.

Even more bizarrely, the party with the most to loose in this arrangement is the Lib Dems, and both they and the Conservatives campaigned on a platform of taking Parliament from under the jackboot of the executive and making MPs more independent.

What’s happening?


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55% the Road to Lib Dem Serfdom

May 13th, 2010 by The Parallax Brief

Amid his quiet savaging of the Government’s plan to introduce a 55% threshold for votes of no confidence, Tom Harris, the Labour MP, asks the question,

“But why 55 per cent, you may well ask? Why not 51, or 54 or 58 or 65…? Why not lower than the current threshold? After all, the new government has a majority of about 70. The answer, of course, is that it shouldn’t be changed at all. Voters understand what’s fair and what’s not, and they know that if, in any vote in the Commons, one side gets more support than the other – even if only by one vote – then that’s the side that wins.”

That’s true, but the Parallax Brief is pretty certain it’s not the answer to the question. The answer is, of course, a simple case of maths. There are now 344 non-Conservative MPs sitting in Parliament, or 52%. Becoming clear yet? Requiring votes of no confidence to have 55% ayes to carry does what democracy didn’t: gives the Tories a majority on the important votes. Which gets us back to Mr. Harris’s point, that for all the campaign promises of returning freedoms and rolling back state encroachment on liberty, the Conservatives hope one of their very first acts of government will be to pass a law which is frighteningly undemocratic. And the maths exposes the naked expediency of the move: there is no reasoning behind this other than to set the figure just high enough to give the Tories exactly what they need right now.

It’s shabby opportunism like this that makes the Parallax Brief reconsider against his instinctive scepticism the case for a written constitution.

The British system works on goodwill and trust, and in such a system tyranny is never too far away. Especially with the an attitude like this. Voters didn’t give you what you wanted? Fine, just get it anyway through the legislative process. Worry not that this then actually becomes the constitution. Carpe Diem.

Terrifying!

To be fair, the right wing press and blogosphere have cast aside loyalties to attack the proposal. They’re not as incandescent with Hayekian righteousness as they’d have been if this had been proposed by Gordon Brown, but they’ve been swift into battle, and for that should be applauded.

But one group which seems strangely unaware of the affect this will have on it is the Lib Dems. Don’t they see that this vote would allow the Conservatives to render them impotent in the most crucial votes?

Let’s say the Liberal Democrats simply can’t support a George Osborne budget. Perhaps it savages spending on public services and whacks up VAT while cutting inheritance tax and setting aside GBP50 billion or so for Trident. Under the current system, the Lib Dems could bring down the budget and follow it by bringing down the government and letting the People break the deadlock. But with the 55% rule they simply couldn’t. They would need 357 votes, when all they could muster, with Labour, the Nats, and the others combined, is 344.

Checkmate.

Has the Parallax Brief missed something, or is Nick Clegg a rare case of a frog that can’t tell he’s being boiled even when the water is heated incredibly quickly?

The Last Temptation of Clegg

May 12th, 2010 by The Parallax Brief

Nick Clegg tempted by Dark LordWhat an extraordinary, alien, indecorous and absolutely thrilling few days of British politics. But what if it wasn’t real? What if it was just the parting masterstroke of a dying government?

The Parallax Brief wonders.

Gordon Brown’s first resignation of recent days, the one in which he removed himself as the main road block preventing negotiations between Labour and the Liberal Democrats, was certainly audacious. But the Parallax Brief certainly doesn’t buy the received history already created by the talking-heads consensus that it was nothing but a desperate Labour attempt to cling onto power scuppered only by a truculent Balls here and a cozy Clegg-Cameron relationship there.

Consider the evidence.

Labour-connected hack Polly Toynbee wrote that Labour MPs are secretly relieved to be out of power. This surely makes sense. They must know they’ve given the Tories the mother of all hospital passes; pushed the poison pill so far down the throat of the Treasury that whichever party has to swallow the spending cuts and tax hikes is bound to suffer appallingly.

Further, Labour also knows that it’s going to have to select a new leader. In the end Mr Brown was as unpopular in the Parliamentary Labour Party as he was with the country. Even in victory, it’s unlikely he would have survived a full term. Far easier to hold a leadership election from the Opposition benches.

After avoiding the electoral massacre many feared (remember the horror stories of late last year of Labour people panicked about returning fewer than 200 seats?) it would surely be surprising Labour wasn’t far happier to hand over power and take the time to reshape their party, chose a new leader, replenish their empty coffers and attack the Conservatives, who will make a deliciously inviting target as they savage public spending to right the ship of state.

But if the Parallax Brief is correct in assuming this, why didn’t Labour sit in the background and try to appear magnanimous while allowing the Lib Dems to lift the Tories over the threshold into coalition government?

Realpolitik, that’s why.

Those on the right of the Conservative Party, the ones none too pleased with Cameron anyway, and even less pleased with his Big Society election pitch, have barely concealed their contempt at his immediate offer to open negotiations with the Liberal Democrats – the Leftish, pro-Europe, unilateralist, tree-hugging, beardy-weirdy Liberal Democrats. Norman Tebbit outright said it was wrong; Frazer Nelson, the editor of the Spectator, and wired into the Conservatives as much as any journalist, said at first that Spectator couldn’t support it. Iain Martin, editor of the Wall Street Jorunal Europe, wrote a series of increasingly testy blogs about the negotiations. And although we didn’t hear from them, the Parallax Brief would be willing to bet the ranch that a sizable portion of the Conservative Party felt likewise.

By tempting the Liberal Democrats into negotiations, Labour gave this hornets nest a good shake. The usually cool Malcolm Rifkind appeared incandescent on the 24 hour news stump when news of the secret negotiations broke. The Spectator and Telegraph spoke of Clegg’s perfidy. Meantime, once Labour had out bid the Tories, Mr Cameron would have looked very foolish before his party indeed – and more important for a Tory, weak – if he offered compromise and good will, only to be outflanked at the end. Labour forced him to up his offer, and up it he did, offering a electoral reform referendum on switching from FPTP to AV. This will have made the internal strains within his party even worse.

But wait, there’s more!

By tempting the Liberal Democrats into secret negotiations, Labour made Nick Clegg look as brazenly self serving as the rest.

The Parallax Brief is open to the possibility that Lord Mandleson and Alastair Campbell, apparently the main driving forces behind the offer, were desperate to cling to power. Certainly, these publicity loving, war-addicted souls will find life lonely outside government without the compensation of sitting on the Opposition benches in the Commons to keep them in the fray. It’s also possible that both cooked up the ruse as a convenient way to extrude Mr. Brown from the leadership.

But that aside, Labour has, in the space of not much more than 24 hours, sullied the pristine Lib Dem image, catalyzed the already festering resentment in the press (and no doubt the party), and, by forcing the Conservative negotiation team to cede more and more, planted the seeds of resentment that can open into full blown rebellion further down the line.

Is it too much to think that the Dark Lord of Spin suffered Clegg to hunger and then fed him with manna*? Once Clegg took the bait, the trap was sprung and Mandelson was in a no lose situation: either back in government, or despoiling his replacements.

*Deuteronomy, since you ask

Gordon Brown Spotted In New Job

May 12th, 2010 by The Parallax Brief

Brown Job

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The Importance of Appearing Earnest on Debt

March 12th, 2010 by The Parallax Brief

Former IMF chief economist Simon Johnson writes on his brilliant blog* that Greek debt is actually a bubble. Bizarre as this may sound for a country whose debt situation has deteriorated to the point where its spread over German Bunds has stretched to near breaking point, the argument is persuasive:

By the end of 2011 Greece’s debt will around 150% of GDP (…based on the 2009 IMF Article IV assessment…) About 80 percent of this debt is foreign owned… Every 1 percentage point rise in interest rates means Greece needs to send an additional 1.2 percent of GDP abroad to those bondholders.

What if Greek interest rates rise to, say, 10% – a modest premium for a country which has the highest external public debt/GDP ratio in the world, which continues (under the so-called “austerity” program) to refinance even the interest on that debt without actually paying a centime out of its own pocket, and which is struggling to establish any sustained backing from the rest of Europe? Greece would need to send at total of 12% of GDP abroad per year, once they rollover the existing stock of debt to these new rates (nearly half of Greek debt will roll over within 3 years).

This is simply impossible… German reparation payments were 2.4 percent of GNP during 1925-32, and in the years immediately after 1982, the net transfer of resources from Latin America was 3.5 percent of GDP (a fifth of its export earnings). Neither of these were good experiences.

Bubble math is easy. Hide all the names and just look at the numbers. If debt looks like it will explode as a percent of GDP, then a spectacular collapse is in the cards.

It’s a frightening thought, especially when one considers that the EU from here is effectively faced with a choice, according to Mr Johnson, of bailing out Greece for not a few billion here or there but for the full EUR180 bln the (more…)

Attacking on Defence Will Do Tories No Good This Time

March 11th, 2010 by The Parallax Brief

Iain Martin writes in his superb Wall Street Journal blog that David Cameron has blown “up what’s left of the consensus on defence”, and that the Conservatives may well be able to make political capital by attacking Labour’s record on defence — an area in which the Tories have traditionally held the upper hand.

A win for the under fire Tory leader at PMQs in the Commons this week.

[…]

Labour MPs looked incredulous at such a direct attack on ground they have long thought a political no man’s land: defence. This is an issue Labour long ago thought closed down. The government might be accused of being too gung-ho since 9/11, but the old charge of the 1980s of any weakness on defence hasn’t really been applicable. Now, the allegation that the fighting of two wars was underfunded reopens the argument.

It’s often forgotten, but defence – as much as tax and nationalisation – was the issue the Labour modernisers had to neutralise after the party went mad on the subject after the 1979 election. The party had a generation of robust Atlanticists – George Robertson being the most notable – to help it make the shift back and Ernest Bevin’s noble tradition of muscular patriotism to draw on.

Since the mid-1990s, post-Cold War, this has framed Labour policy. And it’s tended to trap the Tories, removing any natural advantage…

But at PMQs Cameron was signalling in clear terms he thinks that the issue of Brown and defence funding in the last decade is so serious… When you consider the public response around the Help for Heroes campaign etc and concern over casualties it could be that Cameron’s on to something.

Or not, as the case probably is.

It is true that the Conservatives have a traditional advantage on defence: on this point, history has proved them right and British (more…)