Is there a storm coming?

Is there a storm coming?

In an article on CNBC, with an article entitled, Bank of England’s Haldane warns on inflation; bond yields move higher (cnbc.com), they summarise the article, “In a recorded lecture, Haldane noted that there were both upside and downside risks to the inflation outlook, but cautioned that an inflationary “tiger” had awoken. … Global markets have been jittery over the past week due to a spike in the U.S. 10-year Treasury yield, driven in part by rising expectations for inflation and economic growth. …

Earlier this week, U.S. Federal Reserve Chairman Jerome Powell sought to temper concerns that the Fed would tighten monetary policy conditions in the face of rising inflation. Haldane is seen as a long term hawk on interest rates, and I add the critical question to ask is why now? Although for monetarists, the increase in QE, and the synchronous reduction in real goods/production caused by the slump might be one explanation but they can’t explain why we’ve had ZIRP for the last 12 years. I know that technically ZIRP is the interest rate and a policy input and inflation is the change in prices (ΔP) which may or may not be a policy outcome. The fact is we do not know if bond yields increasing is right or not i.e. if this is a result of market fundamentals or if the US Bond yield rises are a statement of confidence in the US government. The markert determining the US T-bonds need a risk premium would be potentially catastrophic.

This article, Warning: the Bond Market is Starting to Blow Up Again, at ZeroHedge, is a bear market broker’s advert for investment advice, but has two very interesting charts, showing, that yields have been higher recently and that there is massive room in the US real economy to take up the slack. It also suggest that the spike in yields may have been caused by the Chinese Central Bank’s psyops. In my eyes, the real economy, suggests that inflation is unlikely to reoccur soon, as shown by the levels of unemployment and a heathy (or at least a not unhealthy) fixed capital formation; however, Haldane is reciting the bourgeoisie’s favourite mantras, inflation is coming, we need to increase interest rates, although in the UK that would just increase the govt’s cost to borrow, in theory. In reality, changes in market yields does not impact the interest paid by the govt., it impacts the prices of issued bonds.

US Unemployment 2017-21 from Trading Economics
US Inflation 2017-2021 from Trading Economics
US Growth 2018-2021 from Trading Economics
US Fixed Capital Formation 2018-21 from Trading Economics

This is just fear mongering isn’t it? …

Starmer, a new chapter?

Starmer, a new chapter?

Late last week, Kier Starmer made what was billed as the first of his major policy speeches. You can see it here, and read it here. (I have only read it.) Some people’s reactions seem instant, and I am not sure how well thought out they are. My first instinct on reading some of what the usual culprits are saying about the “Recovery Bonds” is, “Hmm. Left wingers can’t complain we want to use fiscal policy to kick start the economy and complain when @Keir_Starmer and @AnnelieseDodds want to use bonds to fund it. Bond financing of fiscal debt is axiomatic”. I add that missing out of mentioning and criticising Brexit continues the mistake of only permitting the Tories to talk about the growing disaster, you’d think we’d learned the message over deficit fetishism, we can’t let the Tories set the narrative unchallenged. Silence on climate change is also very disappointing.

The investment ambition is weak, like Miliband’s promise of 1m homes over the parliament, 100,000 new business seems small beer given 1.7m unemployed and the low rates of capital formation a feature endemic in British capitalism since 2010. “High wages, High skills” is not a strategy, it’s a slogan unless we can pick the next winners of the creative destruction process. This can be done via the market, even with public money (look at the EU’s Horizon 2020 & its predecessor FP7) or by technocratic or democratic rationing, but 100,000 startups is not enough compared with £500bn funded National/regional Investment Bank[s] offered in the 2017/9 manifesto. Since part of this future is healthcare and old age care, notorious low wage sectors, there will need to be income redistribution policies to ensure that wages and earnings in the personal care industries are sufficient for the purposes of justice and the generation of innovation. The inequality and injustice exposed by CV19’s disclosure of what is genuinely essential needs to be rectified. The silence on sick pay and redundancy payments is also disappointing. Another part of the post covid, next generation recovery must be green manufacturing and science, which is why the country needs an industrial policy and yet again, Brexit and our exit of the Horizon 2020 programme will not be a help with this.

Phil BC, the public sociologist, is not so excited by the economics, and even less to with what it says about the strategy. Phil criticises the steps away from the promises of industrial democracy & democratic nationalisations. I think he’s right and this, I think, aligns with my critique which I also made of the Dodds speech that there’s no industrial strategy, we have no way of helping the next generation winners succeed. Actually it’s not quite the same, the industrial democracy proposals were about power in the economy, an industrial policy is about the classic questions of economics; what we make and do, who does it, with what, and who gets it. Phil concludes his post with a comment on political strategy,

[Starmerism] is capable of taking on new, interesting, and innovative policy ideas. But strategically, this was no departure from what we’ve seen up until now and was, explicitly, a divorce from the Corbynism it happily gestured to a year ago. … Try as he might, he cannot avoid the issue. Keir Starmer either locates Labour in the interests of the rising generation and sticks up for its core vote, as Corbynism partially managed, or he loses. The political calculus is that simple.

Phil BC – on his blog

James Meadway is equally calm about the economics as far as it goes but is concerned that like with grand political strategy, Starmer is fighting the last election and maybe the one before. He points out that the elite consensus is now anti-austerity and that an ideologically light Tory Party can spend money and make token gestures towards climate change control, particularly if it involves chucking cash at companies owned by their doners. Meadway says,

… but Johnson has spotted the same. He and those around him are starting to lay out a programme for a reinvigorated, economically interventionist and environmentally-tinged Conservatism, which, if they pull it off, could plausibly cement the party in power for the next decade.

Labour’s aim should be to disrupt that effort as far as possible – not to goad them into making it happen.

James Meadway – New Statesman

Meadway asks us all to share the intellectual load as he argues that there can be no return to the social justice models of pre-pandemic Britain, and it’s this potentially compelling tide that makes a comparison with 1945 possible. People returned from WWII, empowered and determined not to return to the poverty, social injustice and pro-fascist defence & security polices of the inter-war Tories and took down Churchill with them. But continuing with the theme of ’45, it is alleged that Churchill said of Attlee, “A modest man with much to be modest about.” This must also be part of Kier’s hope, because in 45, the orator lost although when it comes to oratory, as in so much else, Johnson is not Churchill, but Attlee was surrounded by giants, Starmer is not. Perhaps presidentialism doesn’t suit Labour.

So on economics, strategy and justice, it’s all a bit meh, but also dangerous for Labour. If Starmer, his consiglieri and acolytes misjudge the Tories and/or our core decides that the compromises with Blue Labour are too much and if Brexit’s costs gets worse as more of the exit deadlines pass, his collusion with Brexit and errors of psephological judgement will also cost him and Labour dear. …

Let’s see the Brexit deal risk assessment

Let’s see the Brexit deal risk assessment

While thinking about how to make waves around the Tories Brexshite mess, I have come to the conclusion that the fact they’ve turned off parliamentary scrutiny is a big problem; we have no effective politicians to engage with. They are also treating us to mushroom therapy by withholding the impact analysis on the future relationship treaty. It’s clear that small businesses are having difficulty exporting, jobs in finance and distribution are moving to continental Europe, there are stirrings of border fetishism rising in Northern Ireland and the settled status programme will lead to massive hardship although in the latter case it’s as much be design as by accident. Let’s see the Impact Assessment, we’ve paid for it.

 …

Eire is an independent country!

I was pointed at this article, in the Guardian, by Ireland’s President, Michael Higgins, foreshadowing the 100th Anniversary of the Anglo-Irish Treaty that established Eire as an independent state. Given the lethal violence that has occurred ever since those that came to be called British arrived in Ireland, this is a remarkable piece of writing, arguing that,

Injustices perpetrated in the name of imperialism, and in resistance to it, often had a brutalising effect, leaving a bitter residue of pain and resentment, sometimes passed down through generations and left available to those willing to reignite inherited grievances.

What our current reflection consists of, I suggest, is not the offering of a set of competing rationalisations for different kinds of violence. Instead it is about understanding the contexts in which they occurred.

The rewards for this will come in the form in restoring the connection between moral instinct and public policy. That is an authenticity for which so many of our citizens, on this shared, vulnerable planet, yearn.

Michael Higgins, President of Ireland, The Guardian

This is a remarkably gentle offering recognising that both the British & Irish peoples are victims trapped by their own history, a history rarely studied in the Great Britain, at least not by me. It is more urgent than at any time since 1997 due to the growing inter-state animosity between the UK and the EU over the issues of the Irish Border resurrected from its resting, and it was only resting, place by Brexit.

from the Guardian, their featured image

Higgins words, for those that want them to, remind those of us in the UK of the massive impact the empire still has here, and not just through the lunatic nostalgia peddled by the Brexit campaigners, but also through the expectations of those who still look to their cultural locus as somewhere that’s not Britain, i.e. people who fail the Tebbit cricket test and also, those whose claims of equal citizenship the State rejects, from the Windrush generation to the abandoned 3 million.

I have from time to time sought to understand Ireland’s history particularly why Northern Ireland’s politics descended into violence; I was 12 when the civil rights association was formed, and 14 when Bernadette Devlin entered Parliament and British Soldiers were sent to Northern Ireland. I can see clearly now that despite studying Modern History at “A” Level, I learned little about Ireland’s struggle for independence, nor about the conflicting nationalisms that led it its partition. It’s obvious the contempt some Brexiters have for Eire and this is built on a deep well of, for me, hard to see racism. I now understand those Irish people or people of Irish descent who seek to keep it visible in order to combat it.

This speech is another wake-up call for us all, to consider the issues of not only peace in Northern Ireland, which many, particularly in the Brexit wing of the Tory Party seem to have forgotten, but also colonialism, continued decolonisation, history, the teaching of history, Anglo-Irish international relations and anti-racism aimed in solidarity with both the Irish and others resident in the UK oppressed due to our imperial past and/or a nostalgia for it. …

News on the Forde Inquiry

News on the Forde Inquiry

The Labour Party have announced further delay in the issuing of the Forde Inquiry into the leaked document prepared for the General Secretary on antisemitism in the Labour Party. The Forde Inquiry reports this delay here, which includes the text of a letter to the General Secretary and a note for the NEC. I believe the report is essential for the Labour Party to begin to work together in a unified fashion and to genuinely begin to end factionalism. I believe it is important to do so and do so in a way that doesn’t involve one side winning. If wrong doing has occurred, it needs to be discovered and punished. The delay, it seems, is caused by a fear that premature publication would interfere with the ICO investigation. Some commentators dispute that this is the case. Forde says, in his letter to David Evans, hosted on the Inquiry site on a page named, ‘Update on the Forde Inquiry‘,

We have recently been made aware, however, that as a result of those potential breaches, the ICO has indicated it is making inquiries, pursuant to its statutory duties.  Having regard to the possible direction and outcome of those inquiries, we are therefore concerned that the publication of our report could prejudice those inquiries and our ability ultimately to deliver our final report to the NEC. 

We have considered whether any aspect of our report can be disclosed despite the existence of the ICO’s inquiries.  However, after careful consideration, we consider there is a real risk that even partial disclosure of our report and findings could have the potential to prejudice the ICO’s work.  As soon as its inquiries are completed, and resolved, we will provide a report. 

Dr Martin Forde

The ICO took about 13 months to complete their investigation into Dido Harding’s Talk Talk failure in 2015/6 and also attended a DCMS Select Committee hearing on the affair during the investigation. The Labour Party will have reported themselves to the ICO in April 2020, by law, within 72 hours of the breach’s occurrence. That might suggest there’s only a month or two to wait. It seems we have no choice.


Labour’s response will be complicated by the unhelpful legal intervention of some of the people named in the report; it is my view that the General Secretary had a right and a duty to examine Labour’s records in preparing evidence for the EHRC. Workplace correspondence belongs to the company and may be ‘trawled’ if there is reason to believe wrong doing has occurred. The idea that Labour had no right to look for this and find it is unserious. However, anyone named in the leaked document, including the accused will have a right to remedy, which may include compensation if the Labour Party are found to have placed inadequate technical and organisational controls on the document once constructed, or if the Labour Party is otherwise held to be responsible for its leak. I am curious what will happen if it is found that the leaker or leakers was/were entitled to see the document but bound to keep it secret. I find the legal advice not to submit it to the EHRC strange although the EHRC found that there was no policy in conducting investigations without this evidence and made clear that things, if only velocity, had improved once McNicol moved on.

The Forde Inquiry terms of reference state ask that it look into the structure, culture and practices of the Labour Party. This will include any racism within its staff management processes. I find it hard to believe that this cannot be released, and I for one, will be asking for standard corporate diversity reporting, on pay at least, in the NEC Annual Report.  …

Thank you Lewisham Deptford Labour

daveinbrusselsepchamber

I was elected as Secretary of my CLP tonight. We were running late and so I wasn’t able to speak. This is what I would have said.

Thank you for your confidence in me.

Most of you know me, I have been in Deptford for 10 years and in the Party for much longer. I campaign more than some, less than others. I ave done a couple of branch offices and been on the EC for a number of years although not last year. I am Union delegate from the GMB.

We have a task to pick ourselves up after our defeat in 2019, the last year has not been easy for local activists due to the pandemic, we need to learn new tricks to keep in touch with our voters and those our MP and councillors represent.

I hope to serve in maintaining members power in the Party, a manifesto based on our collective experience with democratic legitimacy is a powerful tool that will help us reconnect with voters, win power and allow us to build a better society.

Our strength is our collective experience, knowledge and thirst for justice, together we develop a programme, distil a manifesto and then choose candidates for public office to pursue these policies.

We, in Lewisham Deptford, have a proud record fighting racism, we campaigned to oppose NRPF in Lewisham and London, opposing the hostile environment, and acting in solidarity with the families of the dead and dispossessed of the Grenfell fire, and in solidarity with the Windrush generation, supported by our MP who has signed the “MPs not border guards” pledge. I hope we continue with this.

We need to make the party welcoming for all, everyone’s opinion counts, everyone must be able to speak without fear.

Let us remember the Labour Party is a cause not a career. Let’s win the London Mayoral election and have a great Conference as we prepare for the next council and general election. …

Is he up to it?

Is he up to it?

Reading Polls takes some care which is why I suggest that one reviews polls that illustrate the range of results rather those that at the moment maximise Labour’s support.

Whether the polls suggest Keir is better thought of than Boris seems to depend on the question asked. Straight forward net approvals, Keir’s score is better than Boris although the gap seems to be closing, over the last few weeks, Boris score has improved, Keir’s has fallen. When asked who’d make the best PM Boris often wins although not at yougov, you can inspect their numbers here, or or in chart form on  Starmer vs Johnson, approval ratings, on this blog from last week. Opros, who I have not heard of,  has Boris ahead and also discusses the different questions asked.

I am concerned that neither he nor we are doing well enough, and I am not alone nor isolated with those his supporters might consider the usual culprits and those who expressed disappointment or opposition from day 1, sadly making what was a moment, into a tradition.  Unlike 172 members of the PLP in 2016, I am not calling for a no-confidence in either Starmer or Rayner within a year of their election since that would be an act of contempt for the tens of thousand that voted for them; what I am asking is that those that did, honestly answer the question, “is he up to it?”

He has been good in the Commons, but it only counts if the press report it; he’s been poor on PPE, poor & late on lockdown,  poor on last summer’s exams, poor on COVID-19 safety in schools, the choice of competence and not corruption is questionable, we are poor, virtually silent, on sick pay and redundancy pay, have abstained on human rights law diminutions by not properly opposing the spycops law,  nor supporting the extension of the eviction  ban and his collusion on Brexit, both not arguing to extend transition and agreeing the, what is now obviously seen even in such a short time, terrible future relationship and withdrawal agreements makes dealing with the fallout from Brexit more than tricky and we again collude with the laws that may yet reopen the lethal armed violence in Northern Ireland. He is also backing Boris on Scottish independence, a brave move, given how we got to where we are in Scotland. Are you sure he’s up to it? I am not suggesting that given the choice you were wrong to vote for him, I thought about it, but is he meeting your expectations, if not, perhaps you should tell him. …

In Germany

In Germany

There is a Federal Parliament election in Germany later in the year. It’s not looking good for the SPD who are the minority partner in Merkel’s CDU/CSU coalition. Both or all three parties find Die Linke and AfD to be unacceptable partners but this may test the CDU’s principles. One lesson for the left is that supporting right wing govt’s or pursuing right wing politics kills the Party, with obvious examples being Greece & Scotland, and now Germany. Solidarity to my German comrades, irrespective of which parry they’re in; it would seem they have a choice of three.

 …

The EU, too early to ask to rejoin?

The EU, too early to ask to rejoin?

I am standing for anothereurope’s national committee, the poll closes tonight, if you’ve not voted, please do so and put me first, I explain why in another article on this blog and in this article I look at rejoining. I had thought “rejoining the EU” to be off the table for years but the post Brexit trade deal is turning to shit even more quickly than I expected. Again, I over-estimate the Tories; if I was planning to fuck up the economy, and betray noisy element of my electoral coalition, I’d have sort have planned to do it over a period of time, inspired by the instruction manual of how to boil a frog, hoping they wouldn’t notice. But no, within days, it’s clear that its useless to catch fish if you can’t sell it, that a customs border between Britain and Northern Ireland is going to be a problem in supplying northern Irish supermarkets, that warehousing jobs are going to move to the continent, that exporters are going to have to open European offices, or in the case of some food businesses stop exporting, that exported goods in transit over the turn of the year will be returned and/or burnt and that supply chains will be disrupted impacting British manufacturing productivity. While we may be in a tariff free agreement, the trade border is not frictionless and this friction will cost people money, their jobs and in some cases, patron owned small businesses, many with long histories of success will sadly go under. We need to remember Boris’s summary of his industrial policy, “Fuck Business”.

The thing that could generate the most schadenfreude is that the victims in this first month would seem to be advocates of leaving the EU i.e. the fishing industry and the DUP or victims of government bullying which is why so many businesses have been so silent over the last six months. This government has no loyalty to its allies, only to its paymasters, the lesson to be learned is that the Tories are not to be trusted. I feel for you loss and sense of betrayal and ask that you join in, in attempts to fix the new issues surrounding trade with Europe

While I believe that we should rejoin, but there are two problems, one the Tories and secondly, there will need to be unanimity amongst the member states and many of them will be fed up with our behaviour over not only the last 11 months but in much of the time leading up to our 2016 vote. We will need to show that we’ll be better Europeans and probably show it for a sustained period. We are unlikely to get our opt-outs back, on the financial rebate, immigration, the economic stability pact, the Justice Chapter and our opt-out from the goals of further political and economic union which includes the Euro. This Tory government will not agree to these goals, and the country will need to show a renewed commitment to the European project by kicking them out. The time taken to negotiate a true re-entry could be some time, the quickest ever was Finland which took three years and much may depend on how we choose to use our new found sovereignty. In theory we have currently adopted the acquis and so can prove our ability to meet the market pressures and obligations of the single market. The only question out-standing is are we sufficiently democratic given we have an appointed second chamber and no basic law. We should note that our financial contribution will be welcome.

It will take time;  in order to mitigate the damage being done to the economy now, I think we’ll have to pursue a stealth mission to re-join the single market either via a swiss route, of a bilateral agreement, by developing the future relationship agreement. This will be hard with this current Government and Parliament, partly because of its hard on for ‘controlling our borders’. The alternative is to pursue EFTA membership.

I was complaining to a friend, about my new blue passport and he boasted that his burgundy passport had seven years and I said, “we’ll be back in by then”. He suggested not, and on looking at it, I think he’s right, but we can start now with the single market.

Image Credit: Rick Cohen @flickr CC 2006 BY-SA, European Union Expansion Celebration – cropped and resized …

Making Policy in the Labour Party

Making Policy in the Labour Party

The Party have asked 10 questions, some of which seem very similar; I have not had time to decode many of them. I have submitted my answers which are based on the CLPD model answers but in some cases mine are shorter because argument is taken out and in some cases I have added new content. It's critical to ensure conference and the membership remain central to policy making and the manifesto. For more, use the 'read more' button ...