Monday, 17 May 2010

Spare Us the Restoration Comedy, There’s A ‘Live Rail’ Approaching..

At school, I have a hazy memory of the Restoration being presented as being all about the reopening of theatres, unleashing pent up demand for maypoles and the sweeping to Jordan-like fame of buxom orange girls. Wikipedia tells me different:

"In 1661,Oliver Cromwell's body was exhumed from Westminster Abbey, and was subjected to the ritual of a posthumous execution,..... Symbolically, this took place on 30 January; the same date that Charles I had been executed. His body was hanged in chains at Tyburn. Finally, his disinterred body was thrown into a pit, while his severed head was displayed on a pole outside Westminster Hall until 1685."

What brings this to mind? Duh, the amazing discovery that Labour did some things the Tories Don't Like in their last few days in office. Digging up a corpse and giving it a kicking to establish one's own legitimacy has a long pedigree. Hopi needn't over worry about oiling the wheels of a rapid rebuttal unit, this is a very old trick. It will only convince the already converted.

In other news, Gideon and his sidekick Laws have announced a significant move towards taxation without representation in the form of an Office for Budgetary Responsibility. And the Times are leading on the plan to move forwards towards the sunny uplands of political and democratic renewal by, creating 160+ new unelected peers. My, isn't last year's crisis of political legitimacy over MPs expenses paying dividends now for those who need to insulate their next moves from any kind of democratic accountability? My gut feeling is that these moves will prove ephemeral: I agree with Potlatch when he says a fiscal crisis, as we now face, represents a political choice inviting political answers.

Meanwhile, amongst the grownups, Merkel has acknowledged that the Eurozone bailout isn't a permanent fix. George Magnus (that calm, hyper-intelligent guy from UBS with a Keynes-like 'tache that Mason often interviews on Newsnight) agrees. He seems to be saying he does not think the European Union's Greek rescue will be enough to resolve the situation or stop it from spiralling into a structural crisis for all large debtor nations in the industrialised world - unless somehow the EU becomes a fully political union. Indeed, at points, his carefully technical language gets even scarier: he seems to suggest that more or less the entire Western World is moving into a 'debt trap': no plausible growth rates are going to be sufficiently high to offset the rising cost of borrowing for Govts.

I'm no economist but I think this means he's saying we're going to have to pay more tax for less services and it's still not going to be enough to stabilise the situation. If things get really bad, there seem to be two ways out of this currently being kicked about in technical economic discussion:

1. As George Magnus suggests, the Eurozone might have to move to complete political union – the much discussed 'United States of Europe'. I regard this as utterly unfeasible, but things change quickly under this sort of pressure.

2. For the weaker members of the Eurozone to leave and re-establish their own currencies. But no one has the faintest idea of how to do this and if it happened it would be a crushing blow, not only to the political 'project' of the EU but also to trade within the EU, which represents a high proportion of all world trade.

Either eventuality would certainly mean that quite a bit of British held Greek/Portuguese/Spanish and, especially, Irish debt would be 'restructured': the preferred financial euphemism for 'you can whistle for it matey, I'm not paying'.

Europe is famously the 'live rail' of Tory party politics- just think how much more electricity that rail is carrying now they're in coalition with a pro-European Party....

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