Friday, 17 April 2015

Mr Putin's Strategy Prevails

Watching as much as I can bear of the election coverage it is striking how ineffective almost every gambit seems to be.  Fairly dramatic policy commitments are launched; incidents planned and unplanned strike the news editor's desk with enough force to command headline coverage; mighty gaffes are perpetrated; claim, counterclaim, downright lie and outright abuse are hurled; and all disappear from the scene in a welter of newly-minted nonsense, with a half-life of about an hour.

Postcard from Hell
It has been suggested that Mr Putin's over-arching strategy for managing politics in the era of the interweb (over which he exercises a lot less control than his Chinese counterparts) is to bombard all media with such a cacophony of high volume noise, the less coherent the better, so that confusion reigns and nobody believes anything.

(Nearer to home, I'd say that recent UK exponents of media management such as Campbell, Mandelson and Clifford, all essayed a similar strategy - but episodically; smokescreens deployed reactively at times of particularly awkward embarrassment for their clients and masters, rather than as an ongoing 24/7 way of life.  Modus operandi, rather than vivendi.)

Under the Putin doctrine the incumbent power is presumed to be the beneficiary as no opposition ever gains traction.

I wonder if Cameron, by design or otherwise, is in line to benefit from the same?  He doesn't even need to generate the hubub himself (though the Tories play their part) - his opponents do it for him, which might even add to its charm.

A good weekend to all.


Thursday, 16 April 2015

The debate of the 2nd division.

The five party leaders not currently in power just had their debate. Though not much debating went on.

More a load of unsubstantiated claims. Counter claims,. Accusations and shouting. They started off by all unanimously attacking Cameron, who decided against appearing. Clegg and the liberals got away Scot {SNP} free. Possibly as all of the people behind podiums know they are going to need the Liberals if they are to form a coalition.

Once the attack the Tories was out the way , it was 4 vs 1. And that 1 , was Miliband.  The danger was always that the Labour leader would represent the existing establishment. he was accused of being in favour of austerity and immigration caps and not spending on the poorest..
This was a very left wing audience. And Miliband had to make sure he stuck to his centrist-left of centre stance and not be forced into a who's more 'progressive ' argument.
{All four left wing parties used 'progressive' 4 or 5 times in their opening 1 minute address. I was hoping Nigel was going to say he was a regressive. Just to wind the others up.}

Miliband did well. He was perfectly sound. He was attacked from the far left, for not being socialist enough. And from the right by UKIP.  But he may well have been better to have followed Clegg and Cameron and not appear at all. It would be like Cameron debating 4 Farages. Not worth the risk of being cast as a metro middler. I suspect if Miliband was in a stronger polling position he wouldn't have had to do this debate.

Sturgeon was strong again. Offered Miliband a sort of Von Ribbentrop-non-aggression pact where they would defeat the Tories together. he sort of declined..sort of.

Bennett was as incoherent as ever. Takes a breath in when she should be expanding out. A poor speaker and a poor debater. She even mentioned Caroline Lucas at the end. To remind us they do actually have a more popular and much better spokesperson.

Leanne Wood was alright. If you like that velvet glove sounding communism. Her party is  as barmy as the greens. She said "Wales has millions in poverty." Mostly caused by her lot, If her policies are anything to go by.

Farage ..well, if I was his adviser I'd be furious with him. He attacked the others. Attacked the audience. Attacked the BBC who was hosting the debate. Attacked the audience. He came across as angry, bigoted and unpleasant.

Unless you are already a supporter. In which case he came across as determined, focused, unyielding and right.

For me , I would have used the opportunity to try and gain new UKIP supporters. UKIP seem determined to just keep reinforcing the beliefs of those they have.

On the audience, Farage called it a typical left wing audience. 
And it was.
 Dimbleby stepped in to say that the audience was chosen by a polling company to ensure a balanced reflection of the parties speaking. 
So Farage was right...80% left wing. It certainly seemed that way. But no one wins a contract by shouting down the client.

Why does the BBc have it's own special definition of balance that differs from the usually agreed one? 


 Nigel didn't even try to win over the studio audience. He was only interested in the TV one. I doubt he won many undecideds over. But he has a knack of playing wild cards and winning. i thought he was poor in the other debate. But UKIP saw a slight up swing. Today he got a million quid from the Daily Express, so he will be celebrating regardless.
Though what can he do with that cheque? The billboards are booked up. The TV ads done. The flyers one out. Postal voting begins tomorrow. Its a bit late for anything now.

Over all ?

What did we learn ?

That Cameron and Clegg safely watching at home and laughing themselves to tears made the right decision to completely avoid this ultra left bun fight.

Wednesday, 15 April 2015

Money's too tight to mention

The base rate in the UK has been stuck at 0.5% for years; in the US and Japan the equivalents are close to zero; even in abstemious Germany, the central bank is practically giving cash away. The Swiss and German governments are able to charge people to lend them money for up to ten years. UK mortgage rates for the safest borrowers are at all-time lows: both First Direct and Nationwide are offering ten-year fixes at 2.89%.

Easy money, right? Possibly not.

Saint Milton tells us that low nominal interest rates may tell us that monetary policy has been too tight, and high rates do not necessarily mean that money is too tight.  So is money too easy or too tight? Are low interest rates storing up trouble or are we sacrificing growth because our monetary generals are fighting the last war?

Mark Carney and Mario Draghi say that Europe is on an even keel, but UK inflation is at a modern-era low. Carney says that the only way up, baby, for UK rates, but committee colleagues are not so sure. Keynesians are still calling for fiscal stimulus.

So how can we decide what to do?

In 1933 the US government started down the road towards the paper-money era, but it took until 1972 for the post-gold regime to be formalised. For nearly 20 years after that, western nations experimented with various regimes, some more successful than others. In Britain we suffered from micro-managed money-rationing, to wage-price regulation, from hyper-inflation, to economic breakdown; we "shadowed" the Mark, during a period of great divergence between our great nations, and we narrowly avoided joining the Euro. But since 1992 the UK has enjoyed ever more stable inflation and huge long-term reductions in interest rates, thanks to inflation-targetting by the Bank of England.

But with the rise of China and the others, suddenly inflation is not what it used to be. A boom in Britain does not cause a wage spike as it used to, because so much is imported. Even though GDP is rising at a heady clip, average wages are fairly stagnant. So the question remains: how do we know when we are booming or bust? Does inflation targetting do now what its inventors aimed for?

Enter "nominal GDP targetting". Nominal GDP is a measure of the total amount of spending in the economy. Experts seem to think that to avoid hyper-inflation and debt traps it ought to be kept to about 5% a year. In times of proper growth, inflation will fall as productivity soars; in less prosperous times, real growth will falter, and inflation will rise, but never too high to cause difficulties.

Mark Carney is keen on NGDP, and his views seem to be based on the UK's healthy but sustainable NGDP numbers. The US apparently does not enjoy such a healthy situation, and so money is too tight there. The eurozone needs to fire up the printing presses until they run hot.

Don't be surprised if the next UK government moves towards NGDP targetting, whoever wins the election.