IQ: At Home Abroad

Headline of the Day

2011-03-11T10:23:00.014Z

Fred Goodwin Gets Superinjunction to Stop Him Being Called a Banker - The Guardian, London, 11 March, 2011

Glossary:

Sir Frederick Anderson Goodwin CA, FCIBS, former chief executive of the Royal Bank of Scotland Group (RBS), which was bailed out by the British government in 2008 and is now owned mostly by the British taxpayer. Also known as “Fred the Shred.”

Superinjunction: an injunction obtained in a secret convening of the court where in the result, the court file, the names of the parties and even the terms of the injunction order are secret except as between the parties, counsel, the judge and the court staff.

'Sobering Lessons in the Politics of Illusion'

2011-03-01T11:19:00.003Z

Fred Halliday, who died last year, was a professor of international relations at the London School of Economics and Political Science for more than 20 years and one of the world's most influential scholars in the field of Middle Eastern studies. He spoke ten languages, including Arabic, and had over 20 books to his name, including Two Hours That Shook The World, which was about 9/11. In 2009, he wrote an article about Libya on the occasion of the 40th anniversary of the coup d'etat that installed Muammar Gaddafi in power. Reflecting on the "sobering lessons in the politics of illusion" to be learned from the history of the Great Socialist People’s Libyan Arab Jamahiriya, this is how Halliday ended the piece:

Libya is far from the most brutal regime in the world, or even the region: it has less blood on its hands than (for example) Sudan, Iraq, and Syria. But al-Jamahiriyah remains a grotesque entity. In its way it resembles a protection-racket run by a family group and its associates who wrested control of a state and its people by force and then ruled for forty years with no attempt to secure popular legitimation.

The outside world may be compelled by considerations of security, energy and investment to deal with this state. But there is no reason to indulge the fantasies that are constantly promoted about its political and social character, within the country and abroad. Al-Jamahiriyah is not a "state of the masses": it is a state of robbers, in formal terms a kleptocracy. The Libyan people have for far too long been denied the right to choose their own leaders and political system - and to benefit from their country's wealth via oil-and-gas deals of the kind the west is now so keen to promote. The sooner the form of rule they endure is consigned to the past, the better.

Cameron in Egypt

2011-02-21T13:05:00.006Z

On the whole, the early weeks of 2011 have not gone well for David Cameron. Mainly, the British prime minister has been bogged down in a defense of his so-called Big Society agenda ahead of his government's first big series of budget cuts, which will prove increasingly unpopular as they kick in. He has, however, created a raft of good headlines this morning by being the first world leader to visit Egypt since Hosni Mubarak was ousted as president 10 days ago.

Cameron's diplomatic coup is not entirely without risk; he could lend premature legitimacy to a military junta that may not introduce democratic reforms on a schedule that will placate the still-massing opposition forces in the country. But in the short term, it has to be said, Cameron has made a swift, strong and statesmanlike gesture that will serve him and his country well at home and abroad. The political subtext at home will rankle his own opposition forces: he is underscoring the exceptionally strong ties between his two Labour predecessors, Tony Blair and Gordon Brown, and the Mubarak regime, not to mention other teetering and nervous regimes in the region.

The Albatross of Europe

2011-02-13T18:12:00.009Z

When Conservative Party leader David Cameron formed a coalition government with the pro-European Liberal Democrats, he thought he had marginalised his hardline Eurosceptics. The new prime minister and many other centrists and Tory modernisers around him breathed a sigh of relief. That was May 2010. Not even a year later, the Conservative Party has the albatross of Europe hanging around its neck again.

Cameron's inner circle should have seen this coming. The prime minister's immediate problem is the European Convention on Human Rights and its court in Strasbourg. The court is demanding that Britain allow prisoners to vote in elections. This drives most Tory MPs crazy, and this past week they took advantage of a backbench debate on the issue to vote overwhelmingly against it.

In and of itself, the prisoner issue might fade away. But at a time when the British economy is in bad enough shape - even one of Cameron's Cabinet ministers describes it as "calamitous" - there are seemingly constant ill winds blowing in from across the Channel. Britain is not part of the European single-currency zone. Still, the financial fragility of the PIGS - Portugal, Ireland, Greece and Spain - and the pressure PIGS rescue efforts past and future is putting on the rest of Europe, including Britain, amount to a steady clarion call to Eurosceptics and even some erstwhile Europhiles to stay as far away from Europe as possible. With the coalition government's budget cutting regime coming under ferocious pressure, worsening squabbles over Europe is the last thing Downing Street needs.

US-UK: Still Shoulder to Shoulder?

2011-02-09T14:42:00.008Z

Inch by inch, ever so slightly, Britain continues to distance itself from the United States on foreign policy. It began with a speech nearly five years ago by then-Conservative Party leader David Cameron in which he urged that the US-UK relationship should be "solid but not slavish." His words, pointedly delivered on the fifth anniversary of 9/11, presaged what would become four years later under Conservative government a deliberate, if slight, recalibration of the so-called special relationship following the shoulder-to-shoulder, "51st state" strategy pursued by Tony Blair. Then, just weeks after his party's 2010 electoral victory, Cameron made it clear on a visit to Turkey that he would take a hardish line on Israel's dealing with the Palestinians: "Gaza cannot and must not be allowed to remain a prison camp." Now along comes Cameron's foreign secretary, William Hague, to give Israel and the US a slap on the wrist over the Middle East peace process as revolutions stir among Israel's neighbours. In response to Tunisia and Egypt, Hague has called on Israel to get on with negotiations and drop the negative posture it has adopted in response to the turmoil in Egypt: "Part of the fear is that uncertainty and change will complicate the process still further. That means there is a real urgency for the Israelis and the United States. Recent events mean this is an even more urgent priority and that's a case we are putting to the Israeli Government and in Washington,” he said.

Abu Dhabi Scenes

2011-02-04T17:32:00.002Z

World Future Energy Summit, January 2011

Inside the Abu Dhabi National Exhibition Centre

Masdar Institute, the "quad"

Masdar Institute, the cooling tower

Masdar Institute, personal rapid transport vehicle

How America Lost Tahrir Square

2011-02-02T16:30:00.006Z

When he gave his “We hear your voices” speech last night, Barack Obama sounded like he wanted to hop on Air Force One and join the demonstrators in Tahrir Square. But they don’t want him there. This is hard for Americans to understand. On the way to the streets of Cairo – and Amman and Sanaa – a funny thing happened to America’s supposed desire to spread democracy around the world. When convenient, as in the invasion of Iraq, Washington has flown the banner of democracy and “American values” as its tanks and warplanes moved in. When inconvenient, when too much democracy is deemed to harm US interests and upset important alliances, Washington sets aside talk about power to the people in the interest of propping up ancienes regimes like Mubarak’s and others across the greater Middle East, just as it did in Latin America for decades. Americans don’t appreciate that this is the message the world has taken away from Iraq. In this way, America’s once justifiable claim to be a global sponsor of democracy – through its history and indeed some of its actions and interventions (e.g. its role in the liberation of Eastern Europe) – is wrecked on the shoals of more recent history. There must be room for real politik in international relations, but America played the false democracy card too many times. "Shame on you, Americans!” Wahid Fawzi, the foreign affairs spokesman of the Egypt’s opposition Wafd Party, told Time magazine. “You are giving constant headaches about democracy. The streets want one thing, and America wants another. The Egyptians are never going to forget this position." Americans, ever looking forward, have short memories. The world does not.

Abu Dhabi: The Capital of Prudence?

2011-01-29T12:15:00.010Z

Abu Dhabi doesn’t look anything like a pinnacle of prudence. Construction cranes outnumber existing buildings in some parts of the capital of the United Arab Emirates. At the vast Capital Centre building site, just one of dozens scattered around the city, hoardings announce: “23 towers, 7 hotels, 1 world class exhibition centre.” Across the road, the Abu Dhabi National Exhibition Centre, having just hosted the World Future Energy Summit (the so-called Davos of renewable energy), is getting ready for February’s megagathering, the International Defence Exhibition & Conference 2011. Two suspiciously pharaonic projects, the Guggenheim Abu Dhabi and the Louvre Abu Dhabi, are in the works on Abu Dhabi’s Saadiyat Island (“one island, many masterpieces”). As the rest of the world struggles out of the Great Recession, Abu Dhabi’s grand ambitions beg the question: is all this really sensible?

It’s not as wild and crazy as it looks. Abu Dhabi is not Dubai. The two best known of seven emirates have taken very different paths in the 40 years since independence. Dubai is a port that grew into a business hub and financial center – and, like Wall Street or the City of London, was hit hard by the financial crisis of the last three years. Business sagged, construction slowed, rents dropped, expats left, and tourists cooled on the OTT Vegas-style hotels and manufactured beaches. In short order, stories about Dubai’s collapse spread around the world.

Abu Dhabi didn’t completely escape the financial blows, but it was cushioned against them. By oil, for one thing: sitting on over 90 percent of the UAE’s oil, Abu Dhabi possesses 9 percent of world reserves and has benefited from rising oil prices (up more than 20 percent over the past year). With GDP per capita behind only even tinier Luxembourg and another petrostate, Norway, Abu Dhabi has lavished guaranteed incomes-for-life and other extraordinary benefits on its citizens, who make up only 19 percent of the population, the rest being non-Emiratis. As Dubai shrinks, Abu Dhabi’s economy and its population of 1.6 million continue to grow: many expats who work in “AD” commute by car from Dubai, where housing is plentiful and rents lower.

Even though Abu Dhabi’s oil reserves are forecast to last through the century, the ruling Al Nahyan family is pouring billions into the diversification of its economy – from oil- to knowledge-based. The focus on higher education, homegrown entrepreneurs, renewable-energy research, and overseas investment is evident at Masdar, the state-funded renewable energy company. Its units include Masdar Capital, which invests in renewable and clean-tech companies around the world, and Masdar Institute (photo), a research-driven graduate school developed with MIT that offers full scholarships and stipends to national and foreign students. This is not an exercise in charity, says Masdar CEO Sultan Ahmed Al Jaber. “We’re here to make money. Financial sustainability is the number one item on our agenda,” he says, adding what could be, or should be, Abu Dhabi’s motto: “If you’re not financially sustainable, you can’t sustainable in anything else.”

The State Arizona Is In

2011-01-10T16:18:00.010Z

Arizona, which many of us know mostly as one of the most beautiful states in the American West, will now be known to many more people as the place where Congresswoman Gabrielle Giffords was shot in the head at point-blank range on Jan. 8, where a federal judge, John Roll, and five other people were killed, including a 9-year-old girl, Christina Green, and where 13 people besides Ms. Giffords were wounded. Here are some other things to know about Arizona, taken from an article by Ken Silverstein in the July 2010 issue of Harper's magazine:

Although dozens of states are facing budget crises, the situation in Arizona is arguably the nation’s worst, graver even than in California. A horrific budget deficit has been papered over with massive borrowing and accounting gimmickry, and the state may yet have to issue IOUs to employees and vendors. All-day kindergarten has been eliminated statewide, and some districts have adopted a four-day school week. Arizona’s state parks, despite bringing in 2 million visitors and $266 million annually, have lost 80 percent of their budget, with up to two thirds of the parks now in danger of closure. The legislature slashed the budget for the Department of Revenue, which required the agency to fire hundreds of state auditors and tax collectors; lawmakers boasted that these measures saved $25 million, but a top official in the department estimated that the state would miss out on $174 million in tax collections as a result...

Arizona lawmakers have shown little enthusiasm for dealing seriously with the state’s insolvency. They have instead preferred to focus on matters that have little to do with the crisis. Lawmakers have turned racial profiling into official policy, through a new law that requires police to stop suspected illegal immigrants and demand to see their papers; anyone not carrying acceptable proof of citizenship can be arrested for trespassing and thrown in jail for up to six months. But this is just one bill in what has been a season of provocative legislating. Another new law bans the funding of any ethnic-studies programs in the public schools, while a third prohibits “intentionally or knowingly creating a human-animal hybrid.” Lawmakers declared February 8 the “Boy Scout Holiday,” took time out to discount fishing-license fees for Eagle Scouts, and approved a constitutional right to hunt…

In January, Senator Jack Harper, an immaculately combed zealot who speaks in the patter of an infomercial voiceover, submitted a bill that would allow faculty members to carry guns on university campuses, saying it was “one very small step in trying to eliminate gun-free zones, where there’s absolutely no one who could defend themselves if a terrorist incident happened.” The house passed a measure that would force President Barack Obama to show his birth certificate to state officials if he runs for re-election, as well as a bill that bars Arizona from entering into any program to regulate greenhouse gases without approval from the legislature. “There are only two ways to vote on this,” said Representative Ray Barnes of the latter initiative. “Yes, or face the east in the morning and worship the EPA [U.S. Environmental Protection Agency] because they own you.”...

As the national midterm elections approach in November, the Tea Party movement is supplying the Republican Party with most of its momentum. But this movement, and the strain of aggrieved libertarianism it espouses, cannot claim much representation in elected office. This disparity has led many on the left to dismiss Tea Partiers as a media phenomenon, and to speculate that their ideas could not possibly “stand up to the test” of real governance. But there is, in fact, one place where the results of Tea Party governance has already been tested: Arizona, where the Tea Party is arguably the ruling party....

There will always be an England

2011-01-07T12:08:00.008Z

It could only happen here. Two great English institutions -- cricket and the Shipping Forecast -- have collided. A live radio broadcast of an England v Australia match was interrupted to bring BBC listeners the Shipping Forecast, which goes out four times a day to give details of conditions in the seas around the UK, Ireland and beyond. The Shipping Forecast has a loyal following, and not just among sailors. But it was no ordinary cricket match that was interrupted. It was the Ashes, a Test cricket series played between England and Australia that is considered the most celebrated rivalry in the sport and dates back to 1882, and the broadcast happened to come at the very moment “the tourists” (i.e., England) were about to win in Oz for the first time in 24 years. Have a listen here.

Smart Thinking on Gold

2010-10-11T21:31:00.004+01:00

My son Shayne McGuire has a new book on gold out this month. Watch him talk - very prudently - to the Financial Times on gold here.

And Cameron Is Listening...

2010-10-10T21:44:00.004+01:00

My article in Newsweek this week:

No one looks more like a loser in Britain these days than Tony Blair. Since the Labour Party he once led lost the election last May and turned 10 Downing Street over to a Conservative–Liberal Democrat coalition, senior Labour figures have turned their backs on him. The latest and most far-reaching of several inquiries into the circumstances surrounding Britain’s entry into the Iraq War seems certain to question his probity and judgment when it reports around the end of the year. The only bright spot for this fallen idol is his memoir, A Journey, which remains at or near the top of bestseller lists.

But guess who’s buying the book? In a recent interview with The Guardian, Michael Gove, the new education secretary and a leading member of Conservative Prime Minister David Cameron’s brain trust, jumped out of his chair, ran to his desk and grabbed a copy. “I love A Journey,” he gushed. He then recited with admiration a section in which Blair maintains that opposition to public-service reform can be overcome. And Gove is far from alone in his appreciation for the Tory’s old nemesis. Blair’s narrative has become a key part of the Cameron narrative, political philosophy and policy program. Many of Blair’s old reforms that were stymied by his ideological enemies within his own party are now being adopted, adapted, and promoted by the Conservatives.

Needless to say, there are important differences between the modernized Conservative and Labour parties, in particular when it comes to the role and size of the central government. But even Cameron used to refer to himself as the “heir to Blair,” and there’s a distinct Blairite hue to his core program, from giving state schools a measure of autonomy to forcing competition upon hospitals and local medical practices. The same is true in defense: in his final years before leaving office in 2007, Blair’s closeness to America caused him major political problems; still, last week the Tories vowed against great pressure and at great expense to maintain Britain’s nuclear-defense capability, a key pillar of the U.S.-U.K. relationship.

So it was hardly a shock last week at the party conference in Birmingham to see Steve Hilton, one of Cameron’s closest policy advisers, chatting animatedly with Will Hutton, an influential New Labour economic theorist. Hutton has been asked by the new government to head a review of public-sector pay—a critical issue at a time of deep budget cuts. Just as 15 years ago Hutton’s The State We’re In helped to shape New Labour thinking, his new book, Them and Us: Greed and Inequality—Why We Need a Fair Society, is coloring the thinking of Cameron’s inner circle.

Indeed, Blair would have smiled approvingly at many of the policies Tory ministers paraded before the party faithful at the Birmingham conference. Perversely, he may feel less welcome at his own party’s conferences. The extent of Blair’s pariah status in Labour was on full display during Labour’s post-election leadership battle. The main contenders may have owed their political careers to Blair, who led the party to victory in three elections, but they spent much of their time distancing themselves from him. Partly this was because of Iraq and partly because, given Britain’s deficit crisis, they needed to break from a past of which Blair is such a towering symbol. Two brothers, David and Ed Miliband, ended up fighting each other for the prize. David, 45, was foreign secretary under Blair’s successor, Gordon Brown, but nonetheless closely tied to Blair, having been an architect of much New Labour thinking. Ed, 40 and arguably to the left of his brother politically, was more closely linked to Brown, for whom he last served as energy and climate-change secretary. “Red Ed” won, and David, declining a shadow cabinet post proffered by his brother, retreated to the parliamentary backbenches.

Cast out by your own party, embraced by your enemy—it’s the story not only of Blair but also of Margaret Thatcher, whose economic reforms found a home in New Labour’s pro-business, union-skeptic agenda. Thatcher, who turned 85 this week, once recalled that, after notifying the queen of her resignation in 1990, she decided to return to her office at 10 Downing Street “to make sure that I’d left nothing and left it tidy.” Then she discovered that her key “had been taken away. So I couldn’t go back in.” Her great consolation was that in some ways, with Blair at No. 10, she had never left. And with Cameron there today, so it is for Blair.

Gaza='Prison Camp'

2010-07-27T10:04:00.003+01:00

We're not used to this kind of language from America's staunchest ally. This is British Prime Minister David Cameron speaking on a visit to Turkey:

“Turkey's relationships in the [Middle East] region, both with Israel and with the Arab world, are of incalculable value. No other country has the same potential to build understanding between Israel and the Arab world. I know that Gaza has led to real strains in Turkey's relationship with Israel. But Turkey is a friend of Israel. And I urge Turkey, and Israel, not to give up on that friendship. Let me be clear. The Israeli attack on the Gaza flotilla was completely unacceptable. And I have told PM Netanyahu, we will expect the Israeli inquiry to be swift, transparent and rigorous. Let me also be clear that the situation in Gaza has to change. Humanitarian goods and people must flow in both directions. Gaza cannot and must not be allowed to remain a prison camp. But as, hopefully, we move in the coming weeks to direct talks between Israel and the Palestinians so it's Turkey that can make the case for peace and Turkey that can help to press the parties to come together, and point the way to a just and viable solution.“

'Special Relationship': R.I.P.

2010-07-21T10:24:00.005+01:00

My piece in the Daily Mirror today following David Cameron's article in the Wall Street Journal, asserting that "I am hard-headed and realistic about US-UK relations. I understand that we are the junior partner—just as we were in the 1940s and, indeed, in the 1980s":

Finally! Why did it take a Tory prime minister to put in its place the so-called special relationship between the United States and the United Kingdom? The short answer is the Iraq war - but I'll get to that later.

The fact is that the special relationship has been a crumbling anachronism for two decades. The long goodbye began at the end of the Cold War, when, amid Britain's slow economic and geopolitical decline, Washington cast its gaze across the Pacific toward Asia.

Having lived here since 1996 and been a dual citizen since 2004, I've been both sentimental and uneasy about the bittersweet relationship.

Sentimental? After 9/11, a handwritten note was slipped through my family's Victorian letter box in London as we tried to come to grips with what had happened back in New York.

The note, which was so lovely and, I think, British in its kindness, was from our neigh-bours. "I can see the lights on in your house, but I don't want to disturb you. Be assured you are surrounded by friends." It was signed, "With love, Sandy and David."

Uneasy? Tony Blair tarnished the special relationship for me and, more importantly, for the United Kingdom. He was truly close to Bill Clinton, with w h o m he shared a modernising, centre-left ideology; Blair had tears in his eyes at Warwick University in December 2000, when Clinton came to Britain to speak one last time as President.

But for Blair the relationship with America was much more than personal. He saw it as a way of magnifying post-imperial Britain's role in the world. Then along came President George W Bush and Iraq. Blair's star fell from the sky. The special relationship became a joke.

If you know only one thing about the relationship it is this: its importance depends upon which end of the telescope you view it through. It's a big deal viewed from Britain. But from the US, for better or worse, it's a speck on the horizon.

A caricature Cameron - an anti-European Eton toff slavishly beholden to the American behemoth - might well have wallowed in the familiar territory as the heir to Margaret Thatcher, who with Ronald Reagan presided over the high point of the post-war special relationship in killing off Communism.

To his credit, he didn't.

Rethinking Britain's Greatness II

2010-07-12T09:58:00.010+01:00

From a column in the Guardian today by Madeleine Bunting:

What "punching above your weight" means in practice is unbridled ambition and massive risk-taking. The obvious parallels with BP are those other former giants of British corporate power, the banks HBOS and RBS. All are now cautionary tales of corporate hubris. In 1998 Blair made a speech in Dublin in which he talked of Britain "emerging from a post-imperial malaise". It was the era of Cool Britannia and the beginning of Blair's military adventures: culture, finance, military participation and corporate ambition were the key, mutually reinforcing, planks of his project.

One by one they have either led us to some form of disaster (financial sector, BP), or to embarrassing failure (liberal interventionism in Iraq and Afghanistan). Last August Newsweek's London bureau chief, Stryker McGuire, wrote an influential front-cover article on how time was up for "once-great Britain". He argued that Blair had tried one final stab at greatness by locking Britain into America's wars, but that he was merely postponing the inevitable decline in the country's place in the world.

This is one of those issues on which it is very hard for politicians to conduct a serious conversation. Nick Clegg was pilloried in the election campaign for his commonsense remarks on Britain's second-class status in the world. It is compulsory piety for politicians to talk of Britain as great, and anyone who challenges that delusion is dismissed as talking Britain down. But we should be very wary of delusions of grandeur now that we are counting the cost of the devastating fallout – from the Gulf of Mexico and the Muslim world to the bank bailouts – of a decade and a half of this notion of punching above our weight.

Rethinking Britain's Greatness

2010-05-19T11:50:00.004+01:00

Hardly a day goes by in London that some august gathering or eminent institution is not considering, or reconsidering, Britain's role in the world. Never more so than right now, with a new government settling in and budgetary axes flying up and down every corridor in Whitehall.

In this working paper, Michael Codner, director of Military Science at the Royal United Services Institute (RUSI), elegantly lays out the choices confronting Britain as one of the world's great military powers and America's most capable and important fighting ally. A taste: "The UK is currently the fourth biggest defence spender in the world but the ninth largest economy. In other words, the country pays more for defence than its world economic standing justifies. The dilemma turns on the retention of world status; if the taxpayer is unprepared to fund defence at current levels (2.3 per cent GDP), Britain will be unable to prevent its dwindling international influence. The UK could make moderate defence cuts or even slash defence spending to the NATO European average of 1.65 per cent. Either way, large cuts could be made if Britain abandoned its predilection for perceived world influence."

Seeing Through the Fog

2010-05-15T11:16:00.002+01:00

Amid all the huffing and puffing in post-revolution Britain, two really standout pieces of commentary: Martin Kettle in the Guardian, who says, among other things, "No Conservative leader has taken such a risk for such essentially liberal ends in living memory," and Martin Wolf in the Financial Times, who says, "All British political careers end in failure. Mr Brown’s is a grim reminder of this truth. But it is far too easy to blame him alone for the UK’s current plight. The truth, I would argue, is that his biggest error was to believe in the conventional wisdom about the prospects for durable economic stability, the robustness of modern financial markets and, surprisingly perhaps, the strength of the post-Thatcher UK economy. He then doubled up on this bet by building his plans for public spending on the assumption that the good times would roll on forever. Mr Brown’s boasts of durable prosperity proved to be based on evanescent success. The inconvenient truth is that the UK economy proved far more fragile than almost anybody with influence had believed. If the new government is to succeed, it must dare to confront this sad truth."

Remember This Face

2010-04-16T15:32:00.002+01:00

Well, well. Just when you thought the leaders' debates in the UK, like presidential debates in the United States, would be rubbish, along comes Britain's first-ever televised version of same, and we're blown away. Maybe not blown away, but something pretty impressive happened in Manchester last night, and as a result the pre-May 6 election political dynamic is very different today than it was yesterday. See my piece
in the Evening Standard.

Every Stat Tells a Story, Don't It?

2010-03-22T17:19:00.002Z

They say a picture is worth a thousand words. How about a number? Some remarkable statistics from Stephen Roach at Morgan Stanley:

"While China and India collectively account for close to 40% of the world’s population, their combined consumption is only about $2.5 trillion. By contrast, while the United States contains only about 4.5% of the world’s population, its annual consumption bill is running at about a $10 trillion rate."

When Markets, Not Ministers, Rule

2010-03-11T13:46:00.003Z

In Newsweek this week: Labour Prime Minister Gordon Brown hasn't even set a date for the British general election yet, but financial markets have already bet on the outcome by, among other things, hammering the pound. And why not, since the markets could end up running the country instead of the politicians.

Recent polls on Britain's election--which must be held by June 3--point to an outcome so close that any incoming government will have no real popular mandate and possibly no majority. Hardly by accident, the forecasts of a hung Parliament have coincided with an abrupt 5 percent drop in the pound's value against the dollar. Of course, the pound has been in decline for months. The state of Britain's economy is no secret: heavily indebted, slow to recover. What the sterling's recent nosedive reflects are concerns in the marketplace that a weak new government, rather than a more robust Tory one, will not be able to muster the political support needed to put into place stringent fiscal measures to address the growing deficit.

Paradoxically, however, a truly weak government in the form of a hung Parliament could impose fiscal discipline on Britain's finances. To avoid being punished by the markets and risking real damage to the British economy, the country's political leaders will have little choice but to bow to market forces. A lot can change between now and the election, and a hung Parliament is by no means a certainty. But if that's the outcome of the balloting, ministers won't be writing the next budget--the markets will.

The Not-Always-White House

2010-02-19T12:03:00.005Z

Whatever happens over the course of the Obama presidency, there's one historical milestone that cannot be undone: the presence of an African-American family in a White House that was built in part by slave labor. These photos by White House photographer Pete Souza are worth looking at.

The Blair Witch Project

2010-02-15T15:35:00.005Z

As I write in Newsweek this week, Tony Blair remains an esteemed figure in the distant ballrooms and boardrooms where he makes much of his money these days. But at home the former prime minister has become a British version of Lyndon Johnson, his substantial accomplishments buried beneath a mountain of opprobrium over his role in the Iraq War. Any attempt to defend his record during a decade as prime minister evaporates instantly in the heat of anti-Blair rage, and so it will be for some time to come.

Health Care in America: Data Points

2009-11-06T10:53:00.004Z

Whenever I go back to the United States, as I did in October, I put myself through a kind of re-indoctrination program: listening to talk radio. This time, driving from Philadelphia to Pittsburgh, I had six full hours of it in each direction. The air waves were filled chatter about health-care reform. No surprise there; the Obama administration's push on health care is hugely contentious.

But as I drove, something else - something not always obvious to those of who have spent so much time out of the country - became clear: the sheer size of the health-care industry in the United States. At least half the radio commercials were health related. Do you have any idea how many "joint centers" (think arthritis) there must be in the towns and cities between Philly and Pittsburgh? Also, I never knew that ILM (involuntary leg movement) was the scourge it apparently is. Then there are the buildings along the highways - clinics, pharmaceutical companies, medical centers.

How big is the U.S. health-care industry? (Most of the figures below are from the U.S. Department of Labor Bureau of Labor Statistics.)

- It's the largest industry in the country.
- It's 17 percent of the American economy.
- It employs 14 million Americans (as of 2006)
- Seven of the 20 fastest-growing occupations in America are health-care related (as of 2006)
- The industry will generate 3 million new wage and salary jobs between 2006 and 2016, more than any other industry

Something I saw in Pittsburgh, once the capital of the American steel industry, drove the point home to me. The tallest building there is the 64-story U.S. Steel Tower. The top of the building now bears the logo UPMC - University of Pittsburgh Medical Center. That says a lot.

'The Paranoid Style of American Politics'

2009-10-08T09:52:00.009+01:00

Lou Cannon, the political journalist and biographer of Ronald Reagan, has been trawling through the Hoover Institution Library and Archives at Stanford University. He's found some interesting parallels between the fierce political attacks on Barack Obama and those on Franklin Roosevelt. Well worth a look. Lou's conclusions:

"What I was reminded of in the archives is that what Richard Hofstadter called 'the paranoid style of American politics' has always existed side by side with legitimate opposition - and that neither has changed as much as we might think. Hofstadter himself held that temperament rather than a change in philosophy was at the 'heart of the New Deal.' Roosevelt changed many things, more often than not for the better, but with the exception of public power developments almost always did so within the framework of American capitalism.

"Obama also operates within that framework. He is no more a radical or a socialist, let alone a despot, than was FDR. Nor has he challenged private ownership of anything. Based on his performance to date, Obama also shares with FDR a dubious achievement - 'conspicuous failure to produce economic recovery,' to quote David Kennedy's book on the New Deal. Kennedy sees Roosevelt's achievements as nuanced and short-handed by the word 'security.' Social Security, to be sure, but also "security for capitalists and consumers, for workers and employers, for corporations and farms and homeowners and bankers and builders as well.

"Look closely at the Obama advocacies for stimulus and health care and education reform and one sees the same animating impulse as the New Deal: security and a better life for all Americans. Whether or not Obama succeeds is at this point an open question, but I suspect that his opposition sees what he is about more clearly than Obama's more impatient supporters. That's why the opponents sound so much like the critics of the New Deal, which fell short of its bolder promises but nonetheless changed the lives of Americans for the better."

Kaddafi, Blair and the Imported Camels

2009-09-25T13:41:00.004+01:00

Muammar Kaddafi is one of those people you can never read too much about. Witness his failure to find lodgings in New York this past week, his call for Barack Obama, "son of Africa," to rule "forever," and so forth. Anyway, here's a great story told to me by John Burton, who was Tony Blair's constituency agent in the north of England for many years:

"[T]here’s a lovely tale Tony told me about [Muammar] Kaddafi of Libya. Tony’s going to meet him in a tented caravan—oasis, palm trees, sand, camels. So Tony said, “I go out and he greets me in English and he does the interview in Arabic for the local television.” And half way through, Kaddafi stops, puts his hand on Tony’s knee and says “Tony, why did you want camels?” And Tony said “Pardon? Camels? I don’t know anything about camels.” And Kaddafi says, “From Downing Street. They said you wanted camels.” And Tony says, “Oh. They’ll just be … it’ll be for a picture.” And Kaddafi says, “Well, it’s just it was a bit of a problem because we don’t have any camels here. So we’ve had to import them.” [Burton laughs] They’d had to import them from another part of Libya! That was wonderful!"

School Daze

2009-09-07T11:33:00.015+01:00

American Conservatives have been up in arms since the White House announced last month that Obama would give a back-to-school speech tomorrow when many students have their first day of classes of the new academic year. America being America, there are diametrically opposed views on the speech. Education Secretary Arne Duncan says Obama simply wants to encourage the country's youth to do their best: "The president's whole message is about personal responsibility and challenging students to take their education very, very seriously." Wait a minute, says Florida Republican party chairman Jim Greer, who is "absolutely appalled that taxpayer dollars are being used to spread President Obama's socialist ideology." Have a look at this discussion.

Footnote: A change of heart from Jim Greer in Florida. "My kids watched it,," he said, "and I thought it was appropriate." His rationale: "The White House responded to the concerns of parents and educators across this country." Or Greer was wrong in the first place.

Of Fires and Angels

2009-09-02T15:23:00.004+01:00

My father-in-law called last night to say the skies over Boulder, Colorado, were dusky with smoke and ash from the forest fires raging north of Los Angeles - a distance of about 1,000 miles. I was reminded of a piece I did for Newsweek in 1993, when we lived in L.A. and monster fires were burning not too far north of us, in the Santa Monica Mountains and along the coast. This is what I saw as I was driving north to south along the Pacific Coast Highway:

From the coast, at midnight last Tuesday, the Thousand Oaks wildfire appeared as a pair of sunspots along the Santa Monica Mountains ridgeline. The two pulsated and flared in the Santa Ana winds that must be something like the hot tramontana land wind of Spain that Gabriel Garcia Marquez says "carries with it the seeds of madness." The fire had been started on a faraway golf course the previous afternoon. Soon Santa Anas would send it over the ridge, down to the Pacific. Then shifting winds suddenly off the water would push the fire back up the hillsides, roughly along its earlier path, back toward the once golden grasses off the 16th green at Los Robles, where it had all begun.

By then a dozen other fires had also broken out - a string of firecrackers exploding in the dry chaparral and sage of the Los Angeles Basin. The symbolism of fires encircling Los Angeles seemed all too appropriate. Eighteen months ago flames spread across the center of Los Angeles as arsonists torched more than 1,000 buildings in the riots. This was at the heart of the megalopolis, a down-at-the-heels, mostly black and brown part of town. In wealthier, whiter places, like Brentwood and Beverly Hills, residents worried (with little cause) that those fires would come their way. Last week's fires were mostly the result of arson, too, not acts of God. But this time all but one of them - the Chatsworth fire, in distant northwest L.A. - burned outside the city limits and struck at the middle and upper classes.

The wildfires appear, at first glance, to be an economic leveler in a place where social disparities resemble those of the Third World. L.A.'s brush fires, like the mudslides that slurp Malibu mansions into canyons and ravines during the rainy season, have almost always hit the wealthy who can afford to five on hills and oceanfront lots with magnificent views and cleaner air. But many of the shop-owners in South-Central have little hope of rebuilding out of the ashes in still-empty lots, whereas the prosperous residents who were burned out in Altadena (northeast of downtown) or Laguna Beach (on the California Riviera) have generous homeowners' insurance and are already talking about starting again - many taking the opportunity to remodel kitchens and enlarge decks. Those who escaped relatively unscathed can thank their rooftop sprinklers and their pool-fed firefighting pumps. The chlorine may kill the bushes, but it can save the house.

Local papers duly reported the names of celebrities whose ranches and homes the fires had narrowly missed: Richard Widmark, Tom Selleck, Dick Clark. In the Eaton Canyon area, a still-smoking Jaguar sedan sat in the remains of a garage; the car was charred, its tires melted right down to the hubs. Backyard pools were coated with ash. By one, a collection of metal lawn furniture stood arranged as if the residents were expecting guests. Down the hill the Gerrish Swim and Tennis Club offered lessons, but the sign is all that is left of the club. Of course, the fires' victims were not uniformly well-to-do. In Orange County, at El Morro trailer park, the fires left nothing of one row of mobile homes but a satellite dish, and, on the concrete pads, traces of white, the ashen residue of what had been.

The riot fires of the inner city and the wildfires of the hillsides and oceanfronts are only the most visible symbol of the fragile state of California. Not many years ago the place seemed uniquely blessed. But Prop 13 and the tax revolt chewed holes in bare public parks and the superb state-university system. Aerospace crashed. Real estate plunged. Bases closed. The state that, perhaps more than any other, immigration built, turned on its newest immigrants. The California Dream, once so well worn that it became a cliche, has become an oxymoron - mocked by the record-setting exodus from the state and vilified by those who feel trapped and left behind.

Los Angeles is particularly vulnerable. A true sense of community has never thrived here. Even in the halcyon days of the '80s, Los Angeles did not really cohere, as do other cities like San Antonio or Denver or Seattle. And now the city's underlying social fissures are crystallized for most of America in the gruesome beating videos of Rodney King and Reginald Denny. Los Angeles has come to see itself in those screen images as well: a place so divided by race and class that people have trouble distinguishing victim from aggressor. These days, to outsiders and insiders alike, the City of Angels looks increasingly like a devilish place to live.

Dispatches from the Newspaper Wars

2009-09-02T14:34:00.013+01:00

For a terrific tour d'horizon of the newspaper business's "blackened landscape," as Michael Massing calls it, have a look at his piece in The New York Review of Books. It contains a number of (pleasant) surprises about the industry in the United States. Among them:

* "The MTV generation, known for its indifference to news, has given way to the Obama generation, which craves it."

* "According to one study, of all the time readers spend with a newspaper, 96 percent of it is spent on print editions and barely more than 3 percent on the Web."

* "Similarly, of the $38.5 billion spent on newspaper ads in 2008, just $3 billion was spent on the Web." (Of course, advertising overall has been in decline, but that's another part of the story.)

* Content-charging is working for many papers and gathering steam.

* He found "all kinds of excited activity" in the growing area of nonprofit funding of newspapers. Much of it was apparently incited by this Op-Ed piece in the New York Times earlier this year.

Have a look at Massing's article. Better yet go out and buy the September 24 issue of The New York Review of Books at the newsstand. How radical is that?

Toward A Lesser Britain

2009-08-06T16:25:00.006+01:00

It's no surprise that my cover story in Newsweek International this week has caused a stir in Britain. Much of the reaction has been favorable, but some commentators were predictably riled by the piece and responded with assertions that were more over the top than they said my story was. Note this from the perpetually outraged Simon Heffer: "Newsweek has an article this week under the headline 'Forget the Great in Britain,' which would have the reader believe that we are all on the verge of a collective suicide."

Not quite - so let me repeat my main thesis. Had it not been for first the Cold War and Britain's extraordinary relationship with America, Britain would have long ago had to give up the disproportionate role it has played in world affairs since World War II. When the Cold War ended, Britain carried on as a pocket superpower, close at America's side. After Iraq and Afghanistan, the British people are keen to a little distance between themselves and American military adventures abroad. America, for its part, is forming new alliances, new special relationships, as big, emerging economies become increasingly powerful. What's more, those countries are demanding, and getting, seats at the top table where Britain was one of the lucky few regulars.

Then along came the financial crisis, the bailout of the banks, and the ensuing recession - which will leave Britain in excruciatingly deep debt for a decade. My conclusion: Britain will have to readjust its priorities and rethink its role in the world, becoming in the process a lesser Britain - a Britain great in many ways, but not quite the Great Britain of the postwar period.

Cloud Cuckoo Land

2009-06-30T12:42:00.007+01:00

Almost every day I walk from our flat to the Tube station over Hammersmith Bridge. I'm often listening to the radio news, marveling not only at the beauty of the Thames but also at the economic improbabilities I hear emerging from the mouths of government ministers. Day after day, billions upon billions of pounds in headline-grabbing initiatives are being promised to the voters in the runup to the next general election, which Prime Minister Gordon Brown must call before June of next year. Meanwhile, the British economy, like the global economy, is contracting, unemployment is rising and the government is going deeper and deeper into debt. Short of ratcheting up income taxes beyond the 50-percent top band that was recently imposed, is there any way in the world that what I'm hearing on the radio makes any sense?

No. Just look at the broad outline of Britain's predicament. Banking is absolutely crucial to the UK economy, more than a quarter of which is made up of financial and business-related services. London and New York are for all practical purposes equal in size as financial centers, but of course London's importance to the domestic economy is maginified because the population of the UK is one-fifth of that of the US. Three of the world's five biggest banks (Royal Bank of Scotland, HSBC and Barclays, measured by assets) are headquartered there. As a result of bailouts, the British government is the proud owner of about 70 percent of RBS, whose assets of nearly $4 trillion are much higher than British GDP ($2.7 trillion in 2008). What wrong with that? RBS - "too big to fail" - is a sick bank; that's why it needed to be rescued.

No wonder Bloomberg today is running a story about the possibility of a sterling criss. How's this for sobering news to accompany my radio listening? Bloomberg quotes the British economic historian Niall Ferguson, author of "The Ascent
of Money: A Financial History of the World," which is essential reading for those of us who are not economists and need to know how we went from 15 years of prosperity to where we are today so seemingly abruptly: "The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one." Quoting Bloomberg now: "Ferguson's concern stems from the deterioration in the UK's public finances, which prompted Standard & Poor's to warn on May 21 that the country could lose its AAA debt rating. The firm estimated the cost of propping up Britain's banks at 100 billion pounds ($166 billion) to 145 billion pounds and said government debts could double to almost 100 percent of gross domestic product by 2013."

I emailed somebody who knows much more about of all of this than I do. This is what he had to say: "The [financial] crisis has ended thanks to extremely aggressive government intervention. The banking system [in the UK] did not collapse only because the government extended a colossal insurance blanket over everything: it assumed the banking system's worst risks as its own, which of course means that British citizens have taken on the banking system's risks. There really was no choice but to save the banks. Now there is an assumption that, since the British government will do whatever is necessary to save the banks, that all is well; the economy will gradually recover and the risks will just wither away. Banks rallied very strongly during the third quarter (the price of Barclays more than tripled from the bottom), reflecting the market’s trust that the government’s insurance policy is Warren Buffett quality and not AIG quality. But as Ferguson implied, there is the serious risk that the financial world will start to see UK financial insurance with an AIG stamp and will suddenly stampede, dumping pound assets. Government debt and deficits are truly eye-popping, and we have yet to see how well the market will absorb the massive government bond issues in the months ahead."

Checkbook Journalism, Checkbook Politics

2009-06-19T12:06:00.007+01:00

You will be familiar with - and no doubt appalled by - the story of the MPs allowances scandal in Britain. To refresh your memory have a look at the post below, "The Manure Parliament." The scandal broke after the Daily Telegraph and the Sunday Telegraph paid something in the neighborhood of £100,000 for the data about MPs' expenses - data which the Telegraph has said was copied and not stolen from the parliamentary authorities who were reviewing all the paperwork.

Yesterday the official version of the story finally emerged when more than a million pieces of paper — bills, receipts and claim forms — were posted on the House of Commons website. The contrast between the official story and the Telegraph version could not have been more dramatic, or disheartening. Thousands of the documents were indecipherable: much of the information was blacked out as the MPs, helped by the authorities, censored incriminating material, citing security and privacy. By "redacting" addresses, for example, it was impossible to tell from the official version which MPs “flipped” their second homes to maximise returns from the taxpayer or changed the designation of their homes to avoid paying capital gains tax.

All well and good. But it's interesting to note, whatever your point of view, that this story is unlikely to have broken in the same way in the United States. Under their ethics codes, mainstream American media would almost certainly not been able to pay for information the way the Telegraph did. Note this from the New York Times company policy on ethics in journalism: "We do not pay for interviews or unpublished documents: to do so would create an incentive for sources to falsify material and would cast into doubt the genuineness of much that we publish." Having said that, the ethical boundaries in the UK are by no means sacrosanct. Though both are so-called "quality" dailies, The Times of London turned down on ethical grounds an offer to buy what the Telegraph did.

Finally, the pall that this story has cast over politics in Britain is remarkable, and a bit scary. Voices of reason have had a great deal of difficulty cutting through the angry static. One that has belongs to Peter Riddell who says today: "Rough justice is no justice. The flood of disclosures about MPs’ expenses has led to a haphazard mess in which there is no obvious reason why one MP should be forced out but another survives."

When Television Rocks

2009-06-17T19:44:00.003+01:00

If you're in the States, watch this timely piece of work by the acclaimed documentary-makers Brook Lapping Productions. It airs on the National Geographic Channel on Monday, June 22, at 9 pm EST. (A 3-hour version aired on the BBC in February. The British version uses subtitles when necessary. The U.S. version is 90 minutes long and is dubbed by actors with presumably appropriate accents. God bless America... The series producer, Norma Percy, tells me the BBC version is available for purchase .)

Here's part of a review that ran in the Daily Telegraph (London) in Ferbuary:

Iran and the West was made by Brook Lapping, the Rolls-Royce of political documentary makers. The company’s past achievements include The Death of Yugoslavia and Israel and the Arabs, landmark analyses of their respective topics; past interviewees include Bill Clinton, Slobodan Milosevic and Yasser Arafat. Iran and the West should prove no exception. Saturday’s opener included contributions from everyone from Jimmy Carter to Queen Pahlavi, the Shah of Iran’s wife. They’d been so thorough I half expected them to have disinterred Khomeini for the purpose of a few quotes.The documentary required, throughout, the kind of concentration very rarely demanded of us by television programmes these days. There were no sensationalist repetitions of the bloodiest moments of conflict; there were no patronising historical reconstructions with bad British actors speaking in funny accents. There was simply narrative, as impartial as seemed possible, very tightly told. It was told partly through fascinating archive footage from the time, and partly through the words of the film’s interviewees. Interviewees that included a former head of state, but also the figures whose part in history had less to do with their status than their being in the right place at the right time.

This Is the End II: The Sarah Factor

2009-06-03T11:21:00.003+01:00

The second Cabinet minister in as many days has just announced her resignation from Gordon Brown's disintegrating government. The decision by Hazel Blears, the Communities Secretary, comes not even 24 hours after Home Secretary Jacqui Smith said she was standing down. Also yesterday two junior ministers in the government announced their departure. A pall of such grim despair is settling over Westminster that it's becoming hard to imagine that the Prime Minister can withstand this battering for much longer. The usually well-informed London Times Political Editor Philip Webster says he's hearing from senior Labour MPs that one more high-level resignation will tip Brown "over the edge."

I suspect that at this point the key voice in the downward spiral is that of Sarah Brown, the PM's wife of nine years and mother of their two young boys (and of their first child, a daughter, who was born prematurely and died when she was only 10 days old). A 45-year-old former public-relations executive, Sarah (nee Macaulay) may well have a clearer view of the circumstances surrounding her husband than he does. He's hanging because he can, frankly, and because, from his vantage point, the only thing worse than what he's going through now is the utter disgrace of resignation after less than two years in office. Sarah, focusing on Gordon Brown the husband and father, may see it very differently, if not already, then soon. And she will let him know.

Obama and the Brass

2009-05-14T14:42:00.000+01:00

It's intriguing to watch Barack Obama's evolving relationship with the U.S. military. Have a look at Fred Kaplan's piece ("It's Obama's War Now") in Slate on the ouster of Gen. David McKiernan, commander of NATO forces in Afghanistan, and the naming of his replacement, Gen. Stanley McChrystal.

Consider, too, Obama's U-turn on the release of photographs showing abuse of American detainees in Afghanistan and Iraq. One week, the President signals that the Pentagon will release them as part of a new era of transparency; the next he announces that the White House will block their release and will defend that decision in court on national security grounds.

Here's a fascinating BBC Radio Today program interview on the subject with Melvin A. Goodman, a former CIA analyst who is now a fellow at the Center for International Policy in Washington (to put Goodman's remarks in context, note the CIP's "about us" page).

"The Manure Parliament"

2009-05-14T12:33:00.000+01:00

From manure and moat cleaning to TV porn and bath plugs - these are just some of the items that members of the "Mother of Parliaments" have charged as expenses to the British public. A massive compilation of MPs expenses for the last several years was due to be released this summer under Freedom of Information rules, but the Daily Telegraph paid a mole in order to get the data early. Ever since the Telegraph's revelations began last week, public anger has mounted. The fallout will be hardest on Prime Minister Gordon Brown and his Labour Party, which was already headed for defeat in the next election, sometime before June 3, 2010. But it's only in that sense that the opposition Conservatives and Liberal Democrats will benefit from this contagion, which has brought the entire British political class into disrepute.

Bizarrely, we can blame Margaret Thatcher for this. Here's the history according to Vernon Bogdanor, professor of government at Oxford University, in the Times of London. Back in the 1980s, MPs were poorly paid; their salaries were about £14,000 a year. Thatcher, the prime minister of the day, wanted to correct this and ordered an independent review of MPs' pay. The review recommended much higher salaries. Thatcher knew the voters wouldn't stand for that. To make up for their low salaries, MPs were then encouraged to supplement them through their generous system of allowances.

Over time, their allowances ballooned (along with their salaries, now £60,675 a year for a backbench MP with no special committee roles). By 2006, their total allowances hit £88 million - roughly what it cost in 1985 to operate every single aspect of both the House of Commons and the House of Lords, including salaries, allowances, staff, catering - even the upkeep of Big Ben.

For purposes of comparison, here's some perspective from the New York Times: "In the United States, members of the House of Representatives make $174,000 a year. They also receive, on average, between $1.4 million and $1.9 million a year to run their offices and pay for travel to and from Washington, depending on how far away their districts are. But they are expected to pay for their own housing and living expenses, said Kyle Anderson, a spokesman for the Committee on House Administration."

Just how bad is this mess in the UK? Here's what Tony Wright, a Labour MP who is chairman of the public administration committee, said in Parliament yesterday: "At various times in our history we have had the Long Parliament, we've had the Rump Parliament, we've had the Good Parliament, we've had the Addled Parliament. If we are not careful we shall finish up with the Moat Parliament or the Manure Parliament."

Maybe Content Isn't Free...

2009-05-06T16:42:00.000+01:00

Like lunch, maybe online content isn’t free either. Get ready for more and more talk from MSM – mainstream media – about charging for online content. I just wrote a piece in The Daily Beast about how Rupert Murdoch, whose News Corporation runs the world’s largest English-language journalism business (including the Wall Street Journal), has set up a special team to look into content charging. Steve Brill & Co. have already staked their claim with Journalism Online. Even Britain’s Guardian Media Group, traditionally a left-leaning softie in these matters, is toying with the idea; have a look at this summary of remarks by Carolyn McCall, GMG's CEO, at yesterday’s World Magazine Congress in London. Fasten your seat belts. The bad news is that, over time, you’re increasingly going to have to pay for what you read online – if you’re after quality. The good news is that content-charging may well rescue journalism as we know it (or at least knew it), pumping real money back into reporting - journalism's "empty quarter" - the corner hardest hit by recent cutbacks, layoffs and buyouts.

Gordon Brown: This is the End...

2009-04-30T11:26:00.000+01:00

Sometimes governments end not in a Shakespearean one fell swoop, but in a series of bangs and whimpers. Yesterday a loud bang went off under the government of Gordon Brown. The British prime minister not only lost a vote on the House of Commons where his Labour Party has a majority; he lost a vote on a seemingly peripheral issue – a Liberal Democrat proposal to give all Nepalese Ghurkha soldiers who have served in the Armed Forces an equal right of residence in the United Kingdom. Peter Riddell’s assessment in today’s Times of London perfectly reflects the state of political-establishment opinion in and around Whitehall: “Brown’s premiership faces a lingering death as painful as that experienced by John Major in 1996-97 unless he gets a grip quickly.”

Meanwhile, Brown today faces another seback in the Commons over the corrosive issue of MPs’ expenses. This summer, parliamentary housekeepers will reveal to the public some 1.3 million receipts for MPs' spending on second homes, travel and office costs over the last several years – a Freedom of Information disclosure that will further embarrass Labour as the majority party and add to the end-of-regime feeling that pervades the Brown government. Brown sought to defuse the expenses issue by going on YouTube last week and putting forth a new bookkeeping regime on his own design. That move backfired in terms of both presentation (he came across badly; see "Omigod" below) and substance (his clumsy idea of paying MPs on a per diem basis for showing up to work was so poorly conceived and received that he backed off it himself after a few days).

The conventional wisdom is that Brown won't get a grip and his Labour Party are doomed to go down in defeat at the next election, which he must call before June 3, 2010. Even among the most loyal Labour MPs there’s a growing recognition that Brown lacks the political skills and personality to turn things around at this point. His one slender reed of hope – that somehow he would be seen to master the deepening economic crisis – has slipped further and further away him. He and his team hoped to improve Brown’s political fortunes on the back of the G20 Summit in London in early April, but whatever small boost he gained from that meeting quickly faded as it became clear that the get-together was a pretty inconsequential event in the face of the Great Recession.

Labour MPs are despairing. There's a lot of talk around Westminster about forcing Brown out and replacing him with ... Well, that's the problem. Some of the chatter centers around Alan Johnson, a seasoned and appealing MP who's served in government under Brown and, before him, under Tony Blair. Johnson, 58, is seen by some MPs as an interim figure who could conceivably lead the party into the next general election. The thinking is that Labour would lose the election and Johnson would step aside for ... Again, that's the problem. A sense of drift has taken over the party that so handily and convincingly won the 1997 election, ending 18 years of Tory rule. The drift seems likely to continue. Labour MPs I speak to are resigned to another year of muddling along. They don't like it, but they don't know how to stop the drift.

Omigod

2009-04-22T14:12:00.001+01:00

"Banter between Blokes"

2009-04-15T09:30:00.000+01:00

It’s a tough-guy quote that has been attributed to any number of alpha males, from Admiral of the Fleet John Arbuthnot Fisher of the Royal Navy to Benjamin Disraeli to John Wayne: “Never apologize, never explain.” Then again, sometimes you have to do both, especially if you’re in deep, deep trouble. Which is exactly where British Prime Minister Gordon Brown found himself over the long Easter weekend after one of his closest and longest-serving aides was caught planning a smear campaign against the PM’s political enemies.

“Smeargate,” as it is inevitably called, centers on Damian McBride, director of strategy and planning at 10 Downing Street. In an email exchange that leaked to the press, McBride – known as “McPoison” for his clinical dispatching of Brown antagonists over the years – proposed spreading scurrilous and unsubstantiated stories about Conservative Party leader David Cameron, his shadow chancellor of the Exchequer George Osborne and a couple of lesser Tories. After the story broke last week, the 34-year-old McBride apologized for the “juvenile and inappropriate” slurs and resigned a day later, on Saturday. By Monday Brown had written personal letters of apology to McBride’s targets and was calling for new rules to govern the conduct of special advisers in government.

The episode says a lot about the bunker mentality of some of those in Brown’s inner circle, if not Brown himself. Polls show the Tories consistently racking up a double-digit lead over Labour in the polls ahead of a general election Brown must call sometime before June 3, 2010. Brown managed only a slight bump in his ratings after hosting the agreeable if not hugely successful G20 Summit two weeks ago. As Smeargate demonstrates, at least some members of the Brown squad are desperate to make up some lost ground. That even a single renegade aide – if that’s what McBride was – would resort to smear tactics is a reminder, in the view of some of Brown's critics, that his political apparatus is accustomed less to governance than to engaging in the strong-arm tactics it used to deploy against Prime Minister Tony Blair, the rival Brown spent so many years trying to outflank.

When the story broke, and before the content of the emails was known to the public, McBride and his allies tried to dismiss the affair as “banter between blokes.” The other “blokes” involved were Derek Draper, who runs the party-sponsored website Labour List, and Charlie Whelan, a labor union executive who was Gordon Brown’s spokesman during the early Blair years when Brown was chancellor of the Exchequer In his email, McBride characterized his smears as “a few ideas I have been working on for Red Rag,” a Labour-leaning website designed to counter several well-established Tory-leaning blogs.

If the ideas were mere “banter,” Draper seemed to treat them more seriously than that: according to the London Sunday Times, he replied just 20 minutes after McBride sent his email. “Absolutely totally brilliant Damian,” he wrote. “I’ll think about timing and sort out the technology this week so we can go as soon as possible.” In his original email, McBride admitted his tall tales “are gossipy and mainly intended to destabilize the Tories.” In the end, of course, they mainly destabilized the man at whose right hand he had worked since the early 2000s – Gordon Brown.

The Colossus of the North

2009-04-06T16:49:00.000+01:00

As a very infrequent visitor to the United Arab Emirates, I'm struck by the federation's deep concern about Iran. As an American living in London, my own preoccupation with Iran focuses on four points: 1) will it militarize its nuclear energy program? 2) if so, when? 3) what are the United States, Britain, France and Germany going to do about it, and 4) what is Israel going to do about it.

These are serious concerns, obviously, but they feel almost antiseptic and academic compared to the gut fear experienced by the people and the powers-that-be in Abu Dhabi, the UAE federal capital, and Dubai, its largest city and financial capital, where I spent last week. There, the threat of Iran is up close and personal. Iran has long been a regional power, but for years it was kept in check by its neighbor Iraq. Once upon a time, the United States recognized this; hence, Washington's erstwhile backing of Saddam Hussein against Iran after the overthrow of the Shah of Iran, Washington's previous regional best friend, by the Islamic Revolution under by Ayatollah Khomeini. The U.S.-led war in Iraq has now completely undone the old balance of power in the region and left the UAE feeling particularly vulnerable to Iranian power plays. What the rest of the world might consider to be medium-size provocations or disruptions, like preventing oil-tanker traffic and other trade through the Strait of Hormuz, would be devastating for the UAE.

The UAE has sought to counter the Iranian threat by cementing its ties to the world beyond the greater Middle East. Those ties are clear. Dubai is a highly air-conditioned Western-Asian financial capital that happens to be perfectly situated at a longtime trading crossroads. Abu Dhabi, the largest of the seven emirates, is one of the world's largest oil producers and as such enjoys the protection of the United States and Europe. Less well known is the extent to which the UAE has sought to be seen as an ally to U.S. geopolitical causes. The UAE (population ca. 5 million) has a small number of troops -- less than 200 -- in Afghanistan, for example.

Most recently, the UAE has sought to counter the Iranian nuclear threat with a very different nuclear threat of its own. Abu Dhabi is forming "transparent" partnerships with nuclear nations like the United States and France in order to develop peaceful nuclear energy, which it will need (to desalinate sea water and produce electricity, for example) as oil and natural gas reserves are depleted. In contrast to Iran (so far, at least), the UAE is happy to let an international body enrich the uranium it would need for nuclear power in order to demonstrate its unwillingness to become a nuclear-weapons power. The UAE approach, which is being done in coordination with other states of the Gulf Cooperation Council, sends out two quite canny messages. One, that Iran, too, could go down this road. And two, as Abdulaziz Sager's Dubai-based Gulf Research Center has pointed out, that the UAE and other GCC members are leaving their options open to develop a military nuclear program down the road.

The Death of Newspapers

2009-03-23T14:03:00.000Z

It was nice to see a newspaper not die last week. Platinum Equity, a private equity firm that specializes in turning around troubled businesses, announced that it had bought the failing, 130-year-old San Diego Union-Tribune, thereby saving the paper, at least for now, from the scrap heap.

Let's hope the Union-Tribune survives. In 2006, the California paper won a Pulitzer Prize for its reporting on a bribery scandal that landed former Republican Congressman Rep. Randy "Duke" Cunningham in federal prison. Cunningham had resigned from the House of Representatives the year before after pleading guilty to accepting $2.4 in bribes.

Newspaper deaths, and their consequences, are not limited to the United States. In the Guardian over the weekend, Ian Jack wrote a good piece on the sad fate of newspapers and what their passing means for democracy.

Another Bush Legacy

2009-03-18T10:20:00.001Z

A question that has come up at, among other places, my gym in London: why are there so many weeks between Daylight Saving Time in the U.S. and DST elsewhere? And wasn't the gap narrower before? The answer to the first question is, as it is in the case of so many of life's great riddles, George W. Bush. The answer to the second question is yes.

In 2005 the U.S. Congress passed an energy bill that included a monthlong extension of Daylight Saving Time. Controversial because the change's energy-saving potential was questioned by some experts, the law became effective in 2007. Instead of starting on the first Sunday in April, Daylight Saving Time begins in America on the second Sunday in March. DST ends on the first Sunday in November, one week later than it used to. The EU version of Daylight Saving Time -- European Summer Time -- runs from the last Sunday in March through the last Sunday in October.

Daylight Saving Time has been used in the U.S. and in many European countries since World War I. At that time, in an effort to conserve fuel needed to produce electric power, Germany and Austria began saving daylight at 11:00 p.m. on April 30, 1916, advancing the hands of the clock one hour until the following October. Other countries immediately adopted the change: Belgium, Denmark, France, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Turkey, and Tasmania. In Canada, Nova Scotia and Manitoba adopted it as well, with Britain following suit three weeks later, on May 21, 1916. In 1917, Australia and Newfoundland began saving daylight. The plan was not formally adopted in the U.S. until 1918.

So now you know.

Here We Go Again?

2009-03-17T16:14:00.000Z

A prime minister and his chancellor of the Exchequer are at odds. Sound familiar? I’ll come back to that.

Tony Blair’s ten years in office were marked by a running feud with Gordon Brown. Never calm, their relationship was described as everything from a bad marriage to a blood feud. It was such a never-ending soap opera that it became known by an acronym: the TBGB’s. One question in particular poisoned their relationship: when would Blair make good on his promise to turn power over to Brown, as Brown had given way for Blair when the party leadership opened up in 1994? Never was the feud hotter than in 2006, when Brown let run a rift in the Labour party that eventually forced Blair to announce that he would leave office the following year. At the time the left-wing Labour M.P John McDonnell said, “Most of us have looked on aghast. It’s almost been like an episode of ‘The Sopranos’.”

In recent weeks, there’s been a growing buzz in London that Brown and his chancellor, Alistair Darling, aren’t seeing eye to eye. First, Darling subtly but persistently seemed to be encouraging his boss to bow to public pressure and apologize for not foreseeing the financial crisis when it was brewing years ago. “The key thing that went wrong was that a culture was allowed to develop over the last 15 years or so where the relationship between what people did and what they got went way out of alignment, especially at the top end,” Darling said at one point. “If there is a fault, it is our collective responsibility. All of us have to have the humility to accept that over the last few years, things got out of alignment.”

Finally today an apology of sorts by Brown appears in the Guardian: “I take full responsibility for all my actions, but I think we’re dealing with a bigger problem that is global in nature, as well as national. Perhaps 10 years ago after the Asian crisis when other countries thought these problems would go away, we should have been tougher . . . keeping and forcing these issues on to the agenda like we did on debt relief and other issues of international policy.”

Feud over? Not yet. Now Brown and Darling are said to be at odds over the size of the second stage of Britain’s stimulus package. Darling, perhaps like any good treasurer clutching the national purse strings, wants a smaller one than does Brown. Stay tuned.

G20: No Surprises Here

2009-03-13T16:00:00.000Z

Britain's chancellor of the Exchequer, Alistair Darling, said today that it is important to be "realistic" about what can and cannot be achieved at the April 2 G20 London Summit. He was following Washington's lead; the Obama administration has been lowering expectations that leaders of the world's largest economies would be able to agree on a "global New Deal" to fight the economic crisis.

In an interview with the BBC, the chancellor said the London meeting would not produce the final word on the world's response to recession, describing it instead as "part of a process." "I think we have to be realistic about what we can do together," Darling said.

Please note my story from yesterday in The Daily Beast.

Northern Ireland: More Good News Than Bad

2009-03-13T11:31:00.000Z

In recent days, sectarian violence returned to Northern Ireland. Republican splinter groups killed two soldiers and a policeman in separate attacks. Does this mean the place will sink back into chaos? I don't think so. I'm reminded of what I wrote in Newsweek in August 2001:

Two Northern Irelands were in the news last week. Dominating the front pages: the battered peace process, forever caught in the punch-up between good news and bad. Back on the business pages, a different story unfolded. A luxury Ramada hotel opened its doors in Belfast--part of a sustained construction boom that belies the city's skewed image as a war zone alight with burning police Land Rovers. Real-estate prices continued to climb, well ahead of inflation; retail rents were rising faster in Belfast than anywhere else in Britain except London. A Confederation of British Industry survey found that Northern Ireland was one of only two places in the United Kingdom that would not lose jobs this year.

Pay attention to those business stories. For all the hand-wringing about disarmament and the fate of their elected Assembly, which was temporarily suspended last weekend, the people of Northern Ireland have mostly moved beyond the Troubles that consumed them for nearly three decades. There is enough tension and hatred to bring back the worst of times if enough things go wrong. Yet even Ulster's pessimists don't expect that to happen. The institutions born of the 1998 Good Friday Agreement, like the Assembly, are still young and fragile. The popular desire for peace is not....

Life behind the headlines in Northern Ireland shows a society struggling for normality--and coming reasonably close. Educational standards are higher in Ulster than in the rest of the United Kingdom. Hospital waiting lists are shorter. For its size (1.7 million people), the province enjoys a rich cultural life, from searing political theater to regular concert stops by U2, Sting and Belfast's own Van Morrison. Devolved government, though messy, is universally popular. Gone are the days when Ulster was run by proconsul-like British ministers. Ever since the four-party power-sharing Northern Ireland government was finally formed in November 1999, a dozen ministers have had control of their own budgets, which were purposefully fattened by London to keep everybody happy. Guns and bombs once towered over dialogue and politics in Northern Ireland. They are still a huge factor, but in a crucially different way. IRA guns strengthen the hand of Sinn Fein, its political arm--but only as long as they are not used. And they have not been since the IRA announced a ceasefire four years ago. The 107 deaths since 1997 officially linked to the "security situation" were at the hands of dissident paramilitaries who have no links to mainstream political parties. Many were, in fact, not "political" at all; they were committed by drug traffickers or other organized criminals camouflaging their activities in bogus political rationales.

As the peace process rattles through yet another crisis, it is tempting to sort through the machinations looking for an obstructionist Arafat or an intransigent Sharon to pin the blame on. But Northern Ireland is sui generis, and that uniqueness gives rise to hope. Unlike the Middle East or Macedonia or other hot spots, here no outside powers or interests stand to gain from stirring things up. It's not just the people and politicians of Northern Ireland who have a deeply vested interest in something like peace. Backed by the United States and united on this matter as never before, the British and Irish governments have for a decade worked together to keep the peace process on track. This powerful combination of concerted interests has prevented Northern Ireland from collapsing into chaos before--and probably will do so again.

Oliver Kamm on New Labour and the Banks

2009-03-12T12:11:00.000Z

In a review in The First Post of Nick Cohen's new book, "Waiting for the Etonians," Oliver Kamm has a typically discerning view of the Labour Party's relationship with Britain's massive financial sector:

The great weakness of New Labour in economics was not its appreciation of the liberating power of globalisation. It was instead a failure to recognise that commerce is an interest group like any other. That misconception caused New Labour to be unaccountably docile before the City.

The task of government is to insulate the public space from sectional interests, and to create a framework of rules in which rights are protected and personal liberties maintained. It is a peculiarly destructive mistake to suppose that the task of government is to promote British commerce. That way lies the diversion of public resources to partial causes. And it is a mistake that goes some way to explaining why the global financial crisis has been peculiarly damaging to the UK.

The British economy is skewed to the financial services sector. There is nothing inherently wrong with this: it is snobbery to suppose that manufacturing matters whereas services do not. But the unspoken assumption that it is the responsibility of government to promote the interests of a particular commercial sector has had a terrible outcome. Financial regulation was patently inadequate. Banking supervisors had no conception of the systemic risks posed by the development of complex financial products.

Education Without Borders World Forum

2009-03-12T11:40:00.000Z

I'm moderating a panel at the Education Without Borders World Forum in Abu Dhabi on March 31. The topic is

"Education in times of economic downturn – a case for governments, companies and individuals to invest more in education, training, and research.”

If anybody has any thoughts on the subject, or has read something interesting on it, please let me know.