Ukraine: what’s to negotiate?

As the Kremlin’s spokesman tells us – somewhat improbably – that regime change was never Vladimir Putin’s goal, the debate on whether Russia and Ukraine should be negotiating gets another bounce.

Depressing – but necessary – to bear in mind that a settlement will rest more on power than on justice.

Some other lessons from the conflict also seem to be getting neglected.

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Is the Bird free?

Well, Elon Musk certainly is.

The man is shaping as the Gordian knot cutter of the age. Or at the very least, the one able to set the most hares running.

This seems unlikely to get much credit from New Zealand’s authorities (read Thomas Cranmer on their differences).

But then not many people could – or would – take over a stagnant global media platform.  Then immediately fire its entire top team.  To be followed by the swift departure of half its workforce. Oh – and end home-working.

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Just don’t call it creative destruction, Rishi

The MPs of Britain’s ruling Conservative party don’t lack confidence.

Having defenestrated PM Liz Truss, the choice of the non-Parliamentary party as leader, they decided to take no more silly risks, and installed their own choice, former Chancellor Rishi Sunak, without troubling to consult the membership.

Time will tell if the members thank them.

Continue reading “Just don’t call it creative destruction, Rishi”

Courtesy is so important in politics

It is perhaps unfortunate that the UK’s Conservative party MPs have never thanked the party members for saving them from the disaster of Theresa May’s premiership.

Perhaps they weren’t even grateful, seeing how quickly they recoiled at the members’ choice of Liz Truss.  Truss – who announced on Thursday she would step down – wasn’t even given enough time to dig a shallow grave, in contrast to May, who was indulgently permitted to erect an elaborate mausoleum and find out that no-one else would join her there.

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Truss government definitely helping some people

Who would have thought a change of leadership in Britain could bring so many problems.  Wait a little and PM Liz Truss will be blamed for an outbreak of bubonic plague.

Still it’s natural that the people responsible for the problems accumulated over the last decade – and accelerated during Covid time – are seizing the opportunity to pin the blame elsewhere.

Indeed, if you’re hoping it’s just a British thing you should be very worried by the growing number of prominent international centrists using this opportunity to burnish their own defences (see Larry Summers here and Jason Furman there) at the same time as putting in the boot.

The latest niggle is over the policies of Britain’s (boring, long-term, stable, highly-regulated) pension funds and their (boring etc) investments in government bonds.  Those most eager to see the government’s incompetence in everything might ask themselves why an industry which deals in lifetimes is apparently having difficulty dealing with not-entirely unexpected short-term market fluctuations.

They might even get the depressing vibe that all this is only the beginning of a torrent of problems, all demanding government attention – which really means money. (Yesterday’s announcement that Britain’s health service is bleeding out – even before the Truss government does – can be seen as the latest instalment in a never-ending saga.)

And which will all need to be paid for – as the markets reminded Truss.

The irony of Truss trying to get ahead of the problems but instead being sandbagged by them is well covered by Allister Heath in Britain’s Daily Telegraph.  But amusing visibility hasn’t made them easier to deal with.

So, like just about everyone else, Britain’s government is spending too much; it’s also taxing too much but still not enough to stop debt growing.  Interest rates going up will make the problem worse, while hammering the living standards of mortgagors; but the lure of more directed credit will eventually hammer growth.  

Meanwhile, low levels of growth in output and living standards look like getting worse.  But governments have spent years encouraging distortions which are now revealing their destructive potential –  substantial decreases in the productive labour force post-Covid; a growth in union militancy; business investment driven by cosy regulatory partnerships rather than market opportunities.  It has reached the stage that when the market delivers a rare positive shock, as with some energy producers, the first and loudest cries are for a windfall tax.

Any challenge to this status quo was bound to generate howls from the many craving protection or other privileges.  But it was less predictable that it would generate civil war in Truss’s own Conservative party.

Because surely the milk can’t be unspilt.  If the government limps back to the current orthodoxy, they risk becoming a less-convincing version of the Labour party.

But the task of imagining – let alone creating – a growth coalition has been shown to be daunting.

Working people need to be brought to the realisation that otherwise the future looks like more taxes and worse services.  Right now many cling to the hope that a few more rules and a few more taxes on a richer neighbour might do the job.  

Business will only come on board when it makes more reliable long-term profits by taking risk, than from closing it down by regulatory collusion.  

Beneficiaries ranking low in the priority of the orthodox woke will need to understand that their votes are more valuable elsewhere. 

And realistically these changes of outlook will probably only come as the wreckage of existing policy drifts ashore.

The recent dramatic changes in the cost and difficulty of securing carbon-based energy have, for example, served to bring into clear focus the even greater costs of marching to a bureaucrat’s carbon-free specification.  Some are even starting to understand that on current trends such a policy means a real decline in the quality of life (it’s one thing to imagine living car-free; another to have it imposed by London’s current mayor).

Perhaps the Truss government needs a string of global economic disasters to start making its points for it.

We can be confident that Vladimir Putin and a few other folks will be looking to help out on that one.

Brotherhood of Europe but Sisterhood of Italy

All European elections are about Europe.

That’s one conclusion which might be drawn from the decimation (a fine Latin term that) of Italy’s governing class – and also the election of a centre-right coalition government – last Sunday.

To understand more, recall the previous election in 2018.  That also turfed out the ruling establishment (and again in 1994, where Italians opted for the fresh and untarnished Silvio Berlusconi, if your memory can bear going back that far).

Last time, the two biggest and newest parties – the right-populist League and the left-populist Five Star Movement – joined in an unstable coalition.

Continue reading “Brotherhood of Europe but Sisterhood of Italy”

Orban et urbi

Hungary’s PM Viktor Orban doesn’t get a great press – at least outside Hungary where it’s harder to arrange.

So broadminded diversity connoisseurs might profit from a recent speech at the Bálványos Free Summer University and Student Camp (a ‘large-scale intellectual workshop of the Carpathian Basin’ apparently).

It reads both well and revealingly; logically constructed and strategically coherent; its premises stated and conclusions drawn.  Perhaps he could give Zoom lessons to more gushy and less focused global peers.

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And then things seemed to stop

In Britain, there have been few manifestations of extreme grief at the death of Queen Elizabeth.  But there is a profound and shared sense of loss, that everything has changed, and all expressed in a controlled way.  How very British.

She had breezed past the markers of mortality for so long, that in a quiet moment one could almost believe that she was a truly permanent fixture.

But the singing of God Save the King on the accession of King Charles was a marker of finality.  And a reminder that one can’t step in the same river twice.

Only the very old will have distant memories of that anthem sung for King George.  But for the Queen, one suspects such memories were powerful.

Because her father’s evident sense of duty in taking up the burdens of the Crown – which contributed to his premature death and her early accession – were formative in her maturity.

How else might one explain her stubborn determination in carrying on in his tradition?

One can guess that Her Majesty felt she had a great deal to live up to.  Most would say she did it superbly.  

And now that burden falls to her son.

Burkean conservatism is all about reconciling continuity and change, when change is necessary and can be undertaken in accordance with the traditions of the country and people.

Queen Elizabeth embodied something about ‘us’ and on her death, we need to reconsider just what ‘we’ means.

That oughtn’t be too hard, should it?  After all, we know who we are.  Or we think we do.  We’re just not entirely sure about those others, who might also claim to be part of ‘us’.

Perhaps, just for a moment, reflection on her life and death can briefly refract our thinking and remind us that while it does seem impossible to love one another, we do sometimes need to try a bit harder.

And, at some point in the future, we can also reflect on confident republican assertions that the monarchy will not long outlive the Queen.

Put like that, it’s hard to be proved wrong.

But the new King’s honouring of his mother (and father) and devotion to her legacy suggests it might be worth waiting for the right opportunity.

Because a human being can embody something that otherwise defies expression. She (or indeed he) can make the intangible concrete in a different way to symbols like flags (New Zealanders might recall) or words in legal documents.  

Of course, in the beginning was the Word.  But don’t forget the still surprisingly widespread conviction that it became Flesh and dwelt among us.

Long Covid: less about health, more about politics?

Covid doesn’t grab British headlines these days.  Recent coverage instead picked up on heat-related deaths from July’s scorching weather.

Shame that there wasn’t more probing into that data set.  Because there was some good news.  The – deep breath now – age standardised mortality rates for England and Wales in the year to date are at almost their lowest-ever level.

That seems worth a bit of celebration, even if it is what you might expect with the pandemic’s passing.

But hang on, the Financial Times’s diligent John Burn-Murdoch has been able to dig a little more out of the government statistician’s recent mortality data.

He notes that excess deaths (i.e., those which exceed historically-based expectations), which were overwhelmingly attributable to Covid during the pandemic, are now increasingly non-Covid related.  

“Between July and December 2021, England recorded 24,000 more deaths than in a typical year, but only two-thirds of these could be attributed to Covid. And this year, less than half of the 10,000 excess deaths accrued since May were Covid-related. In total, there have been just over 12,000 additional non-Covid deaths across the two periods.”

Astute readers will no doubt be struggling to reconcile low and falling mortality rates with continuing excess deaths.  Among other things, it might have something to do with using the best years for the baseline.

Burn-Murdoch is particularly interested in the possible correlation between non-Covid excess deaths with growing A & E waiting times.    

All seems to be going well, until he leaps – perhaps a little too quickly – to a familiar villain, namely the government’s “… failure to address the failings of a chronically under-resourced and overburdened system”.

To be sure, the Socialist Worker was fulsome in its praise.  And quick to argue for strikes in Britain’s National Health Service as a final solution to the excess-death problem (this might be sounding a little more relevant to New Zealand readers).

But really, has there ever been a time when a free health system has not been “chronically under-resourced” and overburdened by its patients.

Before drawing a single striking conclusion from statistically-based calculations during an abnormal public health event with data attribution challenges, it might just be sensible to look a little more closely at the flexibility of the health system’s response in switching resources during and after the pandemic; and examining just how much of the continuing excess mortality is due to the delay and even cancellation of other treatments during the pandemic. Burn-Murdoch has an honourable record in this line of work.

It might be that the health business is one of many in which degraded service quality is symptomatic of policy-driven lack of flexibility and loss of productivity.

Which would have worrying implications for everyone.

In times of rising living standards – like those pre-Covid years – we all too easily forget that this benign state of affairs depends on us all getting more productive in our job; or, if we don’t, losing it and getting another; and then making sure our children get even more productive jobs than we had.

In most places, it seems to be dawning that something went wrong with this during the pandemic.  

The next shoe to drop is that adjustment to the new reality is necessary.  And it’s not feasible in the long run for the government to pay us for work we have not done and compensate us for changes we need to tackle ourselves.

Sadly, Burn-Murdoch’s article also reminds us that no government has had much success applying this analysis to the health sector.  Even so, the gradations of failure are quite important.

New Zealanders facing some whopping price / quality adjustments (for example, those desperate to get out of the country) might also wonder if their government has been slower than most in twigging the need for adjustment. Better hope the Ukraine war does good things for commodity prices to support the always “chronically under-resourced” health system.

Can we call you Liz?

Unpolished, not that intellectual, sometimes gawky, occasionally gaffe-prone and at times needing protection. Not many saw her as the next PM.

No, not Jacinda.  Liz Truss is the firm favourite to succeed Boris Johnson as Britain’s next PM in early September. And perhaps not someone who needs that much protection.

At first the smart money was on Rishi Sunak, the even smarter former finance minister.  He showed his political acumen with nuanced discontent for Boris’s increasingly wayward policies, before implementing them with gusto.  His political conscience emerged as Johnson’s administration hit the skids.

But while Rishi might be the choice of Conservative party MPs, they only get to choose the final candidates. The party membership makes the call.  And it seems Boris has exhausted the members’ tolerance for talented opportunism.

Hence the opening for a candidate who resembles a Thatcherite believer.

This ought to please everyone (except perhaps Mr Sunak).

Believers in twenty-first-century orthodoxy, the media and opposition parties get someone less elusive than Boris to hate.  Conservatives get a leader sympathetic to Lampedusa’s dictum ‘If we want things to stay as they are, things will really have to change.’

Because, in her simplicity, Liz might have an inkling of the nature of the political economy problem Britain faces.

For twenty years, political success has gone to those who say that government can solve any number of problems for a winning coalition of interest groups, whilst ensuring that no-one suffers pain from their own actions.

The result, at least in the UK, is a finance sector leaking productivity while conforming to American and European regulatory schemes; an energy sector working on a cost-plus basis for Whitehall’s central planners; state spending growth without delivering services customers want; and workers bamboozled into believing that reward doesn’t have to be linked to the financial value of one’s contribution.

It’s true that the British variant of Western orthodoxy has had impeccable cross party support:  starting with the Blair-Brown Labour party; carried on by David Cameron and Boris Johnson’s Conservatives; and even including the responsibility-shy Liberal Democrats under Nicholas Clegg for five years of coalition government.  (Clegg now earns a very handsome wedge from Facebook for unsuccessfully beseeching his European chums not to impose growth-destroying regulation on the tech sector).

Even so, it won’t be easy for the next Tory leader to proclaim that we all got that one wrong, and now things have to change.  She (or perhaps even he) shouldn’t expect credit for honesty. Even if contemporary thinking regards it as an act of kindness.

Particularly when the change is to let markets go to work encouraging productive activity, while destroying less-productive jobs in ways we can’t quite imagine, and at the same time cutting back the government’s responsibilities to a less ambitious (and properly costed) range of interventions.

Then things really could change for Britain.  Ditching wasteful infrastructure projects like high-speed rail; explosive growth in fossil fuel output to provide short-term energy security; more highly-paid tech and perhaps even finance jobs; a wrenching shrinkage of the tertiary education sector; bracingly high interest rates to squeeze out inflation and crush over-valued asset markets. These are just some of the possibilities.

Two difficulties supervene.

First, it would be quite a shock after all the years of soothing promises, and Liz doesn’t have a mandate for shock.

Secondly, markets will respond powerfully (they always do), but only after a lag and, crucially, when they believe policy is here to stay.

Which would give Liz three choices.

She can crack on with neo-Thatcherism and hope that developments in the world economy and politics (like a Republican party triumph in the November congressional election) prove her right before her government’s term runs out at the beginning of 2025.

Or she could follow the approach of Andy Farrell, the Irish rugby coach, and kick the ball back to the opposition.  While she would be unlikely to win an early election on a platform of pain, there is no obvious alternative government with credible policies. So she might hope to regain possession relatively quickly and with a much better field position.

But she will need a great deal of determination to avoid the third option. The rugby board’s dithering over All Black coach Ian Foster reminds us of the enduring attraction of least-change mediocrity, of reluctance to admit error, and unwillingness to do the right thing – until all the wrong options have first been thoroughly explored.