by Alex Evans | Jan 14, 2008 | Global system, UK
Sterling’s down nine per cent against the euro since November, which as the FT helpfully reminded us this morning is
a rate of decline not far off that seen during sterling’s enforced exit from the European exchange rate mechanism in 1992, when it fell 11 per cent against Germany’s D-Mark.
Ralph Atkins and Chris Giles continue:
The list of causes is long. UK interest rates are expected to be cut, Britain’s trade position looks increasingly precarious, capital inflows from companies buying UK assets have slowed sharply, and a perception of poor economic management has grown since the credit squeeze hit the world in August.
But most economists think the adjustment is necessary even if it hurts in the short run. The UK’s current account deficit is seen as increasingly unsustainable; it is now the largest among the Group of Seven leading economies after big downward revisions to foreign income at the end of last year.
Over the course of today, news also emerged that annual factory gate inflation reached a 16 year high during December, as the fall in the value of the pound made imports of food and fuel even more expensive. Meanwhile, Britain has slipped from fifth to sixth place in the world’s rich list: the French are now worth £70 billion more than us (the top four remain the US, Japan, Germany and China).
Sigh: more chickens coming home to roost. National Institute of Economic and Social Research director Martin Weale comments that sterling’s hitherto sustained strength had fooled people into believing that
you can run the economy permanently on the back of consumer spending and rising land prices.
by Alex Evans | Jan 12, 2008 | Climate and resource scarcity
Tom Engelhardt at The Nation has a good question:
Why is it that, except at relatively obscure websites, you can hardly find a mainstream piece that mentions more than one drought at a time?
Elaborating, he quotes Tim Flannery, author of The Weather Makers, thus:
It’s not just the Southeast of the United States. Europe has had its great droughts and water shortages. Australia is in the grip of a drought that’s almost unbelievable in its ferocity. Again, this is a global picture. We’re just getting much less usable water than we did a decade or two or three decades ago. It’s a sort of thing again that the climate models are predicting. In terms of the floods, again we see the same thing. You know, a warmer atmosphere is just a more energetic atmosphere. So if you ask me about a single flood event or a single fire event, it’s really hard to make the connection, but take the bigger picture and you can see very clearly what’s happening.
Engelhardt himself resumes –
If drought–or call it “desertification”–becomes more widespread, more common in heavily populated parts of the globe already bursting at the seams (and with more people arriving daily), if whole regions no longer have the necessary water, how many trails of tears, how many of those mass migrations or civilizational collapses are possible? How much burning and suffering and misery are we likely to experience? And what then?
These are questions I can’t answer; that the Bush Administration is guaranteed to be desperately unwilling and unprepared to face; and that, as yet, the media has largely refused to consider in a serious way. And if the media can’t face this and begin to connect some dots, why shouldn’t Americans be in denial, too?
But there’s a small sign of mainstream media beginning to sit up straight: a new site on water scarcity, Circle of Blue, set up by a small network of like-minded journalists. One to add to the watch list…
by Alex Evans | Jan 12, 2008 | Europe and Central Asia, Global system
That’s the scenario posited by in an article today by John Dizard, who’s toying with scenarios in which gold would do well. His reasoning goes like this:
Consider … the plight of Spanish property owners, and the workers and consumers who have prospered and borrowed through that country’s boom. According to a European Commission report issued in the spring of last year, Spain, Portugal and Italy have lost between 15 and 20 per cent of their relative competitiveness since euro entry.
Let us say Spain wanted to increase exports to offset the loss of domestic demand because of a contraction of credit available to finance construction. To accomplish that within the eurozone would require a magical increase in labour and capital productivity. Alternatively, the Spanish could impose on themselves a sudden, dramatic drop in nominal wages and prices. That would, in turn, make much of the country’s private debt unserviceable.
Or – whisper it – Spain and the other euro area current account deficit countries could merely contemplate leaving the eurozone to buy market share for their goods and services with double-digit devaluations. Then bank account holders in Spain, Ireland, Portugal, Greece or even Italy would have a Northern Rock-like incentive to move their cash rapidly to Germany or France. The resulting bank funding crisis for deficit countries, and prospective asset losses for surplus countries, does not bear contemplation.
That is why the ECB could reverse its tight policy rather more quickly than is now discounted in the market. There is a limit to how much monetary policy can be allowed to squeeze leveraged, weak economies. And monetary support for faltering credit will power the next big run for gold.
by Alex Evans | Jan 11, 2008 | Influence and networks, North America
As Steve Benen noted yesterday on The Carpetbagger Report, “it’s become a little too common for Republicans to use torture techniques as a litmus test for Republican fealty”. Here, for instance, is the National Review’s Kathryn Jean Lopez, quoted in Benen’s post:
I don’t see how [John McCain] wins the Republican nomination. I’m second to none in praising him on his surge leadership. But on a whole host of issues — including water boarding, tax cuts, and the freedom of speech — he’s not one of us.
All of which raises the question – how on earth did torture become a key component of serious GOP credentials? Prior to September 11, it would have been bizarre for even heavily hawkish Republicans to come out openly in favour of torture; it would have been fundamentally at odds with the basic ‘land of the free’ frame of reference that tended to accompany such politics during the Cold War and thereafter. Sure, hard-edged hawks might tacitly have supported torture in some circumstances – but openly? Not a chance.
Nor do I think that the fact of 9/11 itself really explains why Republicans would start to support torture openly as a qualification for being ‘one of us’. Yes, the attack gave America a shock; yes, it lit the touchpaper of a politics of fear, and of retribution towards ‘America’s enemies’. But remember the widespread narrative of ‘they hate us because of our freedoms’ (questionable, but leave that aside). In that light, it’s still hard to see why even tough hawks would want to be seen to be supporting torture.
No, I think the real answer lies instead in the astonishing polarisation of US politics – the roots of which lie much further back than 9/11. My hunch is that open Republican support for torture has grown in direct proportion to open Democrat opposition to it – because if the Democrats get this fired up about it, then it must be the right thing to do.
I suspect that there’s some kind of law of political system dynamics here, whereby if a political system has moved from a centrist consensus to a bifurcated / polarised system, then a force on one wing will naturally lead to a countervailing force on the other – with an attendant risk of positive feedbacks / amplified extremism on both wings. (In this sense, the red / blue divide in the US can absolutely be compared to the ideological divide between sacred and secular worldviews – look at the Danish cartoons episode.)
In such a system, it’s easy for a few key dividing lines to become generally agreed on by both sides as an efficient tool for differentiating ‘one of us’ from ‘one of them’. In other words: how did torture become a key identification issue for Republicans? Because the Democrats championed it first as a dividing line.
Of course, I’m a hundred per cent with the Democrats (and John McCain) on the issue of torture. I just think that opposition to it would have been more effective had it come from a centrist institution, respected by both red and blue, rather than from one wing of a system at war with itself. The most worrying thing about the US is that it seems – from this side of the Atlantic, at least – to suffer from a deficit of such centrist institutions.
And that’s why John McCain is a valuable candidate. It may be pushing it to call him ‘centrist’ – but he blurs the red / blue battle lines, and he’s perceived by both sides as having integrity. In their different ways, John McCain and Barack Obama – with his language of ‘hope’ and ‘change’ – both represent an acknowledgement of the need for some kind of rapprochement between red and blue America. But out of the two, it’s John McCain who currently looks the more credible prospect for achieving that goal.
by Alex Evans | Jan 11, 2008 | Cooperation and coherence, Off topic
David’s going to laugh when he reads this post: he lent me season 1 of The Wire three days ago, and already I find myself compelled to write a post explaining why you too should rush out to secure the DVD (assuming, that is, that if you’re a Brit, you haven’t already been watching it on FX).
Here’s why it’s so superb. First and foremost, because although it’s a gritty cop show set amid mean streets in Baltimore, this is fundamentally a show about institutions and tribes. The show’s creator, David Simon, puts it like this:
It’s about how institutions have an effect on individuals, and how…whether you’re a cop, a longshoreman, a drug dealer, a politician, a judge [or] lawyer, you are ultimately compromised and must contend with whatever institution you’ve committed to.
In this, it succeeds fantastically. All of the characters’ actions are driven by institutional incentives and tribal loyalties that frequently make no rational sense, yet perfect human sense. I kept finding myself nodding, seeing patterns of behaviour in the show’s Baltimore Police Dept that were the very same issues you come across in large public sector organisations here in the UK. Moreover, Simon says, it has a different perspective to most crime shows in that
The best crime shows…were essentially about good and evil. Justice, revenge, betrayal, redemption. The Wire, by contrast, has ambitions elsewhere.…Specifically: We are bored with good and evil. We renounce the theme.
The result: morally ambiguous characters who are utterly believable. And then there’s the sophistication of the narrative structure. No cliff-hangers at the end of episodes. Long story arcs that run through whole series (compare and contrast with the awful disappointment that was the end of series 1 of Heroes, when it became clear that the script was being made up by a committee as they went along – wrapped up as it was in a hasty, slipshod shitheap of a final episode rather than any kind of crescendo of plot resolution).
So good is The Wire that the Los Angeles Times devoted a whole editorial to praising it, saying that “even in what is generally acknowledged to be something of a golden era for thoughtful and entertaining drama, The Wire stands out”. More lyrically, here’s the Guardian’s Charlie Brooker, talking on BBC4’s Screenwipe:
The best show of the last 20 years is an HBO show called The Wire. The Wire is quite simply a stunning piece of work … it physically pains me to use this phrase, because anyone who uses it sounds like a tosser, but it is physically multilayered; it is just fucking brilliant.
