Junctions and Signal Failures

Sounds like something the Reverend Awdry would have written in one of his many Thomas the Tank Engine stories, be it either title or exclamation. The phrase is equally applicable to roads and this is where I shall begin this edition.

I was browsing on Twitter just now and saw a lot of the political types I follow talking about U-Turns and it got me thinking about the whole road metaphor that politicians use when rolling out their vision post-general election. Now, we all know St Margaret, in the Book of Conferences was disdainful of such things and so this is where I shall start. Here is the Political Guide to Motoring.

If, like Tony or Maggie, you prefer to go at high speeds with no reverse gear but plenty of room for manoeuvre until you reach your destination, then motorways are the way forward. The motorway building project crowned of course in the mid-80s with the building of the M25.

If you like going at a good pace having first given yourself plenty of time to work out your journey without the bother of going too fast and the possibility of a nice little country diversion along the odd B road, then by all means follow the Major road map.

If you're a follower of the Brown method, then you'll want lots of roundabouts; just because you need to try every available exit before making the wrong decision and crashing anyway, but trying to lay the blame on the motorist coming off the motorway exit.

Because the Brown method meant that there's now not much fuel in the car, the Coalition motorist will have to think a journey out very carefully, in order to maintain minimum consumption. This means jettisoning the caravan, slinging off the roof box, detaching the bike rack and the rear seats. You will also need to programme the sat-nav for all possible places to make U-Turns and avoid roundabouts. Make sure the radio works to give Nick something to do while Dave drives, and as there are no back seats anymore, Boris will still have to cycle.

What Will You Do When the Money Goes?

So runs the title of a song by band Milburn. Well if you're a Greek then go back to the money you used before you got yourselves into the mess you're in now. It'll hurt for a bit, but ultimately the pain will subside then fade. And if nobody knows what I'm on about at this point then please feel free to return to your cave in Tahiti and return your fingers to your ears and close your eyes. All better? Good. 

Now, to the main thread of the first part. Yes, first -- I'm going back to the old format. Got a fair bit to say this week. Might even throw in a third, I'll see how I feel. It's all a bit linked now I come to think of it. OK, the third makes up for missing a second bit out a fortnight ago. So -- launch. 

Now I've finished doing my impression of a writer on The Bridge, you're all coming with me on a tour of Greece. See the ruins, soup kitchens and elderly people rooting through dustbins. Yes, I know, and it's a fundamental reality for some now. Pensions aren't stretching as far, nor are salaries as we hear stories of parents giving their children up to an overburdened state. Welcome to Greece 2012; please don't expect much to be functioning at the moment. Disillusionment runs rife, as do rumours as to which party's going to get the plurality and whether or not Greece will still be in the single currency or not in four weeks. The Olympics seem to have been kicked off in good style by a run on the banks as well. The sad fact is that none of this is sustainable for much longer. Germany, swamping Europe as it does with its economic might (take note, would-be dictators. And indeed dead ones), might be able to buy Greece outright but the German taxpayers wouldn't stomach it. A recent BBC interview conducted the day of Francois Hollande's arrival in Berlin for his first summit with Herr Angela, showed the disdain some Germans have for their Greek neighbours and indeed their worries about what will happen should the Euro collapse. But they need not fear. Germany's economy is growing and doing well; they can send a clear message to the Bundestag about what should happen with their money. 

What should happen is that Greece be allowed to quietly slink out of the currency and then the continent be re-structured, as has been suggested before. A strong North (Finland, Germany, France, Belgium, Netherlands, Luxembourg and Austria) and a more manageable South (Portugal, Spain, Italy, Cyprus, Ireland, Estonia, Slovakia, Slovenia and Malta). Now, of course, there are two glaring anomalies there -- yes, Ireland and Estonia are with the South, despite being far to the north. That's a matter of geography, not economics. While there are fewer countries in the North, they are nonetheless the larger and more stable economies (Estonia could have some good potential, so we could soon move them North). They would be best suited to working out economic and currency difficulties because they have the necessary capital. I'm no economist myself, but I do recognise common sense when I see it and this is a possible as good ideas go. 

So what of the Greeks? Well, the drachma could be re-introduced and pegged both to the Turkish lira and the Euro. The former is the more preferable, as Turkey is close to Greece and their economy is also doing rather well. It would be weak at first, but nursed on both lira and Euro, it could grow to being sustainable in a few years' time. Certainly a weak drachma would encourage tourism, particularly from the eurozone as well as from Britain and the US. However, there are two things that could necessarily scupper such a plan. The first being that Greco-Turkish relations can be a little fiery from time to time and pegging drachma to lira could result in a heavy backlash. The second is that if Greece is permitted to leave the Euro, what would then be wrong with Germany saying "we're tired of supporting Portugal and Spain too. We might just encourage them to leave". In my view I see nothing wrong there because that's another two currencies to compete against the Euro and make it work harder. A third aspect is that the Greeks don't seem to want to leave the single currency, but don't want to obey its rules. It's just so hard to come up with sensible policies in an area where one size only fits Germany. 

Speaking of sensible policies (and returning home now), I read something that piqued my interest and seems to have been picked up in a few publications. The proposal out today from the TaxPayers' Alliance and Institute of Directors suggests that, while cuts would still need to happen until 2020, growth would be stimulated by 8.4% over 15 years. Doesn't sound like much, I know, but consider what would be needed for this to happen; scrapping air passenger duty, abolition of national insurance, abolition of stamp duty on shares, the abolition of corporation and capital gains taxes to replace them with the 30% rate and include rent in that as well. Council funding would be cut, but local authorities would then be able to raise revenue through local income and sales taxes. Personal rates would only be 30% as well, with a personal allowance of £10,000. 

While the deficit would increase by £49.1 bn in the first year, annual borrowing by 2017 would fall by £35 bn. However this would be offset a little by people having more money in their pockets to spend on things they know they want. Sales taxes might rise to help cover the cost, but in large parts of Scandinavia this has been the case for a long time. As Tim Worstall pointed out (see links below), Sweden has no inheritance tax, gift tax or wealth tax and all the countries (who, if they had the Euro, would be in the North) enjoy relative prosperity, despite having low personal and corporate taxes. Even though they have socialised healthcare, there is no such thing as a Swedish or Danish NHS; it all comes from the local tax pot. Amazing.

Returning to the Olympics and now leaving the world of finance. The Olympic torch finally reached British soil on Monday to start its tour, which now only has 65 days to run. If republicans all want to escape the Jubilee, then can I please escape the blasted Olympics (that cave in Tahiti I mentioned earlier would do nicely)? I don't mean to be unpatriotic, in fact any of my friends reading this (to whom I haven't already given my opinion on the stupid thing) would probably be shocked at my lack of enthusiasm. Not that my deep-seated antipathy towards sport has anything to do with it. Not in the slightest, I am perfectly comfortable admitting that I don't much care for sport at all. Never have done. It's just all the hype and how clearly anyone who doesn't like the Olympics must be some kind of lunatic. I just fail to see why there is so much enthusiasm for a thing which is only going to cause us so much embarrassment. We're not going to win, people, we might come a decent third or fourth but that's it. It's a waste of effort and money for something which is only going to be here briefly and will do little by way of legacy.

http://blogs.telegraph.co.uk/finance/timworstall/100016459/lets-give-polly-toynbee-the-britain-she-wants/

You Give Me Fever

Election fever, that is. It's been sweeping Europe quicker than the Black Death and certainly the last word has been applicable. On Thursday, the UK saw elections in local authorities and devolved parliaments, yesterday the French, Greeks and Russians all went to the polls to elect (or re-elect) their leaders. The results were interesting. 

The UK election results were, if I'm honest, to be expected. The SNP made gains in Scotland, the Tories lost seats in most English authorities and Labour swept the board. The Lib Dems made some sort of showing, but again, the results were as expected. The biggest sigh of relief was breathed in London when Boris Johnson was re-elected as mayor. This, of course, throws up some problems for the Coalition. Boris is a Tory, but he made little of his political credo during the campaign. He managed to show his political colours without making it explicit and therein lies his success. He has therefore shown that to be a Conservative and be ultimately electable is still possible, without resorting to the cheap showiness of social democracy that has clearly pervaded thinking within Tory HQ and gathered pace since Andy Coulson left Downing Street (see previous entries). Some are touting Boris as a possible leadership candidate and I for one would not be surprised if he threw his hat into the ring before his mayoral term is up. We need more of his kind of authenticity; the greasy pole might be there for the climbing but that doesn't mean everyone should try it. This means you, Nadine Dorries. We are not the Labour Party, no matter how much we think we ought to act like them to gain electoral success. 

I'm going to swing south and run forward in time three days to yesterday when France went to their second poll to elect a new president, which they did in style. Francois Hollande, known and loved Socialist, is the new incumbent and given Nicholas Sarkozy the epithet of being the second president in the Fifth Republic's history to not win a second term. This means that those with a great interest in Europe will be watching very closely, as the fiscal compact so carefully worked out by Sarko and Auntie Angie is re-negotiated to suit a slightly altered relationship between France and Germany. I for one think that it might mean the direction of the EU will change and for the better, although I might be a little bit too optimistic in joining the likes of UKIP and the Daily Express in gleefully hurrying in the end of the EU (although it's no bad thing, but wait for my next paragraph). Wait and see ought to be the mantra for the next couple of months, especially since the French must elect the National Assembly. 

Further south lies Greece. Little bit of a cracked urn over the last year and a bit, this cradle of democracy. From austerity measures to being handed a government by Brussels, there seems to have been little hope for this plucky little southern European nation. And now it seems that the Greek people have rejected their situation and sent a loud and clear message to the political class; it's your mess, we're ordering you to clean it up. The centre-right New Democracy seems to have won a slender majority over socialist PASOK, but nobody has enough seats for an outright majority, so it seems a coalition is in order. They have three days before another left-wing party is given a crack. If they have no government by this time next week then all I can say is God help the European project. So many things pinned as pivotal for the EU have happened in or around Greece and the Greek economy that it seems only natural that the two most recent elections should also have a bearing on the future of the great socialist project nobody seems to want any longer.

Bearing further north and further east we now come upon Russia, the great Slavic rotten borough. They operate their democracy as anyone else, with each person having one vote (that is, of course, people with sensible democracies. None of this AV nonsense. But anyway). Unfortunately the one man entitled to have the vote is Vladimir Putin, who has fiddled about with the Russian constitution so much that he will remain in power until 2018, having first been on the stage as Acting President in 1999 before being officially nominated to the post the following year. This is certainly the longest any elected politician in Russia will have been in power and almost edging on Stalin's record. If he believes he has the answer to Russia's slowing economy, having helped bring it up to standards currently enjoyed in Poland, then I say go ahead. I'd also criticise keeping someone in power for nearly two decades, not even Maggie managed that (although if somehow Kinnock and half the front bench team had been arrested when they went after the Poll Tax protesters, we might be telling a different version of our island story). It's rather sad that since the era of glasnost and perestroika there has been little movement to reform the Russian constitution other than Putin's machinations to maintain his iron grip on power. It will be most interesting to see who comes forward as a likely candidate for 2018.

I haven't much else this week, I know these come in a two-hander, but what I've given you should hopefully provide food for thought. More in the coming weeks, of course. Lord help me when Silly Season comes round.