Heroes: Armageddon Time 

 

‘A lotta people won’t get no supper tonight 

A lotta people won’t get no justice tonight’ 

 
There really is now a lame duck government, that refuses to give up. Worst still, we could have 6-more months of this. 

Immigration still hogs the headlines. Sunak finally got Rwanda fiasco underway, much to the  delight of the Home Office who are launching  immediate operations to detain asylum seekers across the UK, with plans to detain asylum seekers who turn up for routine meetings at immigration service offices or bail appointments as part of a nationwide two-week exercise. 

Detainees will be immediately transferred to detention centres, which have already been prepared for the operation, and held until they are put on planes to Rwanda.  

A possible all-time low were last week’s comments from were Ben Habibs’ (deputy leader of Reform)  who favours letting illegal migrants drown. With hindsight right-wing politicians have been building-up to comments of that nature.  
 

‘A possible all-time low were last week’s comments from were Ben Habibs’ (deputy leader of Reform)  who favours letting illegal migrants drown’

 
The Tories have been the worst offenders. The supposedly moderate David Cameron, referred to people crossing the Mediterranean as a ‘swarm‘. Former Home Secretary Suella Braverman,  said there was an ‘invasion on our southern coast‘; and former immigration minister, Robert Jenrick claimed people crossing the Channel had ‘completely different lifestyles and values‘ to people in the UK. 

This weekend’s Tory-to-Labour defector Dan Poulter referred to the current incarnation of the Conservatives as ‘a nationalist party of the right’.  

The other right-wing party, Reform, has built its hardcore policy platform around the idea of ‘net zero immigration’. 

The basis for this increase in racism goes back some 15-years, when there was a surge in support for the neofascist British National party (‘BNP’). At the general election of 2010, they proposed ‘a halt to all further immigration’, ‘the deportation of all illegal immigrants‘ and the end of what it called ‘the ‘asylum’ swindle‘. As well as taking Britain out of the EU, it said it would repeal ‘far-leftist social engineering projects, such as the Equality and Human Rights Commission, aimed at enforcing multiculturalism‘, and that it rejected the ‘theory‘ of climate change.  

As this column has stated so often in the past, mainstream parties, when under pressure, turn to the policies of extremists, in doing so they give credibility to both the proposals and the politicians spewing this bile.   
 

‘mainstream parties, when under pressure, turn to the policies of extremists, in doing so they give credibility to both the proposals and the politicians spewing this bile’

 
In 15-years this racism has left the pubs, football terraces, and white supremacist meetings, and is now embraced by a millionaire property investor who was born in Pakistan, came to the UK when he was 13, and is now an enthusiastic member of a party with too much influence. Their views are endorsed by the media too;  GB News, and the Mail and Telegraph provide Reform with influence far out of proportion to whatever share of the vote it manages to attract.  

The UK isn’t alone in succumbing to this poison, ultra-nationalist and populist-nationalists are now leading the polls in Italy, the Netherlands, France, Austria, Hungary and Slovakia, and running second in Germany and Sweden. There are two hard-right groupings in the European parliament – Identity and Democracy and European Conservatives and Reformists. Between them, they could secure as much as 25% of the June vote.  

In addition, these hardline factions are forcing the hand of the traditional centre-right parties, who, in turn, are embracing ever more extreme anti-immigration, anti-trade and anti-environment positions. 

Europe, especially Germany, continues to suffer from near-zero growth and stagnation in terms of living standards. A decade of consistently low growth, has left the continent divided between an optimistic but declining minority, and a growing, pessimistic majority who see life as a zero-sum game, believing that their generation will be worse-off than their parents.  
 

‘the continent divided between an optimistic but declining minority, and a growing, pessimistic majority who see life as a zero-sum game, believing that their generation will be worse-off than their parents’

 
Only 26% of French people and 33% of Italians think they will do better in future, according to a seven-nation poll by Focaldata. In the Netherlands and Germany, as many are pessimistic as optimistic. While Ireland and Sweden top the league for optimism, only 46% and 40% respectively feel they will fare better, with 39% and 35% taking the opposite view. In no country are a majority of people optimistic about their future. 

Their pessimism has been created by low-growth creating a doom loop as pessimism begets a blame culture, the more we blame others, the more pessimistic we become. People convince themselves that because their economy is so weak, they can only improve their lot at someone else’s expense, voting for parties that specialise in apportioning blame on minorities, such as immigrant . Economically, these parties offer nothing in terms of policies to generate long-term growth, meaning that the zero-sum politics exacerbates the downward economic trends, which, in turn, intensifies and widens the appeal of zero-sum thinking. 

To escape this doom loop new investment in technology, clean energy and medical advances is required. Europe’s problem is that this requires investment which is made impossible by the European growth and stability pact rules. These cap member states budget deficits at 3%, with no distinction between public spending on consumption and spending on investment.  

In addition, Germany has a debt ceiling enshrined in its constitution which limits the government’s structural deficit to 0.35% of GDP. As a result, Germany is facing severe cuts in public spending which is preventing it updating country’s beleaguered infrastructure, and its transition from heavy engineering to IT and AI-based industries. 

These foolishness of these financial constraints are the basis of the theory of  Modern Monetary Theory, as proposed by Stephanie Kelton, a former economic adviser to Bernie Sanders. The theory is based on the belief that there is no financial constraint on government spending; money can be created and invested so long as there is capacity in the economy to absorb the cash. If not, inflation will follow. This is little different to what John Maynard Keynes wrote in his 1940 book, ‘How to Pay for the War’. The theory is not just about deficits, as it states that a strong exporting nation should pursue fiscal surpluses. 
 

‘To escape this doom loop new investment in technology, clean energy and medical advances is required’

 
Labour’s shadow chancellor, Rachel Reeves, seems to have caught the ‘I am not really Labour’ disease, and is proposing to follow Tory policies of committing to spending now that is ‘paid for’ by austerity later. Both major parties say deregulation would crowd in private investment and the state could capture the ensuing productivity gains. The Tories would use the proceeds for tax cuts whereas Labour would spend them on public services. This same failed strategy we have pursued since 2010. 

Whilst countries  such as China subsidise to the point of undercutting Europe on electric cars, batteries and other new technologies, and Bidenomics is running huge deficits that are stimulating the economy, the UK and Europe is stuck in a fiscal doom loop. France and 11 other European countries are unable to invest more because they are already running allegedly unsustainable deficits. 

Economically, Sunak’s only claim to glory is taming inflation, which wasn’t the result of government policy but the BoE raising interest rates, and energy prices stabilising. 

Apart from a few commodities sold by highly competitive retailers, such as butter and milk, most goods are not falling in price, and the cost of services are still rising by 6% a year, according to the latest figures from the Office for National Statistics (ONS). 

Inflation is far from beaten, farmers are warning that food prices will rise after a long period of record-breaking rain. The freeze in income tax thresholds means higher rates for millions. Council tax is increasing at an unprecedented pace. Meanwhile, the slow-motion collapse of Thames Water suggests a huge bill is on its way, either to its 16 million customers in southern England or to taxpayers in general.  

Two years ago, an ONS study of British inflation since 1950 found that, while its infamous surge in the 1970s was largely caused by ‘sharp increases in world prices for food and other commodities‘, since 1989 ‘the biggest driver … has typically been housing and household services, which includes gas and electricity prices‘. By doing so much during the 1980s to create today’s property-obsessed, profiteering economy, Thatcherism did not ‘defeat’ British inflation, as she promised, but made it worse in the long run instead.
 

‘Thatcherism provided a feelgood factor for millions of middle-income British consumers but that is fast disappearing’

 
Thatcherism provided a feelgood factor for millions of middle-income British consumers but that is fast disappearing. It was built partly on the powerlessness of factory workers in poorer countries, and it was probably environmentally unsustainable, yet so much of our society, from shopping-dominated city centres to Sunday trading, was built around it. By comparison, the rich have continued to spend freely throughout the cost of living crisis. 

Staying with the rich, we turn to the owners of the water companies, who, since privatisation in 1989, have pocketed £78bn in dividends. At the same time, they have saddled the providers with £64bn of debts. 

Analysis in 2022 found that 72% of the water  companies industry in was at that time in foreign ownership. All Thatcher’s ‘shareholder democracy’: achieved was  to allow power and profit migrate offshore. 

Back in 1989 the commons heard two contradictory opinions; Labour MP Bob Cryer said, ‘Millions of people, over the years, have bought and paid for a comprehensive system of water supply and disposal through the rates. When items are sold off which people already own, it is regarded as legalised theft.’ Thatcher replied that ‘water privatisation I believe will go very successfully indeed. And perhaps therefore we had better wait and see so that we can pontificate in the light of the facts.’ 

Now we know what was right 

Alongside the pollution water companies such as Thames have provided, there is now the fear  that its financial collapse could trigger contagion, leading to a rise in government borrowing costs not seen since the chaos of the Liz Truss mini-budget. 

Such is the Treasury’s concern about this contagion, that they believe Thames should be renationalised before the general election. 
 

‘Unless something gives, a low-growth UK and Europe will remain stuck in its rut, and the populist xenophobes will triumph’

 
Both the Treasury and the UK’s Debt Management Office fear that, unless the UK’s biggest water company is renationalised as soon as possible, ‘prolonged uncertainty‘ about its fate could ‘damage confidence in UK plc at a sensitive time‘, with elections in the UK and the US later this year. 

There is a government contingency plan in-place, known as Project Timber, to renationalise Thames via a special administration. This could lead to the bulk of its £15bn of debt being moved on to the government’s balance sheet. Thames’ investors have refused to pump more money into the struggling company amid a standoff with the water regulator Ofwat. 

Some lenders to its core operating company could lose up to 40% of their money under the plans, a move that officials believe marks a careful balance between managing public outrage at the water company’s many failures and the need to sustain investor confidence in the UK. 

Privatisation sums up all that have been wrong with economic policy since 1980. It highlights how capitalism has failed the majority, sowing the seeds of desperation that allow hard-right politicians to flourish.    

As the hard-right becomes more powerful, essential green investment will fall down the agenda as anti-environmentalist parties gain an upper hand. Protectionism will become the order of the day with trade wars, which hit Europe harder than anywhere else. Unless something gives, a low-growth UK and Europe will remain stuck in its rut, and the populist xenophobes will triumph. 

‘Bind me, tie me 

Chain me to the wall 

I wanna be a slave to you all’ 

What a mess; water mess:

‘It’s samo, samo, as we bounce along the bottom.

The right continues to flourish as people, made worse off by their policies, continue to buy into financial discipline and austerity, and accept that immigration and trendy wokist’s aided by the establishments are to blame for all their problems.

It’s complete madness, after 40-yrs if these policies haven’t yet worked by now, they aren’t going to.

Perhaps the actual question is; have they really not worked?

Those in power, and those that promote and support them have done well. The majority, who have suffered at their expense, are collateral damage. The right has it worked out, keeping feeding the masses raw meat, or immigrants it’s much the same thing, and they will have an outlet for their anger.

This is evidenced by Ben Habib, an immigrant from Pakistan who has done rather well for himself as a property investor. For him it has worked. Now, to maintain the status quo, he wants a few immigrants drowned, so the masses will miss the fact that he has made out at their expense.

People often cast a jealous look at the US. But, in truth, they have the economic success we only talk about. The S&P 500 doesn’t outperform the FTSE100 it overpowers it. Biden  has worked out how to stimulate the economy and deliver levelling-up; it’s called investment, spending, Keynesian economics.

We trundle along in the slow lane because the “real” establishment, the Tories, the hard-right and their cronies, like it that way.

 Lyrically, we start with “Armageddon Time” by the Clash which, although it featured on the Album “London Calling” and was the B-side to the single “London Calling”, is a cover of the Willi Williams song.

To finish, we have X-Ray Spex and “Oh Bondage Up Yours”, which features possibly the greatest opening lines of any song…” Some people think little girls should be seen and not heard, But I think, “Oh bondage, up yours”, “One, two, three, four”. Enjoy!’

 

@coldwarsteve
 

 

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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