Britain’s Political Lunacy
British politics has been heating up recently.
Last week the national debt of the United Kingdom passed the £1,000,000,000,000 mark, roughly one fortieth of the annual GDP of the entire world. Despite four years of unprecedented peacetime deficit spending, nearly 4 years of 0.5% interest rates and two rounds of Quantitative Counterfeiting (or Easing as I understand polite society calls it) the economy is still doing …not too great. The official plan for economic recovery remains persuading people to borrow money in order to buy goods and services they can’t afford (“boosting aggregate demand”) and this is doomed from the start since the British households already collectively owe £1.5 trillion, a big part of the reason we’re in this mess to begin with. Orthodox Keynesians, noticing the failure of neoclassical-monetarist stimulus, suggest that the only way to boost demand is for the government to run even bigger deficits than the biggest peacetime deficits in British history. Since this is a bit like trying to cure indigestion by drinking battery acid, “austerity” (that is only increasing spending by a little bit) is still official policy, but the incorrigibly deluded segment of the electorate are quite fond of the argument for all out recklessness and may yet get their way.
Meanwhile, Europe is falling apart. Joining the Euro was supposed to improve the financial position of Mediterranean governments by allowing them to borrow at cheaper rates, backed by the might of the German economy. Step 1 of the plan went off without a hitch and the interest yields on Greek, Spanish and Italian bonds plunged. Unfortunately, instead of borrowing the same amount they would have anyway, but at cheaper rates, the governments of these countries took the opportunity to go on spending sprees and accumulated debt that they can never pay off. Now that crunch time has arrived, it turns out that German people are less willing to pauperise themselves in order to finance the lifestyles of their European comrades than some had, perhaps, assumed. Awkwardly, however, if they don’t pay, the European banks that own huge quantities of Mediterranean state debt go down the toilet and, apparently, that’s pretty much all of them, meaning financial apocalypse and grinding poverty for Germans either way.
The obvious way out of this is to get other people to pay and first in line is Britain. Since the previous three or four massive European bailouts have achieved precisely zip and Britain is already, as we have observed, flat broke twice over, this makes about as much sense as a man with fifteen maxed out credit cards and a mortgage taking out another loan so his even more deadbeat friend can take a visit to the dog track. One would have thought, then, that the British Prime Minister would politely decline the opportunity to take on debt we can’t afford to bail out a currency, the Euro, we are not a part of, but that looks increasingly unlikely.
Unfortunately, the British people in 1973 decided that their economic future would be best secured by joining a customs union run by venal oligarchs and ideological zealots intent on creating a continent wide super-state (because in a modern, dynamic global economy the key to sustainable prosperity is being really, really big, like Hong Kong and Singapore). The upside was that British companies got tariff free access to the European market; the downside was that they lost tariff free access to the rest of the globe and, for this mighty privilege, had to cough up a steadily rising annual tribute (or “contribution”). The predictable upshot of all this after five decades is that British industry is totally reliant on the European market and, consequently, the European Union has it in its power to catastrophically screw over the British economy should it ever decide to cease its support for the grand European Suicide Pact (“Integration” as my betters call it). This, along with the fact thatthe EU provides an inexhaustible fund of high paying jobs for retired politicians, means that, after a bit of meaningless posturing, more or less any demand by the EU is met with dutiful acquiescence.
Meanwhile, this tale of woe, decay and impending financial Armageddon provides the perfect opportunity for the leader of the Labour opposition, Edward Miliband, to launch a coruscating criticism of a government driving us towards bankruptcy, ruin and financial servitude to foreign nations in even worse straits. So what message has this tribune of the people got for the millions of Britons struggling with inflation and unemployment whilst the government takes on unsustainable debt to bail out foreign banks?
Some shops are selling chocolate oranges for half price. Not only this, but they put them by the tills. This is bad. It must be banned.
I wish I was joking, but in a struggling economy, the leader of a party claiming to represent the working classes is worried about the dark spectre of cut price citrus flavoured chocolate stalking this green and pleasant isle. Perhaps we should be thankful that he has not, yet, suggested a billion pound “War on Terrys”, replete with four new government departments and a mass propaganda campaign featuring giant chocolate oranges attacking hapless shoppers and forcing them to become obese through their mind-bending powers of “buy one get one free”.
Miliband is, by all accounts, an ideas politician, cut from a different cloth than the principle-free pragmatists of New Labour like Tony Blair, so why is he coming up with such specious guff?
There are two reasons for this. First, Miliband essentially agrees with all the policies of the current government, namely debasing the currency and shoveling money into foreign bankrupts. Maybe he knows that the only thing that can possibly fix the massive mis-allocation of resources arising from three decades of fiat money credit-boom is a cleansing recession, but is too scared to advocate it, more likely he believes in some voodoo-like theory attributing our woes to “animal spirits” and a lack of “confidence”. Either way, his only independent suggestions about economics so far has been to go full-on Mugabe, but since focus-group research came up with the conclusion that “the British people may be pretty credulous, but they’re not as dumb as you”, he has largely backed off and meekly supports the government in its various acts of insanity, as long as it is mainstream and centrist insanity. Chocolate oranges are the only thing he has left to talk about.
The second reason is that whilst leader of the opposition, in the days before the crash when otherwise normal people thought we could all become wealthy buying and selling houses until the cost of a cardboard box in a skip was 15 bazillion pounds, the now Prime Minister Cameron came out with this same bit of ridiculous tomfoolery himself. Strange as it sounds, by denouncing cheap food Cameron thought he was re-branding the Conservatives as a nice friendly party, a friend of hard pressed single mothers and immigrants whose main desire in life is, apparently, having higher grocery bills. People in the media bubble, however, thought this was a really spiffy piece of socio-economic criticism and so Cameron really has only himself to blame if after four years of having failed to “solve” this non-problem, his infantile, pathetic ideas have come to bite him in the posterior.
Now there’s a message here and it’s not just that British politics have been taken over by a gang of prancing simpletons on a mission to put political humourists out of a job by satirising themselves. Whenever I mention my support for Ron Paul in the forthcoming U.S. presidential election, the same thing always comes up, he’s “extreme”, “kooky”, “fringe”, “out there”, “not a serious candidate” or whatever and, whilst western nations pile up more unsustainable debt, the main discussion about the only man in politics with a serious plan to do something about it is about whether he did or did not edit some newsletters which contained such about half a dozen mildly offensive comments over a two decade period.
The jargon term for this is called ‘normalcy bias’, the deep sense that what most people say and do is fundamentally rational and that rare and exotic things are not. This is a natural and, indeed, indispensable part of being a human, if in every little decision we weighed up all the conceivable alternatives instead of just doing what everyone else does, we never get anything done. However, if you’re stuck in a lunatic asylum, this intuitive sense will let you down badly. As the global financial system meanders its way through slow motion breakdown, it is becoming increasingly clear that mainstream politicians are not just venal, dishonest crooks (that we can live with), but they are actually functionally mad, less like two bald men arguing over a comb than two men before a firing squad arguing about a chocolate orange.
What exactly will historians a hundred years from now say when they look back on this period and study politicians talking about moon bases, grandiose wind farms, Warren Buffett’s secretary and myriads of other trivial and/or delusional schemes of theirs whilst the national finances spun out of control? More importantly, what will they make of us for still voting for them?