I’ve long been an adherent of what I call, Up-To-A-Pointism.

If something works, it only works up to a point. Thereafter it yields diminishing returns, followed by negative consequences.

Government intervention is like that, as are free markets. Both have a limited bandwidth within which they operate well.

Politicians are largely unaware of this iron rule of nature. They should be. Our future rests on it. It is vital that attempts are made to determine the limits that constrain every policy decision.

The Alan Greenspan era, which finally collapsed in upon itself on August 9 2007, was the last hurrah of Reaganomics: scant regulation allied to free market economics, especially in financial markets.

It passed its point of usefulness around the turn of the century when some Asian countries were shipwrecked by massive money flows in and out of their economies. By then, the essential principles had become inflexible dogma, crowding out necessary evolution of the system.

The Left always brings settled dogma into government. Its methods are already written down by past socialist heroes, so they must be true, mustn’t they? That’s why the Left invariably fails in office.

Blair and Brown knew that in 1997. New Labour presented itself as the champion of free financial markets, just as the notion was beginning to shapeshift into corrosive insanity.

In the U.S., George W. Bush, thanks to Dick “deficits don’t matter” Cheney, was trapped by the dogma of the Right and its sorcerer’s apprentice, Alan Greenspan. A little Up-To-A-Pointism would have gone a long way at that time.

The same can be said for globalization. Up-To-A-Pointism should have been applied long ago to the idea that “the world is one and the same.” In political and economic terms, it isn’t. It never was, and it never will be.

Today, Gordon Brown’s shiny new big idea — riding on his newly-found sense of invincibility — is to summon a meeting of “world leaders” — shades of Bretton Woods — to reshape the global system in accordance with the old puritan’s post-war, iron-clad viewpoint.

So it’s back from Greenspanomics to Truman and Attlee — or Churchill and Roosevelt if you believe Gordon Brown. Remind me, what happened to the Bretton Woods agreement on global fixed exchange rates? I seem to recall it foundered irretrievably in 1971.

New dogma is replaced by the old stuff. Democracy is ditched for governance by foreign leaders, unelected by us, and unaccountable.

On a global scale, and at regional level — the EU in Britain’s case — we are ordered about by layers of oligarchy, lacking knowledge of who we are, and uninterested in our wishes and cultural preferences.

More than anything now, the world needs Up-To-A-Pointism to refresh its grasp of reality and to grapple back our basic freedoms from the hobgoblins who would rule over us.

If we’re looking for an iconic figure for the new age of austerity, it should be Edmund Burke not Leon Trotsky.

John Evans

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The crashing of America’s giant investment banks is beginning to sound like an Amazonian logging operation.

In quick succession Bear Stearns, Lehman Brothers and Merrill Lynch have all gone south to the lumberjacks. Of the Masters of the Universe, only Morgan Stanley and Goldman Sachs survive.

For how long?

With CDOs (Collateralized Debt Obligations) having poisoned the world’s financial system, like seeping toxic waste, a new danger is now forming on the horizon.

CDSs (Credit Default Swaps — insurance policies for bonded commercial IOUs), which are out there in their billions, are beginning to crumble in the face of massive defaults.

The world’s biggest insurer AIG is already in Lehman-style retreat — its shares plummeted by 70 percent in early trading yesterday — as is the monoline AMBAC. The CDS crisis is now with us. When optimistic Anatole Kaletsky of The Times (London) says we are getting into 1930s territory, you know we have a serious problem.

So what precisely are CDSs and how will their demise affect most of us in coming days, weeks, months and years?

George Soros estimates that the value of CDSs now equals half of U.S. household wealth, an almost unimaginable number, now put at $58 trillion.

CDSs are hedges made by investors in case a company defaults on its debts. In effect you bet on a company failing to protect your investment in the event it does just that.

The problem arises when large numbers of companies go bust and the CDSs themselves become worthless since no-one can pay them out.

A CDS seller undertakes to compensate a buyer if a corporate bond defaults. Since there is no limit to the size of cover taken out, the value of CDSs often exceeds a company’s debts.

Moreover, many CDSs are bought with borrowed money so the infection of the system drives deep into the financial heartland like veins in a blue cheese.

The danger now is debt deflation: a rapid reversal of debt issuance, or deleveraging as it is called.

Tim Congdon of the London School of Economics says, “Banking system capital is being wiped out. The risk is that this could lead to a contraction of credit and set off a self-reinforcing downward spiral, leading to the sort of debt-deflation we saw in the 1930s.

“It is already clear that money growth has ground to a halt over the past three months. We must prevent it from actually contracting. If the Fed and European Central Bank don’t cut interest rates soon, it is going to be a problem.”

The Bank of England’s rigid inflation target, set by Gordon Brown when inflation was low, is now a millstone around Governor Mervyn King’s neck at a time when energy, food and commodity price rises are being imported from global markets.

The Eurozone is similarly caught in a time warp relating to Germany’s neurotic fear of hyperinflation. Add the growing divergence between euro economies and a far deeper than necessary downturn is guaranteed for Western European countries.

America, which is free from those constraints, already has 2 percent interest rates. It is, however, suffering a double blow: the fading of the effect from the summer fiscal stimulus and a loss of export competitiveness as the dollar rises.

What began as bad government, worse regulation, grasping banks, financial structures that lacked resilience because they were built on sand, has turned into a perfect storm that is about to come ashore and swallow much of our familiar financial and economic landscapes.

As we wrote here a year ago, while the current triple crises are different from the 1930s, and may not bite so deep, the damage will take just as long to repair.

When a bubble of such exuberant overconfidence bursts, the fallaway has to be profound before a new wave can summon enough energy to restart the cycle.

What consolations can we find among this heap of misery? As usual Einstein has a thoughtful response:

“We act as though comfort and luxury were the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about.”

Happy enthusiasm.

It’s been decided. Gordon must go … painfully.

Such is the extent of his crimes against humanity, the nation, the planet, and especially the Labour Party, the biggest jury ever assembled has decreed he must suffer death by a thousand cuts.

Even the political commentators — who are finding it hard to reinterpret the death throes of this man’s career in new and original ways — were virtually unanimous this weekend on his ultimate fate. Only one that I read put up a lukewarm defence: Peter Oborne in Saturday’s Mail. But there was something weary and attenuated about his piece.

For a more red-blooded approach “Pollygate” takes some beating. The Guardian’s Pollygamous lapdancing correspondent (if Richard Littlejohn is to be believed) was immortalized by parliamentary round-robin, when her extended version of the last rites was circulated by email to every sitting Labour MP. Imagine opening an email and discovering a thousand words by Polly Toynbee on your BlackBerry. Spam doesn’t begin to cover it.

Over at its sister paper, The Observer, Andrew Rawnsley patrolled his now familiar beat, Gordon must go … Oh, the tedium of it.

Turning right into the Telegraph offices, even Gordon’s editor for his new book on “Britishness” (Heaven preserve us!), Matthew d’Ancona, gave the old screw another twist, albeit with just a modicum of concern. Heads and brick walls, Matthew.

Melanie Phillips takes up the baton in this morning’s Mail. It’s a war of attrition now. “The strategy is to undermine Brown by withdrawing support on the Labour benches to such an extent that ministers have no alternative but to wield the knife upon the stricken Prime Minister, and put him and the party out of their misery. … [T]he public is simply sick to death of the whole lot of them.”

The Grim Reaper, it seems, in the person of creepy John Reid, who could teach Vladimir Putin a thing or two, is hovering in the background like a Glaswegian Brutus. He may even decide to stand against Brown. What, another Scotsman? He wouldn’t pass the Paxo Test.

This whole scenario is taking on the form of one of Shakespeare’s more gruesome theatrical extravaganzas. Maybe the party should hire Trevor Nunn as a directorial consultant and be done with it.

In keeping with the theatre noir mood music, Peter McKay talks of Viking funerals, and paraphrases the poet Percy Bysshe Shelley, “Gordon thought he could reap Tony’s seed, keep his wealth, wear the robes he’d weaved and bear the arms he’d forged.”

Not so sure about Tony’s seed though.

Back at the now intensely compelling Guardian, Andrew Marr’s missus Jackie Ashley writes, “The Labour party could be on the verge of destruction. Out of money, and facing an electoral smash and a massive factional fallout, it may not survive as a major political force.”

On Gordon himself she reports, “In private he brims with enthusiasm about child poverty, perinatal mortality in Sierra Leone, and the impact of rising food prices in China.”

Perinatal mortality in Sierra Leone? Says it all, doesn’t it? Out of the mouths of babes and Guardian columnists …

The ever-dependable William Rees-Mogg in The Times has, “Labour’s best hope lies with the Palin effect. Gordon Brown is guilty of boring the nation. His party should look to its women to make itself interesting again.”

But where is a Sarah Palin in the massed ranks of Labour wimmin? The Blair babes are like Gordon, ideological nutcases and social engineers working on the principle that they know best how the rest of us should live, despite the deficiencies in their own lives.

Sarah Palin speaks from real experience learned in the harshest of environments. By contrast, Labour females have the odour of insipid British local government hung about them.

Rees-Mogg revisits his championing of Harriet Harman — Labour’s Hillary — but also adds Ruth Kelly to his shortlist who would swing a bit of interest back towards the Labour Party. I agree, but in both cases it would be accompanied by national derision.

The unsmiling Harman is too frosty and way too feminist, while newly-glamorized Ruth Kelly has a most unfortunate accent that drains her presence of seriousness. An election campaign filled with her drone and Labour’s cacophony of glottal stops would drive us all potty.

Sarah Palin is the nearest America has come to finding a Margaret Thatcher. She explodes onto a stage and holds her audience by the force of her personality and the “wow” effect when she articulates positions that resonate naturally in the minds of her listeners.

She probably reminds Americans of Mark Twain and Henry David Thoreau who spoke with folksy common sense in an aura of spirituality. That’s why she’s beating the pants off wonky, cerebral Obama. It’s the psychology, stupid.

Does anyone imagine Harman or Kelly speaking to the British soul as does the Last Night of the Proms?

Margaret Thatcher did. Sarah Palin does in America.

Janet Daley in the Telegraph nails it when she urges David Cameron to begin speaking for the nation. “Shouldn’t the voters be made to feel that there is a prospective Prime Minister who is not playing this game purely for party advantage and is actually prepared to speak up on their behalf?”

Silence is often interpreted as conspiracy.

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Remember the old song that begins: “Happy days are here again, The skies above are clear again, So let’s sing a song of cheer again, Happy days are here again.”?

You don’t need to be a grumpy old puritan to be thankful that a decade of overindulgence, bubble following bubble, and preening egos fed by Cheshire cat politicians whose every error is concealed by good economic tidings, is finally and emphatically over. But can we really squeeze some happy juice from the remaining husks of our collapsing economies and even Western civilization itself?

You bet we can. We’ll start small — just to get you in the mood.

Andy Wood, chief executive of Adnams, a brewing and hotels business, is quoted thus in today’s UK Telegraph : “… throughout East Anglia we are seeing fewer cars on the roads … That’s just one example. There are fewer people going to pubs and they are also spending on different things.”

Isn’t that what almost everyone has been working towards for years — fewer cars on the roads? And is he hinting at a curtailment of binge drinking, which has become a serious social problem in Britain? Coming from a brewer, that must carry weight.

In England, we were recently informed that unregulated immigration from Eastern Europe, thanks to the EU, and the same from the rest of the world, thanks to the Newish Labour government, would double our population in 30-40 years. Considering our population density is already ten times that of the United States, four times France’s and three times Germany’s, that would be a disaster and leave the country unrecognizable even to its own.

Now the word on the street is that half the East Europeans have left as employment dries up and the exchange rate becomes less favourable for them to send money home. The same is beginning to happen with all immigration as the government tightens up on benefits and entry restrictions, mainly, one surmises, to save money.

Better still, the twin projects of a government lacking coherence and competence, while simultaneously pursuing programmes of social engineering unparalleled outside the old communist world, are now exposed as lethal and highly unrewarding. Gordon Brown, a shambling, frightened figure these days, embodies the imminent death of this unhealthy movement. And it took the collapse of the economy to do it. We may regard that as a small price to pay.

I’m guessing that similar scenarios can be found in most other Western countries. In America, for example, where a liberal-left Presidential candidate has a real chance of victory, will a hard-pressed people vote for an untried, although worthy, man whose sketchy manifesto to date closely resembles Blair’s and Brown’s of a decade ago? Won’t they prefer the experience of an older man offering more of a hair shirt approach to the nation’s finances?

The greatest benefit of recessions is that they shake out the incompetent and the wasteful. Companies that should never have received the support of banks or private equity firms fall apart under the weight of highly-leveraged debt. It causes much hardship, of course, but it brings us collectively back to earth and to honest and careful accounting.

Foolhardy projects, like the euro-currency zone and the EU constitution, are revealed for what they are: the expensive fantasies of puffed-up politicians. They may just survive, unfortunately, but they will not be taken seriously in future, and the likelihood is that they won’t exist in ten years.

And what of all those little luxuries we’ve got used to during the past decade of higher disposable incomes? I always did prefer a measure of ebony tea in a cracked mug to a latte in a supercool coffee shop.

We may have had access to all manner of entertainments across a dizzying array of platforms, but in our exuberance we just didn’t notice that most of it was not very good.

Let’s face it, the good times are only really great in retrospect. As one who lived through the 1980s boomtimes in London, I recall them with some relish. On closer inspection, though, I can dimly remember the frustrations and problems too. What on earth did I do with all that money?

As a certain French general used to say, every weakness in your position can be turned to your advantage. That’s the spirit in which I approach the coming era of austerity.

How about you?

The German playwright Bertolt Brecht once wrote a poem in support of a peasant’s revolt. When he presented it to the leaders of the uprising, they told him, “Our people won’t like this. Can’t you change it?”

“There’s nothing wrong with the poem,” retorted Brecht, “Change your people”.

Old Bertie would have made a fine President of the EU Commission in Brussels, for that comes very close to the European elite’s reaction to Ireland’s No vote in yesterday’s referendum on the proposed EU constitution.

Quick Recap for the Uninitiated
The original European Union constitution was rejected two years ago in referendums by the French and the Dutch. Had Britain been allowed the promised vote, it would have been slaughtered, but the No results on the continent saved Tony Blair’s face.

The bureaucrats of Brussels, urged on by Blair and Germany, then shuffled the pack, cut out a few cosmetic bits and renamed the document the European Reform Treaty. This is now in process of ratification around Europe. Only Ireland was given a referendum on it. Britain’s treacherous government under Gordon Brown defaulted on its manifesto promise and is currently forcing the treaty through Parliament to bypass the inevitable verdict of the people.

Yesterday, the Irish said No! … emphatically.
/Recap

This morning the EU is urging the other 26 countries to continue with their own treaty ratification processes, even though it requires unanimity to become law.

The simple fact is, Europe’s political class wants this “constitution” — so-called because it gives the EU a legal identity for the first time — while the people do not.

There are half a billion people against half a thousand politicians. Who will win?

The Commission’s legal team is already working on how to implement most of the constitution’s contents without the need for a treaty. In other words, smuggling most of it into law by the back door.

Why does Britain, the most Eurosceptic nation in Europe, put up with this ghastly authoritarianism? For the same reason we sleepwalked into two world wars in the last century. We preferred not to think about it until it became inevitable.

Sometimes apathy can kill.

So next week Gordon Brown is to sign Britain up to the European constitution, while simultaneously reneging on a manifesto promise to give the people a referendum on the issue — simply because he knows he will lose it.

Are any of those actions justifiable in a moral universe, let alone a fully franchised democracy? Do I need to answer that?

Brown’s claim — and Tony Blair’s — is that the new document is different from the one they made their promise on. That is despite everyone who has examined both agree that up to 95 percent of it remains the same, especially the legal framework.

Brown further claims that Britain is protected by four “red lines” beyond which he will not go. These are policy areas such as foreign affairs, legal policy, etcetera.

It has a sniff of cordite about it. Back in the 18th and 19th centuries British soldiers wore red tunics and were known as Redcoats. When surrounded, outnumbered and in dire straits, they would form four red lines and stand in the famous British Square formation. By holding their nerve, and with great discipline, they would lay down a deadly barrage of fire against the enemy, whether it was Zulu or American.

Quite often they would break out and win the battle. Sometimes they were overwhelmed and fought bravely to the last man. Whatever resulted, the Square was always a last desperate position.

Now Gordon Brown is defining this island nation as “four red lines”. Nothing more to show for two thousand years of history and an empire upon which the sun never set. Such defeatism is pretty hard to take.

New Labour, a political party of social Marxism and clunking incompetence, is finally getting its revenge on a Britain it has always despised. Armed with a new Scottish Prime Minister who allowed Scotland a referendum on independence, it refuses England, which is 85 percent of the poplulation, a plebicite on its freedom — from Brussels.

If you’re in Britain, support a referendum now.

Many of us have been saying it for years : “The BBC is not what it used to be.”

The reasons are many but one stands out. As London has gradually separated off from the views and values of the rest of the nation, so the Beeb has followed suit.

The once proud Corporation is now generally seen as run by a cadre of “metrosexual Guardianistas” — after the clunkingly leftist newspaper. The joke is that they are all balding 39-year-olds called Tristram. Not true, of course, but it strikes a real chord.

In fact, the Beeb is the biggest pensioner in the land, receiving around $6 billion (£3bn) in benefits every year in the form of the licence fee. This licence is levied on everyone in the country who watches television of any sort — even if they never sample the dubious delights of the BBC itself.

The Corporation is now so bloated and privileged — think of the International Olympics Committee where the President is addressed as Your Excellency — that it’s almost impossible to manage or control, especially by the small-beer programme-makers drafted in to do the job.

Today, we hear that the police may be called in to investigate alleged widespread fraud and misrepresentation.

The last Chairman, Michael Grade, a man of some stature in broadcasting, left suddenly to head up ITV, the Beeb’s main rival. Did he sense the disaster waiting to happen?

The previous top management was effectively decapitated by a rogue Government spin doctor for telling the truth about Iraq intelligence. So the Beeb is penalized both for telling the truth and for falsifying it. The lesson is that Government makes a poor bedfellow for any media organization priding itself on its integrity.

After the fiasco over the false allegations about the Queen, in which footage of a photoshoot with American photographer, Annie Leibovitz, was shown in the wrong order to make it look as if the Queen was storming out of the session when, in fact, she was coming in, the BBC has all but collapsed.

Its shaky amalgam of internal bureaucrats and outside production companies has been shown to be grossly inadequate. The once rigorous ethos and in-house training regimes have been largely abandoned in favour of roving freelance operatives who work on short-term contracts for every other broadcaster.

The oddly named BBC Trust has ordered an immediate suspension of all phone-in and interactive competitions after an internal investigation uncovered a string of editorial breaches. They include the flagship charity shows, Children In Need, Comic Relief and Sports Relief.

BBC Director General Mark Thompson (pictured) presented the findings of an internal audit to the Trust yesterday.

The Trust said it was “deeply concerned that significant failures of control and compliance within the BBC, and in some cases by its suppliers, have compromised the BBC’s values of accuracy and honesty.

“The Director General’s interim report to the Trust about additional editorial failings shows further deeply disappointing evidence of insufficient understanding amongst certain staff of the standards of accuracy and honesty expected, and inadequate editorial controls to ensure compliance with those standards.”

The recent debacle over the trailer for a documentary series about the Queen was just one example of many editorial breaches. It has also emerged that RDF Media, which made the series, used the same footage at a festival in Cannes, France, earlier in the year.

It’s now known that the BBC put fake winners on air during phone-in competitions for Children In Need, Comic Relief, Sport Relief and other programmes. It was fined $100,000 (£50,000) only last week for a similar event on the once much-loved children’s show, Blue Peter.

No word yet, though on sackings or resignations of senior BBC personnel, but after this catalogue of woes, it seems almost inevitable. At the least, Mark Thompson, the DG, and Peter Fincham, Controller of BBC1, should be participants in the head-rolling reality show.

Let’s hope they don’t have a phone-in competition for that.

He’s gone!

After 10 seemingly endless years, the old ham has gone.

We’ve criticized him enough on this non-political site so don’t intend to give him a Syntagma drubbing today.

A colleague who knew him well — and liked him — summed Blair up this way : “He’s charming, courteous and kind. He has all the manners of a top British schoolboy. He means well, and has worked hard for the country.”

You sense a “but” coming and you’re right.

“But he has no intellectual curiosity whatsoever. He knows very little about anything outside his narrow specialism of the criminal law, and believes that charm (his) is all he needs to be Prime Minister. He can’t even send an email and finds computers utterly baffling.”

Tony Blair is hopeless at detail, mastering only the emotional tone of a brief. Decisions were made on the basis of, “Does this make me look cool?” That quality made him a star in America, especially after his unqualified support following 9/11.

In Britain, however, his lack of grip and concentration meant he botched every level of domestic policymaking, and leaves the country in a worse state than it was in the mid-1970s when another Labour government brought it to its knees economically.

Verdict? He didn’t do the detail, and Britain suffered the result.

He will not be missed — at home at least.