I’ve decided to give up writing about politics on this site. The reason is that, with a new business to run, there simply isn’t time.

Writing about politics is an all-consuming activity. It glues you to 24-hour news almost 24/7. It entices you to read all the serious newspapers and political magazines every day of the year. Add to that, time spent trawling the internet, Googling for clarifications and chasing up leads, plus the background research and fact-checking.

Instead, Syntagma will revert to type and concentrate on a melange of finance, philosophy and technology as in days of yore.

I know I shall be tempted to dip inky fingers into the increasingly murky waters as the British General Election gets near, but be assured Reader, my resolve will hold.

Except, of course, to raise a hearty cheer, and glass, when David Cameron walks into 10 Downing Street as Prime Minister.

The rest is silence …

John Evans

Recent Related Stories
Confusion or Confucius?
Conservatives dream of Silicon Alley
David Cameron, your country needs you
How to make sense of economics
Bulletpoints for a Conservative Government: Education
Batty Brown bats against Britain
What if the UK left all international organizations?
Midweek Politics: PMQs – Clegg shines, Brown bores
Midweek Politics: A Budget for fools and horses
Midweek Politics: Will bloggers bring down Brown?
Midweek Politics: Gordon Brown will resign soon
Midweek Politics: Will the Tories be any better?
DIARY: Brown as actor, Queen and manuregate, Bryan Appleyard, Autumn crunch for Europe, Speaker out, Man U wins plaudit
DIARY: Political outsourcing, Public works, Citizen journalists, Patriarchs, Scottish politicians, County elections
DIARY: Balls’s edyukishun, Turkish delight, Pigs flying, Bacon sandwiches, Hattie and Boris, Referendum
DIARY: David Cameron, Publishers and authors, MP’s expenses, Football and Gordon, Globalization of the left, 50p tax rate, Giscard d’Estaing

I’m always on the lookout for useful vignettes of what is wrong with the present British government. There are many naturally, but yesterday the perfect example appeared on the BBC.

Reporter Richard Bilton drew our attention to the extensive recording of every journey we make on major roads across the country.

Each time we stray off the country lanes, our number-plates are recorded by “sophisticated” software, checked for dodginess — undefined — and logged on a massive and growing database somewhere in the heart of … who knows where.

The police and other “agencies” of government are able to access this information at will, and use it in whatever way they see fit. Bilton’s point was that no one regulates this activity. Indeed, it’s hard to see how anyone could.

First, he approached the Information Commissioner, Richard Thomas, and asked who regulates the information. On camera, Thomas said, “We don’t regulate the police’s use of this information”. No one does.

Bilton trudged along to the Home Secretary, the infamous Jacqui Smith. With that wide-eyed and terrified expression common to many MPs these days, she tumbled out her answer to the same question: “The police are regulated by law and the Information Commission …”.

Bilton replied that Richard Thomas had told him they are not regulated by them.

Smith shot back, “We will have to look at that again and at further legislation”.

Call me pedantic but, was she lying, or didn’t she know that the Information Commissioner was not charged with checking this practice? Either way, she should be sacked.

But then that’s typical of the way Labour fudges every aspect of its performance. Jacqui Smith is just not very good at dissembling the facts, try though she might. We’ve become so used to it, we tend to shrug it off now. We shouldn’t. It’s yet another fraudulent element in the “new politics”.

I once worked at the Central Office of Information in Hercules House, London, centre of the government’s information service. The COI has a distinguished reputation stretching back to the war. Since 1997, the operation has been taken over by red-top tabloid journalists and bears little resemblance to its old independent role.

Therein lies the faultline at the heart of this government. There’s nobody charged with standing back in total neutrality and assessing real-time performance, compliance, and the fundamental integrity of the system. Sham operations pass for oversight.

Gordon Brown, who has dominated domestic decision-making for 12 years, first as Chancellor, now as Prime Minister, has run a Brezhnevian Soviet system of government.

The Supreme Soviet is centred on Downing Street, not Parliament, which has atrophied disastrously under his regime.

Local soviets — or quangos, as they are called — run almost everything below central government level and are populated by carefully selected members of the tribe. They genuflect automatically to everything that Downing Street wants, without being told. Thus, if they slip up, as is usually the case, no smoking gun is found that can implicate the Supremo in the cock up.

This is typical of revolutionary cadres throughout history, as they seize power for themselves and mangle every decent impulse in the system.

They then destroy the national culture piece by piece. For without that, no sense of coherence remains. What was once “a people” becomes putty in the hands of cynical operatives who “do politics” in place of governing for all.

We have been had. Taken over by a political class whose motives are not of these islands but of distant lands dominated by warlords and mercenaries. They have polluted the system, destroyed the economy, the Constitution, and our country.

Forget calling for “time to reflect”, as many are, we must get rid of them now. A General Election is the foremost imperative of our times.

John Evans

Recent Related Stories
Saturday Ramble: What is this place that passes for Parliament?
Saturday Ramble: The Blackness of Brown
Saturday Ramble: Ashes to ashes, defeat to victory
Saturday Ramble: Last gasp of the lumpen proles of Labour

There’s a lot brewing this morning, including PMQs, an election leak, and general discussion of the state of Parliament.

Let’s start with an intriguing snippet: an apparently inadvertent leak of Gordon Brown’s election intentions by Labour Chief Whip, Nick Brown, one of the PM’s closest confidants.

The picture shows a Twitter post from N. Brown to Labour MP, Austin Mitchell. Since the new Speaker will be installed around June 22, that means an August or September election will be called in July, give or take a few weeks.

The Twitter account was subsequently taken down. Oooops!

This is, of course, a breach of protocol. A Dissolution should be a request from Prime Minister to Monarch, not blabbed about on Twitter.

Nick Brown’s head sits uneasily on his shoulders today.

Via Iain Dale’s Diary

Don’t throw out 646 babies with the bathwater
In his press conference last evening, Gordon Brown was in “Save the world” mode — again.

Having done his bit to subvert and corrupt Parliament over the past 12 years, Brown now poses as the Great Reformer on a personal mission to clean up politics. One could be excused for feeling physically sick during his performance.

Do we want this moral wreck of a man to poke about in the soul of our Constitution? I can hear the howls of rage from here in deepest Devon.

We are now to have a new Speaker foisted on us by a Labour dominated House of Commons, and promoted, I’ve no doubt, by the man who gave us Michael Martin.

I’m rapidly coming to what might be called the Widdy Option — after Ann Widdecombe — of a temporary Speaker (Widdy herself?) to see out the remainder of this Parliament.

Already, leftish commentators are writing about a totally new Constitution, where sovereignty will rest with “the people”, not Parliament. That effectively abolishes the Constitutional Monarchy, characterized by the “Queen in Parliament”.

Let’s get this straight, the public is not angry with the Queen, or even Parliament. The general anger is targeted on Gordon Brown himself and the pig of a party he leads. In the mood of the times, my profound apologies to pigs everywhere.

Constitutional change must begin with what we want to retain, not what the Left wants to get rid of. That means the great principles that underpin the system and hold the revolutionaries at bay.

What we must chuck out is the class-based shop steward system introduced by a sizeable block of Scottish cronies around Brown, including Michael Martin. That should be dumped into landfill at a depth at which it’s unrecoverable.

Only a Conservative Government under David Cameron can do this with full public confidence.

If Nick Brown is right about the election, we may yet enjoy the glorious summer promised us by the Met Office.

PMQs
Two very entertaining encounters between the Opposition leaders and Gordon Brown were laid out before us at this morning’s Prime Minister’s Questions.

David Cameron once again shone a searching light on Brown’s inadequacies.

He spat out his first question: why did the PM say that a quick General Election would mean “chaos”?

Brown tried so hard to be slick but, as usual, stumbled oafishly. Because a Conservative Government would mean spending cuts, he gloated.

Eh? Don’t we have the highest government debt in peacetime history, one which our grandchildren will still be paying off?

Cameron left that hanging in the air by chortling: so he acknowledges the Conservatives will win the election then!

Spending cuts, mouthed Brown, cutting his own throat in the process.

I counted only four questions by Cameron, but they ended in a flurry of fury with his peroration, which left Brown in no-man’s land. “The Prime Minister calls an election chaos. I call it change. When can we have one?”

Spending cuts …

Oh dear.

Cleggie was in cracking form again too, and facing an inevitable barrage of snorting from Labour proles. After his first question, Speaker Martin — yes, the old goat is still there — called someone else.

Clegg stood his ground. “I have two questions, Mr Speaker”.

Martin fumbled. “I thought you asked two questions in your first one.”

Clegg laughed it off and continued.

The Speaker is in demob mood and may be troublesome in the weeks ahead.

Syntagma’s Verdict:
Cameron, 8
Clegg, 7
Brown, 0.9
Martin, vanishingly small.

John Evans

Recent Related Stories
Midweek Politics: PMQs – David Cameron in thrusty form
Midweek Politics: PMQs – Clegg shines, Brown bores
Midweek Politics: A Budget for fools and horses
Midweek Politics: Will bloggers bring down Brown?

Sunday morning at last, after a week of calamity for Britain’s Labour government.

Not surprisingly, the papers are flagging enormous Conservative leads in the latest independent opinion polls. The Mail on Sunday carries a 19pc advantage, while the Sunday Telegraph is close behind with 17pc. Either would do for the Tories.

George Osborne put on an impressive performance on Andrew Marr’s programme, looking and sounding more like a Chancellor than Alistair Darling will when he presents the Budget on Wednesday.

These are heady times for the Tories. Those of us who have been forecasting a crushing landslide at the next election (due before early June, 2010) have been running out of steam lately. No sweat.

I still stand by my counter-intuitive forecast last week that Gordon Brown will resign within days or weeks — and I don’t mean 50 or 60 weeks.

Peter Oborne has written a timely piece in today’s Observer, detailing the failings of New Labour governance under both Blair and Brown.

He traces them back to Maurice Cowling at Peterhouse College, Cambridge, who taught the Namierite school of history to Michael Portillo, Michael Gove and … Damian McBride.

Oborne writes of Cowling, “… his particular scholarly contribution was to take Namier’s pessimism about human nature, scepticism about political ideas, and dogmatic insistence that public events could only be explained by reference to narrow personal interest, to their ultimate conclusion.”

This led directly to a method known as “manipulative populism,” a fancy term for lying through your teeth.

Thus peripheral power passed from Chief Whip, whose precinct is Parliament, to the Prime Minister’s spin doctor, whose domain is public perception and news management.

Gordon Brown earlier rejected that dismal thesis, but has secretly embraced it like a frog to a pond.

That’s perhaps the worst aspect of Brown’s character — his complete lack of any.

We have been getting reports that the saintly Vince Cable has been getting above himself lately, adding a touch of grandeur to his air of infallability. When he starts waving to crowds like the Queen Mother, we’ll know his transformation is complete.

In today’s polls the Liberal-Democrats have received a big bounce from Labour’s implosion, putting them at 21pc. It’s fair to say that most of that is probably due to their Treasury spokesman, Mr Vincent Cable.

Is it possible the Lib-Dems could become the Official Opposition after the election? Don’t rule it out. They fight hard at election time. Hand-to-hand engagements are not unknown. If they were allowed bayonets, Paddy Ashdown would be leading the charge.

Once popularly known as “the Salads,” a more accurate rendition might be “the Saladins.”

Vince should tread carefully though. There’s a term in engineering called Cable Fatigue.

He may be getting perilously close.

It’s that time of year when wannabe artists start packing up their works for the Royal Academy Summer Exhibition, which is open to almost anyone.

There was a wonderful vignette of the modern art scene a few years ago when an artist sculpted a head for the show. To display it at its best, he purchased an off-the-shelf plinth on which to mount it, then sent it off to the RA.

As often with the best laid plans, the head became separated from the plinth in transit.

Imagine his surprise when, weeks later, the Academicians rejected the head, but accepted the plinth.

I’ve often wondered if many of the exhibits there comprise bits of packing material and wrapping paper.

That saintly chipmunk, known throughout the land as wee Hazel Blears, Minister for Communities and Other Odds and Sods, wonders why we Brits don’t have a TV version of the American West Wing.

Maybe we do, only in real life.

Remember when New Labour first came to power? Tony Blair and Peter Mandelson referred to each other as Jack and Bobby, after JFK and his brother. Later the name Bobby was passed on to Mandelson’s dog — dogs feature large in life at the White House.

Were these two prize chumps role playing themselves as Pres and Chief Sidekick? Don’t put it past them. Juvenilia is all part of The Project.

Come to think of it, almost every ghastly glimpse we get of life inside Number 10 has an eerie resonance with the West Wing way of doing things.

Never mind that our constitutional arrangements are vastly different from the US version, Blair and Brown made them fit somehow — with much violence.

I believe the sheer incoherence of the government machine is due to excessive WestWingitis. Tony Blair was once reported to have asked a scriptwriter on the show for advice on how to govern Britain.

Is it any wonder … ?

Prince Philip today becomes the longest-serving Royal Consort in British history. Probably the oldest too.

On Tuesday, the Queen is 83, the oldest reigning Monarch in our history.

God bless them both, and may they continue to bring sanity to our sadly-depleted and much tarnished public affairs.

John Evans

Recent Related Stories
DIARY: Water droplets, Dirty tricks, David Starkey, Liddle’s Lent, Carbon storage
DIARY: Editors at large, Easter, Hoffman, Andrew Neil, Iain Dale, Autumn election
DIARY: Wishful spending, He has bottom, Brown’s fall, Combustion stinks, One world
DIARY: Signposts, Adair Turner, Ayn Rand, 45 percent, Jonathan Porritt

Foreign Secretary David Miliband was on the Andrew Marr programme this morning and in subdued mood. The only memorable thing I recall is: “We have to inject demand into the economy.”

Does he know what “demand” actually is? And can it be injected?

The Keynesian left often uses mechanical words and phrases to describe nebulous processes. The aim in this case is to increase spending in the real economy to boost employment and lower social security payouts. There are many ways of doing this, mostly they don’t work.

For example, if civil servants went to a typical High Street to hand out briefcases full of banknotes, what would happen?

Two years ago most recipients might head for the nearest celebrity chef restaurant and drink the menu. On the way home they might pop into a jewellery shop to buy a bauble for the missus. That would push money into the real economy and boost employment. But it wasn’t needed two years ago.

Today, by contrast, a hollow-cheeked citizen would probably open the case and exclaim, “Now I can pay off the mortgage arrears, pay down the credit card, and put the rest into a savings account.”

Since all that money will end up back in financial institutions, it’s not going to affect unemployment at all. And since banks are hoarding cash while asset prices are falling, it’s not going to improve credit either.

Typically, Keynesians call this “priming the pump”. When was the last time you used a pump?

Demand is not a mechanism that can be turned on and off, it’s a psychological idea and depends on many unknown unknowns. Even then, is it actually “demand” we’re discussing here?

Do we walk into a supermarket and say, “I demand you sell me these eggs!” Or a car dealer’s forecourt: “I demand to own that car”. Of course not, demand is not involved at all, unless we’re robbing the place.

Our “needs” will generally be met in a downturn because we can tailor them to our resources, and we don’t actually need very much.

In a modern economy, it’s our “wants” that add the froth and pump up economic activity. By engaging in “demand management”, the government is really making us spend on inconsequentials, fripperies and other luxuries we can well do without. It’s trying to create “disposable income” which we can dispose of without a qualm.

Moreover, our wants are viewed from a different perspective when times are hard. The puritan side of our nature re-emerges and we scorn our previous spendthrift activities. We become rational again.

Odd, isn’t it, that our elected representatives prefer us to be irrational, and use our own money to bribe us into exuberant expenditure. How are they different from the pushy credit card companies at the height of the boom?

But it’s still not Demand, is it? Wrong word. Let’s use Wishful Spending instead.

I know it’s not as impressive or managerial as Demand, but at least it means what it says, and we would know what the authorities were trying to make us do.

Wishful spending management: the infantilization of the population completed. Mission accomplished!

Politicians have their own terminology of praise, faint or otherwise. One favourite is: “He has bottom”. Strange, it’s never used about a woman.

Does Gordon have bottom?

Well, you could do worse than glance at Gerald Scarfe’s wicked cartoon in today’s Sunday Times. Brown is depicted as demonstrating quantitative easing to members of the G20.

I’ll leave you to imagine the scenario … or pay the £2 price of the paper.

The roasting of Gordon Brown proceeds apace this weekend.

Yesterday it was Matthew Parris’s turn to take aim and fire. In The Times (London) he eviscerated, excoriated, then practically excommunicated the man from all polite society west of Margate and south of Dunfermline.

Today, Matthew d’Ancona of the Telegraph squeezed him dry till the pips squeaked: “The spandex-clad superhero has lost his aura of power. Mervyn King has cancelled his credit card.”

Peter Oborne also weighed in on Saturday with more thudding blows to an already bruised body. Following Daniel Hannan’s surprise rapier attack on European soil, the commentariat is piling in for the kill.

It’s not surprising. The world is expecting its Saviour-in-Chief to pull a giant rabbit from a small hat on Thursday. The G20 has been massively over-promised, thanks to Brown.

The decline is over, only the fall is left. Will he walk away now from the defeat that’s coming? Or will he limit the pain by calling a June General Election?

He’s no William Wallace.

The enigma at the heart of the hysterical response to supposed man-made global warming, is that paradoxically, its goals are so limited.

If carbon is indeed the problem, why keep trimming away at the edges? Why not ditch carbon completely?

At present, every human activity results in the production of carbon. Every morsel of energy we use, for light, heat, propulsion, manufacturing and servicing, somewhere down the line involves the burning of long dead trees.

It’s an astonishingly primitive process for a so-called advanced technological society. If we explained to a Stone Age caveman where our abundance of energy comes from, he’d remark drily, “We do that too. You’re not so clever after all.”

Where is the new motive power source for a truly innovative age that doesn’t depend on combustion of some sort? Wind and solar power require large areas of land to serve a small population, land that will be needed to grow food on in the future.

Greens want to chip away at the usage of carbon burning sources while the human population is doubling every century or so. It doesn’t add up.

All effort and investment should be directed at eliminating the combustion phase in the production of energy, not spending vast sums shoring up defences against future events which may never happen. If all the resources devoted to “green” alternatives were switched to that one objective, do you suppose it would fail?

Why pauperize whole economies in a futile attempt to empty the sea with a bucket?

Niall Ferguson’s thoughtful lecture to the Centre for Policy Studies (Get pdf here) on the trilemma of modern politics, prompts a lot of questions. Here’s one of them:

What halted the Doha international trade agreement was India’s veto. They were worried about the possibility of mass suicides among Indian farmers helpless against huge surges of imports into their country. Once again it was a clash between local sensibilities and a theoretical set of principles set out by the world’s power brokers. Local versus global.

The notion of “one world” is valid only on a spiritual level. As a philosophical Idealist, I certainly hold that view. However, on a practical level, it’s not true at all. Go and talk to those Indian farmers to find out why.

C.G. Jung’s description of a Collective Unconscious tells a complicated story. Many of the “archetypes” found there deal with self-preservation and can be terrifying to behold. He warned Westerners in particular not to lose themselves in this psychic realm because, as rationalists, they have no defence against the symbolic nature of it.

The nearest we have to a world mind is the internet. Jung would have been fascinated by it. However, his warnings ring true when some people get so caught up in the web of social media sites that they become unhinged and separated from reality. All those teenage suicides in the small town of Bridgend gives us an inkling.

People need feet of clay to be contented in this world. A satisfactory local environment is needed for mental harmony. It’s not speculative. It has actuality.

Our minds are not constructed to deal with planetary affairs, however much half-deranged politicians like Gordon Brown and Peter Mandelson may insist the contrary.

One World is forever an aspiration, never a finished construct. Only swamis in caves in the Himalayas can contemplate the cosmos as a unity.

For the rest of us, it’s business as usual, right here, right now. The G20 will produce only sporadic results papering over many cracks.

It’s the cracks we should be celebrating, not the glue. They are the real thing. The stuff of freedom. Wabi sabi, as the Japanese say.

When the world can live with its cracks and fissures, then a kind of unity is possible.

John Evans

Recent Related Stories
DIARY: Signposts, Adair Turner, Ayn Rand, 45 percent, Jonathan Porritt
DIARY: Clegg, Burke, Chocolate, Labour copycats, High centre ground, Pointers
DIARY: Kennedy, Mandelson, Public sector, Prince of Wales, Birdtweets, Canadian meltdown
DIARY: Maitlis, Tories, Spring offensive, Education, Hendry, Eurozone
DIARY: Captain Mainwaring, God and bicycles, Psychological contagion, Prediction, Blakemore, Gilbert

The runaway inconsistencies of the Labour government’s handling of the economic crisis in Britain are truly terrifying.

Last week, they began printing money to buy back debt they themselves have issued, a process I described as like a snake eating its own tail.

Technically, this is considered a triumph of good judgement in the circumstances. Logically, it’s voodoo without a witch doctor.

Now, having added Lloyds HBoS to its list of (virtually) wholly owned banks, they are offering hugely expensive insurance policies against these bank’s toxic assets. As John Redwood writes in his blog today: “I asked what was the point of taxpayers ‘insuring themselves’ in RBS and Lloyds.”

The contradictions involved in eating one’s tail and insuring oneself against loss with one’s own resources are derangement-inducing. We could all go mad just thinking about them.

We’re told that economics is a funny business. Things are not always what they seem. The bad guys are often the goodies in disguise, and the reverse is also true. If you’re not a member of the Initiati, you must take it on trust. You have to see it in the round.

But when the snake gets to its stomach, what then? And if taxpayers have to pay out on dodgy loans — as much as £50 billion, some say — does that money go round in circles and end up back in taxpayers’ pockets?

Like hell it does! It will more than likely find its way into the bonus packages of jubilant bankers, or back in the Treasury where they will find some excuse for spending it on social programmes that fritter it away. That’s suspiciously handy with major elections in the offing.

This is high deception and makes a mockery of the idea that “our government” is actually on our side.

Many have also noted that these trillion pound operations have been undertaken without proper Parliamentary approval or scrutiny. Perfunctory best describes their response to curious MPs, like John Redwood.

In the handling of this crisis, as in other areas, they have become the enemy within.

John Evans

Recent Related Stories
Watch out for the mashed potato machine
Batty Brown bats against Britain
Printing money as a lucrative business
The State of the Union

Let’s not beat about the bush, has capitalism failed?

We shouldn’t be squeamish about answering “yes”.

And “no”.

Capitalism has always depended on property, and by extension land, to underpin its activities. African countries that lack dependable property rights, never get off the ground economically, no matter how much foreign aid is shovelled in. Without property rights, capital can’t be raised, hence … no capitalism. And more importantly, no prosperity.

The West is suffering a similar, albeit temporary, state of affairs. Property and other asset prices are tumbling, hence … capitalism is in helter-skelter retreat.

Free markets are a natural phenomenon, like grass. If you cut grass, it grows back again. So does capitalism, at least in times of stable or rising property prices — which will return once the “baked in” floor of the slump is reached.

By contrast, government is an unnatural construct of human ingenuity. Long, hard-won experience tells us it should be limited in size and scope.

The “failure” of capitalism should be seen as part of a greater failure involving government and its duties to society. These are principally, sensitive regulation of systemic elements of the modern economy, like banks and other financial services, and ensuring monetary and fiscal balance across its operations.

It is now clear that government has failed systemically over the past decade by taking on too much debt, a condition mirrored in consumers’ personal balance sheets, and by serious mismanagement of the regulatory process. It has also poked about in areas for which it has no competence, no experience, and absolutely no business. Individual ministers are to blame for this amazingly impertinent interference.

We see before us, then, a temporary, if major, failure of capitalism arising from an almost terminal collapse of the integrity of the public sector. In that sense, it’s not really a failure of capitalism at all, but like an engine driven recklessly at high revs for too long. At some stage it’s going to need attention.

Why was the engine driven so hard? Partly for greed, which is the antithesis of intelligence and should have been factored into the government’s forecasts. But mainly to provide funds for the vast, bellifluous appetite of the public sector under Gordon Brown’s command.

The heart of the problem lies in the failure of society to secure and nurture its most potent means of creating prosperity.

The irony is that the machinery of capital markets and free enterprise is now almost wholly reliant on the sector that failed them so badly.

It is grotesquely unfair, but when the market system goes under, only the State can make up the deficit. Normal accounting practices hardly apply to government. It’s as if they still use single-entry bookkeeping, with no reference to profit and loss — don’t be fooled by the use of the word “investment”; it simply means spending other people’s earnings.

The State can also print money in a way the productive sector can’t. It also has powers to drain individuals and businesses of their hard-won treasure only matched by rustlers and robber barons.

What emerges in two or three years will be crucial to our prospects for the rest of the century. The balance between the voracious, inefficient State and the Prosperity Generator of non-State activity, will tell us all we need to know.

In Britain, Gordon Brown will demand his £ of flesh in any settlement between public and private, at least for the next 17 months. I recently heard a Labour MP say, “Public services are the backbone of this country”.

Into such hands will pass the power to transport Britain back to the 1970s. Life on Mars for real. We may be facing an even worse tragedy following the slump we still have to navigate.

The light on the horizon is that a general election is due soon. Our hope must be that the Conservatives, who have led in the polls for more than a year, develop a sufficiently coherent message to win the argument on the day. A mosaic of small, technical adjustments will not be enough. Labour will fight like feral cats to retain the trappings of power they believe are theirs by entitlement.

The loss of confidence at Conservative Central Office following the perceived “failure of capitalism” is palpable. It has not yet recovered from the mayhem caused by the credit crunch.

Conservatives need to look sideways at the situation by hammering home the failure of the public sector across the board and its star role in the present disaster.

Their mission must be nothing less than saving the nation’s Prosperity Generator from those who believe dependence on the State is an acceptable alternative. For without a strong capitalism, there is only the grim reality of State socialism and a return to Labour’s fraudulent “mixed economy” and benefits culture.

Socialism must never be allowed to pose as the new quid on the block.

John Evans

Recent Related Stories
Public failure and Superdemocracy
A real-time slump is not like the history books
David Cameron, your country needs you
Printing money as a lucrative business
The world needs Up-To-A-Pointism

One of the fascinations of the study of history is living through a genuine historical epoch. We are there now.

Each month another number is described as the “worst since records began”. We are entering the second year of a rare economic depression, which at minimum is the worst for 50 years, and at maximum may be a once in a century occurrence.

In real-time it doesn’t feel like that. Most of us are still doing fine and waiting for the bombshells to drop. It’s a bit like the “phoney war” in Britain during 1940. Hostilities had been declared, but nothing outwardly was happening.

Book history concertinas major events so they appear to fizz in quick succession like fireworks. In reality, there may be months or even years between them.

Quite often the collapse of some political structure, clearly doomed, takes an age to manifest because so many people at the top have a stake in its survival. They pour in quantities of other people’s money to shore it up, or just lie about the real state it’s in. Think Soviet Union or the euro currency zone.

That’s why there’s an air of unreality about another Great Depression now. Various mental buffer zones are shielding us from events that may be truly awful. Politicians are saying one thing in private, while jollying us along in public.

So, given the almost impenetrable armour covering our medium-term futures, what might be the precise problem?

Actually, in my very humble opinion, I believe there is a high level of precision in the problem before us:

Assets prices are falling so fast, no financier can back them until a loan is guaranteed against loss.

What it means is that asset prices have to find a floor. Only then will the real economy find willing partners in the financial sector and lending start to flow. When a 90 percent loan is a safe proposition, i.e., when prices stop falling, the banks will begin doing what banks do again.

No amount of government cajoling will drag them out of hibernation until it happens. At that point the “green shoots” of recovery will be apparent to all, for it’s not the actual amount of money in the economy that counts, but the rate at which it is spent that creates the multiplier for economic growth.

Which then is the chicken and which the egg? If the banks are not lending, the deflationary spiral will rumble on and on. And while prices keep falling, banks will not lend. It’s a classic lock-in without a key.

Sticking my neck out, I think every downturn in asset prices probably has an inbuilt floor.

If official intervention aborts it before that floor is reached, it simply traps pain in the system which has to be purged anyway, prolonging the recovery.

More likely, government actions push the recession below the notional bottom by seeking to ameliorate the ills of the moment; or, as in the present case in Britain, by urging the populace to continue the conditions that caused it.

There is possibly a theoretical case for allowing a serious down-swing to hit its floor quickly, so that conditions return to normal sooner rather than later, leaving the public finances in better shape.

I may be approaching the problem too mechanically. I’m aware that it’s psychology that primarily drives economic activity. I just can’t see the point of uniting the ostrich with the sand by slowing down the inevitable.

If a quick bust has advantages, how might that be arranged without unleashing an unstoppable whirlpool to oblivion?

The fear of an abysmal collapse is overdone, in my view. Normal stop-loss conditions apply as the descent continues. Big investors with lots of cash move in to pick up historically cheap assets, even if the banks are holding back.

In 1981, Margaret Thatcher and Geoffrey Howe acted against the prevailing Keynesian tide in the face of a virulent recession in manufacturing industry, mainly caused by decades of trades union bad practice. Fury erupted. A total of 365 eminent economists, including the present Governor of the Bank of England, Mervyn King, wrote a stinging letter to The Times.

Within a year the economy was recovering. Britain went from strength to strength until once again the government threw it away by fixing the currency to the German mark. Will they never learn?

Is there a lesson there for us today? Hit the bottom quickly to avoid a dead cat bounce. Take the pain on the chin and work with the grain of events. Don’t repeat the mistakes that brought us here.

For that we need politicians with fortitude and talent. We don’t have them yet.

John Evans

Recent Related Stories
Printing money as a lucrative business
The world needs Up-To-A-Pointism
Globalization destroys necessary bulkheads

Many commentators are discussing the prospect of the worst possible case in the current economic down-spiral.

Hard times for all

That case is deflation, where the relative value of our debts rises while the price of our assets fall.

In a period of low indebtedness in the early 1930s, America’s debt burden is said to have risen by 40pc in comparative terms.

In 2008, the U.S. and Britain have massive debts in all sectors across both economies. Dealing with debt in a deflationary environment is the all-pervading burden laid upon this generation and the next.

By some calculations, the United States has already fallen into the deadly whirlpool of debt-deflation, a term coined in Irving Fisher’s suddenly much talked about 1930s book, Debt-Deflation Theory of Great Depressions.

In Britain, as the BBC’s Business Editor, Robert Peston, points out on his blog: “If you combine consumer, corporate and public sector debt, the ratio of our borrowings to our annual economic output is a bit over 300 per cent, or more than £4,000 billion [six trillion dollars].” The latest figures indicate that may be a serious under-estimate.

Deflation will inevitably cause that debt to become more burdensome. It will be decades before we get it under control, and it will be future generations who pay. The bonanza of the past decade, which Gordon Brown bizarrely boasted about, will pauperize the nation’s children.

Even so, we’re not supposed to discuss this in case we “spook the markets”, a laughable notion in the circumstances. Part of the problem was the paucity of discussion on the way up, when spooking the markets was a necessary “evil”.

There will always be business cycles, just as there will always be wars. Damping them down should be a priority, rather than “cleaning up after them”, to use Alan Greenspan’s complacent phrase.

Cleaning up after this mess is going to be a generational task. If you are over 40, don’t expect to experience a time of prosperity again in your lifetime. Great disasters build caution into the human psyche. We will become suspicious of the new, the innovative, preferring what we know and consider safe.

Strong voices will emerge, suggesting simplistic political solutions to our ills. The American historian, Philip Bobbit has already proposed passing shadow laws of a draconian nature in case something nasty happens in the future. A growing autocracy will become the greatest danger.

So what are the consolations of the worst case scenario? There are many. It will make us honest again. Recently, too many people have behaved like those low-income folk who win the lottery and haven’t a clue how to handle the money. They invariably end up more miserable than they were before.

Our view of the world will alter radically in the coming year. It will seem greyer and more hostile than we’re used to. We will be forced back onto older verities. Thoreau and Emerson may come back into fashion, as self-reliance becomes interesting again.

The evils of over-consumption: roads clogged with expensive gas-guzzling cars, epidemics of obesity, low personal fitness levels, strains on the world’s ability to produce enough resources to fuel the tide of plenty, will be gone sooner than we imagine.

In an age when we feel less free than we did, freedom itself should top our agenda. Authoritarianism always prowls the perimeter when times are hard.

Can we survive this new world of limitation? Of course, and tackling it may make Barack Obama a considerable President, not just a curiosity because of his background.

In the end, we have to fall back on philosophy and practical psychology. As Albert Einstein said: “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.”

John Evans

Recent Related Stories
The world needs Up-To-A-Pointism
Globalization destroys necessary bulkheads