Friday, 28 November 2008

Borrow and spend is no new deal

SEVENTY-FIVE years on, President FD Roosevelt’s New Deal is still held up throughout the capitalist world as the benchmark for all economic reforms.
Recession? Depression? Credit crunch? What we need’s a new New Deal. Right. So what exactly was the New Deal when it was new?
Actually it was a lot of things, not all of them consistent with one another. And there is still some disagreement among historians and economists over whether it really worked.
Some (mostly on the political left) say it was responsible for America’s recovery from the Great Depression. Others (mostly on the right) claim it slowed the recovery down.
Either way it undoubtedly did a lot of good – health and welfare programmes, cleaning up and strengthening trade unions, banking reform and more.
It was essentially anti-capitalist, the federal government taking charge of the economy to improve the lives of ordinary people. And it was largely responsible for making FDR America’s most loved president.
There has been much talk lately of new deals. Gordon Brown, I am sure, would love to see himself as a new FDR – not just for Britain but for the world.
The non-Budget budget announced this week by chancellor Alistair Darling certainly looks big and bold on paper. But it was not wide-ranging, ambitious and socially useful like the real Deal.
Whether, when we look back in times to come, it will seem good, bad or merely irrelevant is hard to say. Prediction of all kinds is dodgy, economic prediction especially so. Which makes the job of Brown, Darling – and FDR in his day – largely a matter of flying blind.
Big moves may be the best thing, but they also involve big risks. When it’s the economy we’re talking about, those risks are borne by all of us.
Now, I’m no economics expert. Which, on past evidence, makes me exactly as well qualified to talk about the economy as those who claim they are.
And I have just this to say about the government’s big, bold plan to “borrow and spend” our way out of recession:
Wasn’t too much borrowing and too much spending what got us into this mess in the first place?
I can’t advise the government, but maybe I can advise you. And my considered advice would be this:
If the recent fall in interest rates and the coming drop in VAT put a bit more cash in your wallet don’t spend it. Use it to pay off any debts you may have.
If that means stepping up your mortgage payments to get it paid off sooner, or bring down your future payments, then go for it. While interest rates are low, it’s the best value you can get for your money.


LORD Chris Smith was among those talking New Deal this week. And unlike most of the gibberish coming out of the Treasury, what he said made sense.
Smith, once merely culture secretary, is now chairman of the Environment Agency, which – contrary to appearances – is not just about rivers and flooding.
Now he’s no longer in the government, he can “call on the government” to do things that matter. And what he’s calling for now is a “Green New Deal”.
He “called on the government” to produce “a comprehensive long-term strategy for investing in renewable energy, environmental technology, energy efficiency and carbon capture and storage”.
He said: “The long-term future of society depends on the government’s commitments to the environment as much as it does to education, health and the economy.”
He added: “We are facing a recession and there will be pressure to weaken environmental targets. I hope the government will hold its nerve and deliver a far-reaching programme that looks further than the current crisis.”
And he urged the chancellor to invest in green projects to soften the coming blows of climate change. I just hope the chancellor was listening.
Messrs Darling and Brown have other things on their plates just now. Things that probably seem bigger and more urgent. But which are in fact utterly, utterly trivial by comparison.


PAMELA ANDERSON is famous for being the original curvaceous “Baywatch babe” and for a much-circulated video of her having sex with her then husband Tommy Lee. She is not famous for her political views. Well, not until now.
She has now written to president-elect Barack Obama, giving him the benefit of her advice.
She says: “Dear Mr Obama, bring our troops home safely. Please shut down Guantanamo Bay.” And while you’re at it, legalise marijuana.
Obviously Pammy isn’t as stupid as (a) she looks, or (b) Sarah Palin.
The vegetarian, 12-times Playboy covergirl rather spoils her liberal credentials, though, when it comes to paedophiles. Castrate them all, she says – including anyone who’s ever been suspected or accused.
Oh well, no one can be all right all of the time.

Friday, 14 November 2008

Time we got unhooked

BAGGY jumper, tatty trousers, loosely knotted scarf, wispy hair, cheeky grin – Oliver James looks as if he dresses at Oxfam. It's probably deliberate and he probably does. But right now I’d say he’s got closer to a useful analysis of what’s happened in the British and global economy than most of the other so-called experts.
A lot of it was predicted in his book Affluenza, the very title of which illustrates his outlook.
He explains: "The past 30 years have been a shop-till-you-drop, credit-fuelled consumer binge. Almost all of us caught the affluenza virus – placing too high a value on money, possessions, appearances and fame. This virus is very bad for mental health. People with the virus are more likely to suffer depression, anxiety and substance abuse (booze and drugs)."
That seems a fair assessment. It will surely strike a chord with a great many people if they are honest with themselves.
Only in one essential do I really disagree with his analysis.
James appears to think all this sickness is capitalism gone wrong. Whereas in fact greed and selfishness are what capitalism is all about – they are what fuels the economic engine.
Still, he’s right on most points. Like the way we have all been taught to confuse our wants (stimulated, even created, by advertising) for needs. And the way our obsessions have driven us into a cycle of over-work, placing 'having' above 'being'.
Actually, I think it's slightly unhelpful to put this collective madness down to a virus. It's much more like a drug.
Living on credit, spending more and more of the money you don't have on things you don't need, is an addiction like heroin. And for society and the world overall, every bit as dangerous.
Right now, though, while the bankers, businessmen and economists see doom and gloom everywhere, James is feeling pretty chipper.
Recession is going to hurt. Some of us more than others. Those it will hurt most are those who have been most addicted.
Look at it as cold turkey. Yes, it'll be hell for a while. But we'll all feel so much better and brighter for it afterwards.
And those wailing bankers and salesmen? They even call themselves dealers…


TWO wars they shouldn't have got into and will struggle to get out of. An economy massively in debt and in its worst shape since the 1930s. Crises in industry, energy and health. Barack Obama is certainly taking over at a tough time. Which presents a huge challenge – but also a huge opportunity.
Time to start again and build things properly, from the ground up.
He's already made a great start on one of the big issues – mending America's reputation abroad. In other ways too he needs to think big.
After the Great Depression, it was war production that really got America's economy going again. With a similar spirit – and arguably even greater need – Obama can dig it out of the present hole by pumping resources into energy-efficient, climate-friendly infrastructure.
Not Texan and Alaskan oil and gas, but wind-turbines on the prairies, solar panels in the desert. Not wide asphalt highways but up-to-date high-speed railways.
hIs friendly meeting with George W Bush in the White House may have been good diplomacy. It makes sense to ensure the smoothest possible takeover.
But once in the chair, he should waste no time undoing some of Bush's worst excesses. Like the loosening of control on mining, drilling and other favoured – and damaging – industries.
He must put an end to timber lobbyists running the Forest Service and oil lobbyists editing climate reports. End the agriculture policies that subsidise the most wasteful producers of the least healthy crops.
While he's at it, the use of torture and "extraordinary rendition" should be stopped at once. As should the issuing of "threat levels" that serve no function other than to keep people anxious and willing to accept infringements of their rights and privacy.
And of course there's the small matter of a humane withdrawal from Iraq to consider.
It's a lot. But what a lot there is to be gained too.

Friday, 7 November 2008

A change I'd like to believe in

CHANGE is the watchword, and boy have we got a change coming on.
Not just because we’re about to have the first black US president. Barack Obama may be in one sense the first “person of colour” to hold the office, but he is also a person of all colours and of none.
Not just because his victory was so sweeping it sweeps away the sense of dirt and corruption that until this week still hung over from the “lost chads” election of 2000.
Not just because the worst president in over a century is about to be replaced by a man who shows every sign of being the best in at least that long.
And not just because the Democrats may just have struck a life-preserving blow on behalf of democracy itself. Which may or may not be a very good thing.
We have become used over many years to American being not just the world’s policeman, the world’s bully, but also the big brake on world progress. And that, if Obama fulfils his huge promise, could be about to change. Big-time.
President Nicolas Sarkozy of France is centre-right, with the emphasis on the right. Ditto Italian prime minister Silvio Berlusconi. Angela Merkel’s Christian Democrats are the Tories of Germany. The Conservatives are in power in Canada.
Overall, Obama will be the furthest left-leaning leader of any country in the so-called G8 group of the world’s major industrialised democracies. And that’s before the Tories win the next UK election.
While much of the world is moving worryingly to the right, we might have to start looking to the USA as a beacon of reason and decency. How weird is that?
Before we get too carried away on the glorious wave of Obamamania, though, a couple of warnings.
One is to recall the national and international euphoria that greeted John F Kennedy’s election in 1960.
In the words of one dissenter: “Kennedy was too good-looking, too glamorous. A man who looked like that could get away with anything. That’s why I wanted ugly Dick Nixon to win.”
Then there’s the view expressed, perversely on the face of it, by my friend Simon. He’s the only person I know who wanted McCain to win – and it wasn’t because he doesn’t like Obama.
In his view, Bush is leaving the US economy in such a calamitous state that it’s bound to crash and burn whoever is in charge. And he reckons whichever party was in charge for the next four years would be finished for a generation by the inevitable disaster to come.
I do hope you’re wrong, Simon – though I can see the sense in that view.
The more optimistic one is that the shrinking of US waistlines, gas-tanks and military operations will make the world a safer and better place. And that it can be accomplished by charismatic leadership good enough and strong enough to maintain popular support.


ON this glad day, I’d just like to say a word for the gallant losers. John McCain, who is nothing if not gallant. And Sarah Palin, who’s a loser.
She is also, let’s admit it, very very funny. All the more so because she doesn’t mean to be.
Now we can enjoy her act in safety, knowing that a woman who makes Maggie Thatcher look like a pinko and George Dubya Bush an intellectual is not going to be one heartbeat away from ruling the world. Phew.