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President Obama, do you know where your IMF Boss is tonight?

By John Charles Dyer, UK Correspondent.

25 May 2012.  IMF boss, Christine Lagarde warned Greeks in a Guardian interview not to expect sympathy from the IMF, despite being reduced to scavenging garbage bins to feed themselves and their children. Her blunt messages- stop whining, take responsibility, pay up, and don’t expect the IMF to soften the terms of austerity.   The interview provoked outrage in Greece and in England. In England it prompted an investigation that adduced the allegation that Lagarde, while she demanded the Greeks pay their taxes, herself does not pay taxes on her salary.

But does it provoke outrage in the White House? Or does Christine Lagarde speak for the President? 

It is not illogical to infer that she does speak for the President

Lagarde heads the IMF.  Although she is not technically an employee of the US administration, it does not take the microscopic scrutiny of a Sherlock Holmes to see how much power the US wields in the IMF.  It has long been recognized and the US criticized for pushing a “neo-liberal” agenda of free trade in a no holds barred global free market.    While the US voting share of 16.75% of votes may seem small, it is an effective veto power over key decisions. For example, changes to member voting power must be approved by 85% of the votes. With 16.75% of the vote the US can block China, for instance, from having a larger share of the votes in the future to reflect its ramping economy.

There are other examples. In 2010 Germany called on the US to give up that veto power but the US has not and Legarde herself recently acknowledged the importance of US leadership in the global economy.  

So when Legarde makes a point of demeaning the Greeks and their agony, when her speach may be seen more like a loan shark than a stateswoman, is she speaking for the US?  

It certainly looks like it.  There is  little doubt the US could reign in Lagarde and change her tone if the US chose to do so. It has been a week. The US hasn’t done so.

What are we doing, President Obama? 

We have aligned our nation with those who replace  democratically elected leaders with functionary “colonial governors.”  These functionaries enforce (for a Eurozone and IMF led by social conservatives) odious loan terms of draconian austerity, despite that austerity’s failure to achieve its stated purpose and despite the US public position Europe should turn its attention to growth. 

I know this is a complicated situation of serious stakes and difficult to assess risks, solutions, and, dare I say it, opportunities. But Christine Lagarde’s statements and IMF actions in conjunction with the Eurozone leadership contradict every precept for which the US once stood in the world.  In my lifetime I have watched with growing horror the slow motion train wreck that has been the transformation of the US from world wide symbol of government devoted to human potential and the common good to a world wide symbol of the imposition of its opposite.  

 Many had hoped you would change that.

 Where is she tonight?

Last week Lagarde was a busy lady.  Not only did she tongue lash the already burdened Greeks, she, speaking for an "independent" IMF, expressly and unequivocally supported the austerity measures voluntarily undertaken by Prime Minister David Cameron and Chancellor George Osborne even as she delivered an IMF report urging a plan B.   Both Cameron and Osborne have said in the past that the US wants to imitate the UK approach in the US. Do Lagarde's comments reflect the truth of that assertion? Or is the US steering the British electorate? It can't be she is off the reservation, can it?

That was last week, President Obama. Do you know where your IMF boss will be tonight? Do you know what she will be saying and doing? When she does, will she speak for you?  

I pray the answer is "No." I fear the answer is "Yes."

Europe's $1,000,000,000,000 game of chicken reaches tipping point

By: John C. Dyer, UK Correspondent

17 May 2012.

Darkness returns to Europe.

Greece and Germany play chicken with the future of the Euro. Greece rejects austerity. Germany threatens Greece’s membership in the club. But the estimated cost for such an exit approaches $1 Trillion. No one will escape being burned. 

It appears Europe’s long delayed Kobayashi Maru can no longer be put off.  The Greek electorate's rejection of austerity 6 May and Greece's subsequent inability to form a government in the face of fragmented power have forced the issue.   

Pundits who claim it was inevitable are wrong. Europe chose it.   

Europe tonight reaps the consequences of buying in to a “change the dial” public relations campaign to “rebrand” as “responsible finance” the extreme social order of social extremists.  The disabled in the UK once again eat gruel for Tea. Once prosperous Greeks sift garbage dumps for food.  The irresistable force of a people caught between the devil and the deep blue sea piles into the immovable object of Social Conservative will and mores.

Europe's leaders seem unable to grasp the necessity for a responsive change in strategy.  They remain locked in a concrete of their own manufacture. Today Prime Minister David Cameron firmly reaffirmed his commitment to austerity. He "just knows better." Yesterday Chancellor Merkel, while making accommodating noises about Greek growth, reaffirmed her demand for austerity. Germany's new "Iron lady" isn't for turning. 

Both positions have their partisans. Both positions are unable or unwilling to compromise.  

There was a time when we understood that controlled default is preferable to sustained insolvency and human degradation. No more in Europe. Europe's leaders see repayment of inflated debt to an unregulated finance sector that gambled wildly and unscrupulously as of greater “moral” priority than the food, shelter and health care needs of its indebted citizens.

Europe's leaders see the prospect of penetrating Chinese and Indian markets as more vital than rebuilding the general prosperity at home.  Europe's leaders scarcely seem to care any more whether the people believe their arguments that somehow they will rebuild the economy by reducing wages and benefits.  Europe's leaders "just know better."

The greatest single growing employment category in the UK is “part time self- employed.” That frequently translates broke.  Unpaid Internships “count” in the “employed” category. Nobody is fooled, but everyone calls the shift from full time well paid employment to part time occasionally paid employment or free internships as “good news.” 

In Europe they call this “competitiveness.” Some of us call it betrayal.    

Dialing down the rhetoric, it remains a Kobayashi Maru postponed but not defused by bailouts and engineering caretaker governments.   Rejected by the voter, even in Angela Merkel's home district, the clash between popular will and leadership seems to have reached tipping point.

The US would do well to take note.  

What happens in the US if the Euro collapses?  

I don't have a calculation. But consider, 46.2 million already live in poverty.  At least a quarter to as many as 40% (depending on whose estimate you believe) cannot afford to pay their medical bills.  

Electoral rejection of “the Narrative” tests Europe’s commitment to democracy

Electoral rejection of “the Narrative” tests Europe’s commitment to democracy

By John C. Dyer, UK Correspondent 

9 May 2012.  

Elections in the UK, France, and Greece 3 May and 6 May made clear, the voters have had “enough” of the prevailing “Narrative” undergirding “austerity” and “competitiveness.”

In the aftermath, the purveyors of the prevailing “Narrative” urgently sought a reset button. So clear was the electorates’ rejection of that narrative, so clear the demand for change, both Prime Minister David Cameron and Chancellor Angela Merkel felt compelled to say publicly and firmly neither would change course. Their rejection of what they themselves say they understand to have been the voter’s clear message opens a new and dangerous chapter in the story of Western democracy.  

France 

6 May the French electorate chose Socialist Francois Hollande over Conservative Nicholas Sarcozy, 52% to 48% with an 80% voter turn out.  Hollande promises to shift French focus from austerity to growth. He challenges Europe to deal with the banks. In his victory speech, Hollande spelled out the message to those who may have hoped his campaign posture had been “electioneering.”  In France the prevailing narrative had encountered a new narrative.  That narrative is, “Enough. Time to grow.”   

UK

3 May the UK electorate - those who voted - punished both Conservatives and Liberal Democrats at the polls.  The Liberal Democrat share of local government, its strongest connection with voters, fell to its lowest levels since the formation of the party.  Conservatives lost a substantial number of seats.  Of even greater long term significance to Britain’s democracy, turn out fell to just over 30% of those registered to vote.  In some places it was 8%.   That is 30% of  those who had been interested enough at one time to register and remain eligible to vote. 

The message of disaffection with the prevailing narrative is clear, however. All the major parties embrace austerity in some form. As Speaker Bercow said, the public perceive little difference between them.  The French on the other hand saw in Hollande a difference. That is the reason the same rejection of austerity saw an 80% French turn out but a 70% British turn off. 

Greece

6 May the Greek electorate threw out the governing coalition of the two most established Greek Parties.  As of 9 May the politicians appear impotent to establish a viable replacement coalition to run the country.  But pretty much all these many parties have in common is a rejection of austerity-tied bailouts as they now stand.   While critics wish to dismiss this as extremist anger, as of 8 May even the head of the Athens Chamber of Commerce called for renegotiation of Greece's bailout.

Wherever Greece may lead, whatever concessions Hollande may be able to negotiate from Merkel, it is clear that a significant percentage of voters across Europe have had enough of the prevailing narrative. The wave of reaction has now claimed France, the Netherlands, Greece and the UK electorate.  France, Greece and the Netherlands appear willing to embrace uncertainty rather than continuing surrender to Social Conservative imposition of austerity and competitiveness.   

Anxiety 

The markets initially reacted with jitters, a hiccup reported with a sense of forlorn worry by reporters.  How the markets would react was, indeed, the first and primary thing on reporters' minds.  Some reporters did not even attempt neutrality. Others did, but were unable to shake the narrative’s framework of “truths” and arguments even as they attempted neutral analysis.  They often appeared the proverbial deer in the headlights. 

Standing their ground

Not to worry, markets. Not to worry, media. Cameron and Merkel are "not for turning.”   

Act III in a Shakespearean tragedy called "Murdoch" opens at Leveson

By John C. Dyer, UK Correspondent 

Act III in a Shakespearean tragedy called “Murdoch” began to unfold in London on 24 April 2012.    Leveson Counsel Robert Jay and Judge Leveson both questioned one-time Murdoch heir apparent, James Murdoch, over a period of several hours. Rupert Murdoch followed his son on 25 Apr 2012.  

Hours telecast of James Murdoch "on the hook"  

BBC telecast James Murdoch’s testimony in its entirety.    During the afternoon, Jay focused on communications between Murdoch and his representatives, on the one hand, and government political appointees, on the other.  While there is much more to come, it may have said it all when Murdoch, asked what he thought of his PR man's comment that his procurement of confidential information had been "illegal" replied that he, Murdoch, had considered it "a joke." At the time Murdoch had already been grilled by Parliament on hackgate. 

A quasi-judicial decision bumbled, twice 

These communications concerned a quasi-judicial decision before government Ministers last year. The government had to decide whether or not to approve News Corp’s bid to completely take over the independent television network, BSkyB. News Corp already partially owned BSkyB (and still does).  Other television networks and newspapers opposed the approval.  

As a quasi-judicial decision the law’s expectation was and is that the process would be even handed, the decision maker impartial in making the decision. The law requires the decision maker to show both proponent and opponents due process of law. 

The decision first landed on the desk of Business Secretary Vince Cable. After a news sting showed Secretary cable to be biased against the bid, the Prime Minister transferred decision making to Culture Secretary Jeremy Hunt.   

Levenson Counsel Jay quickly exposed James Murdoch’s rebuffed efforts to meet with Secretary Cable separately from the opposition.  By the character of his questions, Jay coloured these efforts “inappropriate,” and Secretary Cable’s desire to “remain independent,” “appropriate.”  

Murdoch disagreed, arguing that it was important, necessary and usual for someone making such an important decision to meet and discuss viewpoints with parties.  Murdoch testified he expected the other side was doing the same.   Murdoch also pointed out that, as it turned out, he, Murdoch, had reason to be concerned, citing Cable’s exposure as biased.   

Jay countered, pointing out that Cable’s bias led to his removal from the process. His bias and communications were inconsistent with the role of a quasi-judicial decision maker. Jay continuously described that role, throughout his examination of Murdoch, as “the judge.”  

Jay then exposed a number of “ex parte” communications with government agents, including Jeremy Hunt. These communications seem to show that others working on behalf of Hunt indiscreetly revealed the contents of confidential, high level deliberations among the government officials considering the situation.  Those communicating with Murdoch seemed to continuously reassure the mogul that things would work out.  Murdoch’s substantial anxiety on this score provided significant documentation.

The smoking gun e-mail

One specific email appears to be the smoking gun. Hunt aide Adam Smith wrote Murdoch PR consultant, disclosing the details of the speech Hunt did in fact make the very next day in the Commons. This email undercuts the spin that the claims were a PR man's braggado with his client, as does another email telling Murdoch that he, Hunt, wanted to talk with him by phone, a conversation which subsequently took place.

It should be noted that Hunt subsequently issued a statement saying this could all be explained.  Conservative MPs point out that the documents in question attribute statements to Hunt but are not from Hunt.  They in fact expressly disclaim direct contact.  Smith resigned 25 April, taking "the bullet" for the team.

It is true that even a smoking gun from an aide is not necessarily proof of Hunt's misconduct. However, the Ministerial Code makes Hunt responsible for the conduct of his aides on his behalf, so it is not a get out of jail free card.  A fair reading of Hunt's performance before the Commons on 25 April, putatively to explain and clear it all up, is that Hunt did provide some evidence that conflicts with a presumption of undue influence, but Hunt failed to clear up major elements of the issue and only intensified the calls for his head.

Again, Jay characterized Hunt as “the judge,” colouring the communications as indiscreet, ex-parte, and showing bias.  Jay further raised the comparison between the Prime Minister relieving Cable for inappropriate behaviour but not Hunt.  Hunt eventually was spared the final decision by Murdoch’s decision to withdraw the bid. 

Again, Murdoch disagreed with Jay’s characterization. Murdoch argued it was and is entirely appropriate, necessary and usual for such discussions to take place. 

Decision making in a political environment

The question whether it was, or was not, appropriate for Cable to have met with James Murdoch, or Hunt (if true) and other officials to communicate with James Murdoch in light of the quasi-judicial nature of the decision-making process goes to the heart of how public officials deal with self- interest politics.  The narrative Jay exposed is closer to situation normal than perhaps many would find comfortable to believe, and it is for good reasons. It is practical political realism.  

Change whispers the wind, but change requires uncommon courage and vision

By John C. Dyer, UK Correspondent 

22 April 2012.   

“Change,” whispers the wind. "Momentum," adds the tide.  "Struggle," replies the rocks.

The French appear about to change out its President, exchanging a leader from the Left for a leader from the Right in a vote of potentially historic significance for the West.

The first round of the French presidential elections is complete. With 80% of the vote counted, a 70% turnout gave Socialist François Hollande 28.6% of the vote, the incumbent Conservative Nicolas Sarkozy 27.9%. 

Since neither have a majority, the election moves into its second round.  Only Sarkozy and Hollande remain. They have two weeks to campaign. 

Polls and pundits favour Hollande to take the second round by 7 to 8 points.  But no one knows for sure how the 20% who supported the far right candidate will vote. Sacrkozy is a fighter.  However, if Hollande does win, and this is of course not assured only projected, Hollande will take the Presidency from an incumbent who is personally unpopular, but whose economic policies represent conventional wisdom in the Eurozone. Whether or not Holland succeeds, it is clear the French vote is a vote of dissatisfaction, an electorate demand for change, whatever the direction of change turns out to be.  

If Hollande wins, it will be more than a vote of disenchantment with Conservative handling of a failing French economy.  It will be a vote for a change Left. Hollande leads from the Left. He reportedly may include Communists in his Cabinet. His election would be the first for the Left in France for a very long time.  It is already the very first time an incumbent hasn't garnered the largest vote in the first round. If he is elected, Hollande’s campaign will represent a significant bell weather for both policy and politics in the Eurozone.  His election would mark the end of what had been a trend for Conservatives across Europe. 

UK polls now seem clear that momentem has shifted  

Labour has gained an 8-10% lead over their next nearest rivals, the Conservatives. This represents a shift of 10-12 points since last month. UKIP syphoned off as much as 4% more of Tory support for a total of somewhere around 8%.  Conservative partners in Coalition, the Liberal Democrats may or may not still be ahead of UKIP, a party Liberal Democrats once mocked.  

Mark these dramatic swings down to the wide spread perception Liberal Democrats have been irrelevant, and to Conservative excesses, miscues, poor judgement, indiscipline (perhaps corruption), radical reforms, failing spin and failing management of the economy. Over 2/3 of polled voters reject government policy.

Peeling the onion: British political mood following the 2012 budget

By John C. Dyer, UK Correspondent 

I recently introduced my wife to Shrek. It was another happy cross-cultural moment.  

One line from the movie particularly stands out. “Ogres are like onions ... they have layers.”   I recall Shrek’s line today as I struggle to explain the state of British politics to a readership that includes both British and American readers. It struck me as the perfect analogy.  At the moment, British politics is an ogre. 

It has layers.

First Layer 

Multiple polls from 16 April through 17 April show Labour surging to a 9-10 point lead over Conservatives. Labour support increased to around 41 to 43% of those intending to vote. Conservative support fell to 32%.  For the Tory Party this represents a swing of at least 10 points since March and a decline of 10 points since its last previous high at the general election.   Looks like good news for Labour partisans, bad for Tory. 

But ...

Second Layer

It may be actually a shaky net 2-3 point gain for Labour over its last post election high of 7 points last summer.   Both the dramatic swing in Tory fortunes from as much as 2 points ahead of Labour in March to as much as 10 points behind in April and the 9 point swing from Labour’s summer 2011 high to March, 2012 low may demonstrate a certain transient liability in British voter mood.  

On the other hand, a poll out in advance form the night of 19 April shows Labour opening up a 13 point lead over the Conservatives. If this lead holds it will mark a significant movement toward Labour. The detail was not available as of the writing of this article. For the time being, even a 13 point lead, given standard of error, is as consistent with transient liability as it may be with a more significant long term shift. That analysis will have to wait for the future.

 Third Layer

Each of the swings appears to have been triggered by a crisis in leadership credibility.  

Labour lost its lead as a new leader struggled to establish his personal credibility. His party struggled with who it wanted to be when it grew up. In its thrashing about Labour alienated elements of its base while failing to impress the swing voters it so desperately sought.   At the same time as Labour struggled with itself, a confident and united Coalition portrayed the crisis in the Eurozone as vindication of Coalition policies, aided and abetted in no small measure by “experts” and a media perhaps infatuated with the prevailing economic view point. Many shared the belief that Labour had caused the country’s economic woes. 

Conservatives lost their lead from a combination of missteps and policy excesses leading up to and including the budget. They shook both the working harmony of the Coalition and the reputations of the Prime Minister and Chancellor for competency, honesty, and interest in the general good.  I  documented these crescendoing mini disasters in previous articles, warning weeks ago of the consequences of what I saw to be Cabinet indiscipline.  

Conservatives did not recover from these mini disasters over the two week Easter break.  Worse for the Conservatives, the damage seemed to harden into a public perception of incompetence. Conservatives themselves seemed to validate this assessment as they attempted to spin the outcry as the consequence of an incoherent Coalition narrative, the failure of the Communications team, or the Prime Minister’s hands off approach and use of Civil Servants to compose the Number 10 Policy Team.  This spin just served to reinforce the impression of incompetence. 

The polls that show Conservatives losing 10 points also show a fourth party, UKIP (The UK Independent Party) gaining as much as 7 points from last summer. They also show UKIP drawing even with or leading the Liberal Democrats at 8-9%. This latter poll standing is a pitiful remnant of the Liberal Democrats’ pre-general election high of 23%.   

It is debatable what this shift to UKIP means for the respective partisan fortunes of UKIP and Tory Parties.  The 19 April poll shows UKIP support falling back to 7%. But whatever the debatable points concerning UKIP's fortunes, it is conventional wisdom the Liberal Democrats lost support because the Lib-Dems are considered a) indistinguishable from the Conservatives on all points of interest to voters, and b) so infatuated with power as to be untrustworthy with stated commitments.  

I would submit that is also the meaning of the 10-12 point reversal of the Conservative’s March lead, as it was with the electorate's general election disenchantment with Labour. In short, it is at least as likely voter confidence in Coalition competence and reliability has been shaken by missteps and excesses as it is Labour has gained in voter confidence. 

 Fourth Layer

The shifts in partisan fortunes disguise a British electorate that at least through the 17 April poll remains evenly divided between Center to Right and Center to Left. 

Although former Labour activists helped to form UKIP, UKIP today is a determinedly Euroskeptic Party in most ways philosophically similar to the Conservatives.  Its leadership is substantially if not entirely made up of former Tories.   

More importantly, the total for Conservatives, UKIP, and Liberal Democrats has remained unchanged for almost the entire duration of the Coalition since almost the first months of the Coalition as it became clear the course the Coalition was setting. Soon thereafter the aggregate total settled in to approximately 50% of the electorate. 

What do these three parties have in common?  A commitment to free market economic liberalism and the related “Protestant” work ethic. While the Parties’ separate market shares may shift between them, the shift does not represent so much rejection of the broad economic policy framework as disillusionment with the abilities or character of those executing that framework.  

As long as 50% of the British public “buy in” to this paradigm British policy makers, regardless of Party, will not be able to introduce policies that stray very far left from the framework and its assumptions. Even if the 19 April 13 point lead continues or grows, this by itself would not necessarily indicate a rethink of the prevailing paradigm, although the aggregate for Tory, Liberal Democrat and UKIP would fall below 50%.

In Bradford, the disenfranchised make a choice from no choice

By John C. Dyer, UK Correspondent

30 March 2012. Bradford.  Respect Party candidate, “Gorgeous George” George Galloway takes a predicted “safe” Labour MP seat away from Labour, beating his nearest opponent by over 10,000 votes.  

 The victory that "shouldn't" have been

Galloway’s victory shocked the political elite (professional “pol,” pundit, and press).  The seat had been Labour’s for some time. Only the week prior Labour predicted victory, allegedly basing its predictions on assurances from local pols.  

It is not yet clear how the pols got it so very wrong. It just may be Labour counted the chickens of a fortnight of bad press for the Tory/Liberal Democrat government before they hatched for Galloway instead of Labour. 

But why Labour lost, despite Labour’s own agonized paroxysm of navel gazing and Tory’s glib spinning, is not the important question posed by Galloway’s victory.

The focus on Labour hid a bigger and wider victory. Galloway trounced the Tory candidate by an even greater margin than he trounced his Labour rival. The Liberal Democrat lost so badly his campaign forfeited its filing deposit.   

The Tory Party leader, Baroness Warsi, spun the Tory loss, pointing out her party never had an expectation of victory. True, but it doesn’t explain the margin of victory, does it.  It also begs the question what, if any, role can be ascribed to a reaction to Local Government Minister Eric Pickles' former role as the leader of the Bradford Council. Bradford is among the most segregated and deprived communities in Britain.

The Liberal Democrats simply slunk off to lick their wounds and worry about the future.

The pundits were (as ever) quick to explain the victory in line with their published pre-election views. The Guardian concluded that overly cautious “politics as usual,” with its fear of upsetting Middle England, had “turned poison” for Tory, Labour, and Liberal Democrats alike, thus spreading the embarrassment among the parties.  In a separate article the Guardian attributed the victory to Muslim women.  

The Mail picked up on the Muslim bit. The Mail submerged the victory in a diatribe on a Moslem immigration that had not been properly assimilated.   

The Sun and Telegraph picked up on the theme of the woman’s vote, but both used it to highlight Galloway’s subsequent announcement of a fourth marriage.  The Telegraph injected a lament into its “examination” of the question, “why women can’t resist political philanderers.”  Hence, the story wasn’t an “outsider” scoring a dramatic victory over established parties. The story was a smooth-talking philanderer deceiving vulnerable women.    The Sun revealed and reveled in claims by Galloway’s third wife that Galloway had never properly divorced her.   By the 5th of April this had become the story in the Guardian, also.   (While not excusing the allegation if proven), perish the thought that Galloway’s victory could have any lessons beyond the puerile. 

It seems to me that the pundits never really so much neutrally analyzed what happened as set its implications for the established parties at “de minimus.”  It was the victory that shouldn’t have happened. It was a “one off.” It was a victory that wouldn’t have happened if Bradford had been in its right mind.  Gawd, did they every blow it.

Galloway's "take"

I understand why Gorgeous George, as he is called, might make one’s skin crawl. The silver tongue, the impassioned anti-establishment rhetoric, the volatile personal style, the shades on a cloudy day, these remind me of Jim Jones (not a positive memory). They evidence the unpredictable, and maybe the out on the edge.   

But the problem is, he did win. He won by 10,000 votes. The pundits did not expect it. This victory cannot simply be tarnished with mud, hoping it was all a bad dream. It means something, holds lessons, intuition suggests, for those in power.  

As the earth beneath their feet begins to crumble

By John C. Dyer, UK Correspondent

29 March 2012.  London. David Cameron’s government has not been able to buy a decent headline since the Chancellor announced the 2012 budget.   It may be the momentum has shifted against the UK’s “teflon” Prime Minister - both across a formerly friendly press and in the polls.  The situation raises a serious question for the United States.

Polls

Polls already show what may be as much as a 12 point shift from Conservatives to Labour. One poll, results published 28 March, even shows Labour now leading both Coalition partners together.    

It may be premature to declare this The big shift. Even if it is a factual change it may be transient.

But it doesn’t feel transient. The pundits are not treating it as transient.  Pollsters have not yet disclosed the specifics pertaining to undecided voters, but I would bet a small lunch that the figures show a possible shift from undecided to decided.  Perchance the Prime Minister failed to notice, the media helpfully reminded him.   

Tory Treasurer Cruddas and “dining for donors”

Even as the government reeled from the initial budget reaction, another story broke that must have felt like a body blow.  The Sunday Times “stung” the Tory Party Treasurer, secretly taping him offering influence and a private dinner with Mr. and Mrs. Cameron in Number 10 in exchange for big bucks. Cameron offered this perk to persons he thought were lobbyists serving big donors.  The Daily Mail seemed especially fascinated by this news, carrying Cruddas promise that the deal would be “awesome” for the presumed lobbyists' businesses,  the subsequent resignation of Cruddas  and, in case anyone missed it, the guest list of those who had dined.   

Reaction was swift and severe. Labour predictably called for an independent inquiry. Channel 4’s Cathy Newman brilliantly cross examined a shifty-eyed Tory spokesman, Michael Fallon. I have little doubt he left the camera feeling like he had just endured a frontal lobotomy without anesthetic. The conservative Daily Telegraph unequivocally condemned the questionable practice.   I can reveal that an e-petition has been filed seeking a Commons debate on the appointment of an Independent Prosecutor, and funding of an office to investigate not only Cruddas but several different allegations of ministerial misconduct lodged against several Cabinet Ministers. 

VAT on heated Pasties

The government couldn’t even catch a break on “pasty-gate.”  Among the hidden nuggets I predicted would emerge it emerged this week that the budget subjects the Cornish folk food, pasties, to VAT if served heated.   How the provision will work has caused confusion the helpful have tried to clear up and provoked threats of litigation from a food chain.   The Daily Mail chuckled that all sorts of politicians had become born again pasty lovers.   The Telegraph went after Osborne.    Litigation from an interested retailer and amusement/bemusement in the press aside, the newly revealed application of VAT buried in the budget also brought considerable heat on the Chancellor, highlighted by both the Independent  and the Guardian.  

Fuel Transporters Strike

The bad news cycle continued with press reaction to the Government’s handling of a) negotiations with the Unite Union over wages, benefits, and working conditions for drivers, and b) a possible fuel transporters strike looming in the future.  Although no strike has been called (and the Union must give 7 days notice before doing so), Cabinet Secretary and negotiator Francis Maude recommended car drivers top up and even keep a spare can of petrol on hand in case of strike.  The Government also unveiled plans to order the Army to substitute for drivers in the event of a strike. 

If the idea was to bring pressure on the Union, it backfired. Retailers accused the government of intending to create a crisis in order to solve it.  Drivers took up Maude’s advice with the result pumps went dry and fuel prices soared as drivers panicked.   Jon Snow added that of the government's David Hendry to Channel 4's collection of lobotomized brains. 

Amid assessment the government’s gambit had gone horribly wrong, the government admitted Maude had made a mistake.  In case the government had missed the connection between the coverage of the pasty affair and the strike, the Sun helpfully connected the dots.   

Deficit

Pasties and silly PR in advance of a possible strike may be more symbolic than substantive, but they are the kind of symbolic issues that pave the way for the press and voters alike to look differently at the substantive issues.  One of these is the deficit. 

The government’s austerity programme was supposed to be worth the pain because it would bring the deficit into line.  But it is clear from the budget detail that the government would have had to admit that, 2 years in, the austerity programme has failed to solve the deficit had the Chancellor not penciled in £10 billion in to-be-determined further reduction to welfare, and a more than £2 billion raid on the reserve fund for Afghanistan that appeared suddenly in the budget announcement last week, and a £.5 billion “crawl-back” of funds from the NHS budget.    

Each in their own way the failure of the government to solve the deficit were made clear by This Is Money, the Guardian, and the Telegraph in two articles.  

GDP

The economy is another such issue. And here too the news cycle was not kind to the hither-to-fore teflon Prime Minister.   The BBC and Metro announced the glum news. The nation’s GDP shrank more than expected in the last quarter of last year.  For those who did not understand, the Guardian made it clear. The UK economy is sick.

Despite the advice or public concurrence of numerous “experts,” the Bank of England, the OECD, and the IMF, UK’s austerity and privatization have failed both to appreciably claw back the deficit or dig the economy out from its hole. In fact, austerity seems to have only made it worse.  

Which brings us to the US 

In two previous articles I pointed out that the US, through its involvement in the IMF, has been promoting the European Plan adopted also by the UK.  I questioned not only the wisdom of the plan but of the hypocrisy of the US promoting that plan for Europe while rejecting it for the US.  

That the US continues to do so now is particularly perplexing. Not only has the US resolutely refused to institute such a programme for itself, but the evidence mounts the US is right. The US economy is doing better than Europe’s. In fact, only one nation in Europe seems to be growing significantly, and it is the one country that rejected the European Plan, Iceland. The Eurozone appears headed for recession. I argue the UK already is in recession. Ireland, Greece, Spain, Italy- the tales are all of gnashing of teeth and pain of almost Biblical proportions. 

So, is it US policy that Europe should fail in order for the US to succeed? Althouth I do worry about certain trans-Atlantic "partnership" organizations, I suspect such suspicions give the US too much credit for strategic thinking, at least on this issue. The partners may be capable of it, but that does not mean the US is doing it with the economic issue.

But it is perplexing.  

Also perplexing is the US relationship with the UK.  The week prior to the budget announcement President Obama feted Prime Minister David Cameron in what the press in Britain described as a love fest. To me it sounded more like, the family that kills together stays together.  

Or is it, sticks together? It was just days later the Chancellor announced the surprise move to raid the Afghanistan reserve, taking over £2 billion off the deficit he would otherwise have had to declare. Was this a case of friends helping friends?

The last thing the US needs is for Europe and the UK to one day conclude that the US sandbagged their economies in order to preserve its own. The US already has too many who view the US that way.   

I am not one of them.  But it does beg the question, what is the US doing in Europe. It also leads to a very serious question for the US.   It may be a premature assessment, but it seems to me the British press and voters may have figured out the Coalition.  As the earth beneath their feet begins to crumble, has the US?