By John C. Dyer, UK Correspondent
5 October Prime Minister David Cameron delivered the wrap up speech to close this year's Conservative Conference. A retrospective” may seem a bit premature, but is manageable. As a manager I once knew used to say (whatever the circumstances), “It’s all going well.” Team Cameron buttoned up the loose ends and delivered two confident messages. "We know you are hurting now, but it's all going well ... really." Embrace the neo liberal social revolution Conservatives across the West embrace and together the Conservative Party and an "unleashed" UK business sector will lead the nation to a brighter tomorrow. The Conference was, in short, as expected. One does not expect a political party to say, "to tell you the truth, we are making a right mess of it, aren't we. We have had everything all wrong."
Symbolic nod to the pain but stay the course - the message to a buttoned up "on message" Conference
The warm up to the conference began with the drama of Conservative MP Tyrie’s Tirade.
The media devoted hours of blah blah to dissecting its meaning. The meaning proved to be as I expected. The theme of the conference was “Leadership.” Tyrie dutifully provided Prime Minister Cameron with a crisis to resolve, which Team Cameron's top staffers promptly did, taking Tyrie very publicly into tow in a widely televised sequence. The press were about to interview Tyrie. Cameron's staff descended, removing Tyrie from the interview and shutting him behind a poorly closed door. Shortly Tyrie reemerged to sing from the Cameron hymnal. Tag Line- The moderates are in charge.
The warm up continued with a pre-conference interview in which the Prime Minister emphasized his government did have a real bang up growth plan the Chancellor would duly reveal during the Conference. The Prime Minister was long on generalities; short on specifics. He indicated that the plan would include some sort of incentives to build 200,000 new homes, creating 400,000 jobs in the process.
Then Dave Cameron, the man, apologized for offending women with his “old boy” humour. Polls show that the Prime Minister has a PR problem with women. It’s as much about specific cuts that hurt women as his humour. But in the interview a sometimes very charming Prime Minister did his very best to turn on the charm and mend fences with the apology.
Still the part of “compassionate” Conservatives
Then David Cameron, the leader, declared he and his party remain the party of “compassionate” Conservatives. They understand how the people are hurting under the Chancellor's austerity plan. Having acknowledged he felt the people's pain, Cameron the leader went on to say that he cannot alter the austerity plan. His explanation trailed off into a “technical” discussion of the difference between a debt induced crisis and a lack of spending induced crisis.
The personally powerful Conservative Leader, Baroness Warsi, reinforced the Prime Minister's messages. She reaffirmed the Conservative Party is no longer the “nasty party,” but the party of “compassionate conservatives.” She also echoed the Stick-to- the-Plan as leadership message.
Leaks to Media completed the process of setting the stage. The opening big event for the Conference was to be a speech by the Chancellor. As reported by the media, the Chancellor was noted for pulling out game changing surprise announcements in such speeches.
The question became, what would it be this time? Would it be an announcement of the growth plan for which commentators, the public, and even organizations representing old Conservative allies in business had been calling for a month?
Enough Already
Even before the Chancellor had made it midway into his speech on 3 October, Sky News had the poop. Sky reported only a few minor sweeteners with no explanation of the Prime Minister’s “housing” building programme. Sky also reported the “reactions” of Labour “shadow” ministers and Union leaders. The first I found irritating. I like to hear a speech as it is spoken not before it is spoken, while it is being spoken, and after it has been spoken, several times over. For me this now standard PR technique for managing messaging is a little like knowing the result of a US national election within an hour of polls closing on the East Coast but before they have closed on the West Coast. It takes the energy out of the event.
Listening to his speech, Chancellor Osborne reaffirmed the government’s austerity cuts, arguing that the UK cannot borrow its way out of trouble. He argued the UK could not sacrifice its “precious fiscal credibility," which results in the UK being offered very low interest rates on government and private sector borrowing. He would not be tempted to abandon the course even to eliminate the 50p rate, a move dear to the hearts of Conservatives. The "leadership in charge stays the course" message.
Osborne did offer what may turn out to be more than symbolic initiatives to show that the government "gets it" that both the people and business are suffering under the austerity programme. First, he said he gets it. Second he promised to extend last year's freeze on local government council taxes (£72 per year per household). Third, he mentioned some investment in infrastructure, including authorization to proceed to construction in 2013 for a previously promised bridge across the Mersey (a not insubstantial £500 million project). Fourth, he announced help for small business in the form of £50 million in grants for business innovation. But the biggest announcement of the speech was his fifth.
Fifth Osborne announced he and Treasury will have worked out the details to extend possibly as much as a half billion pounds in "credit easing" to small business to counteract the failure of banks to live up to the expectations of the Merlin Agreement by giving private loans to small businesses at affordable rates. Sixth he indicated the government would speed up their planned Enterprise Zones for hard hit areas (making tax cuts and loan guarantees available to eligible small business). Although on the surface many of the Chancellor's initiatives seemed more hopeful and symbolic than significant, there were two exceptions, authorization of the bridge to proceed and "credit easing." More about this subsequently.
Standard and Poor’s Remarkable Timing
As Osborne spoke Standard and Poor, the same credit agency that lowered the US credit rating, reaffirmed the UK’s rating. Remarkable timing. During a BBC interview, Transportation Secretary Hammond reinforced three messages - "moderates in charge," "we've heard your pain," and "must stick to the Plan." Hammond knew of and had talking points concerning Standard and Poor's credit rating announcement, using Standard and Poor's announcement to punctuate the themes first presented by the Prime Minister, echoed by Baroness Warsi, elaborated upon by the Chancellor, and tied together by Hammond himself.
The following day the Prime Minister took to the interview circuit. His message? The speeches of the past two days showed that the Conservative leadership "gets it" concerning the nation's pain, is full of empathy and sympathy, but the only responsible option is to stay the course even though members in his own party have advocated change (the Leadership message).
Possibly some beef to the burger – maybe credit easing for small businesses
Potentially the most significant announcement in the Chancellor’s speech was that of credit easing for small business. However, it is difficult to tell because details have not yet been worked out and different "briefed" commentators described "it" differently, ranging from the Treasury buying buy private bonds to provide liquidity to the Bank of England guaranteeing packages of private loans so that small businesses may obtain favourable interest and terms. The details seem far from worked out. They will not be known until the budget presentation weeks from now.
But it is potentially significant. Although the Chancellor made a headline point that one cannot borrow Britain out of trouble, it appears that in effect that may be what he is about to attempt. Under at least one potential version of "Credit Easing," Osborne would be proposing a measure of potentially some Keynesian merit, because it could generate decent jobs. The £500 million bridge certainly is a project of Keynesian merit.
It will be some time before it is clear what the Chancellor intends and whether or not he can bring it off. These concepts seem somewhat at odds with the Prime Minister's uncompromising position concerning the origin of the economic crisis and the "only way out." Will the initiatives announced by the Chancellor turn out to be only a symbolic offering to facilitate a smooth Conference and the message of listening? I am not inclined to dismiss them out of hand. There are real possibilities that the Chancellor has at last found some beef for his policy burger. Fingers crossed.
Playing to the Base
Tuesday October 4th and Home Secretary Theresa May was next to bat. She played to the base. Polls show many Conservatives favour scrapping the European Human Rights Act. Secretary May drew significant applause from the Convention floor when she said she would "like to scrap the Human Rights Act."
The "but," however, was a big one. Coalition partners, the Liberal Democrats, are not going to agree, the Coalition agreement does not provide for it, the Coalition's Attorney General embraces the Human Rights Act, as, it appears from an interview conducted by BBC's Jon Sobel (see more subsequently), so does fellow Conservative, Justice Secretary Kenneth Clarke. Secretary Clarke pointed out that the Human Rights Act originated with Britain and its vigorous enforcement was and is Government Policy.
So Secretary May was not able to announce, assuming she truly believed it, an initiative to scrap the Human Rights Act. Instead she announced an undefined attempt to change the interpretation of the Act’s Article 8. Article 8 provides a right to a family life. In a recent case the courts have ruled the UK cannot deport a refugee Iraqi Kurd, even though he had been denied asylum and committed a crime. His crime? Hit and Run manslaughter of a young girl. Why? Because the Kurd had British children. To deport him, said the court, would violate his Article 8 right to a family life.
What is it Secretary May intends to do? She was not clear on this. Arif Ansari, political reporter for BBC North West tonight questioned her further on this point, getting the impression that the government was going to somehow instruct the courts that the court's interpretation was incorrect. It remains unclear whether she intends a resolution of Parliament or a letter from Justice. But Justice Secretary Kenneth Clarke was clear in another BBC interview following Secretary May's speech that Secretary May had not discussed this issue with him.
Whatever Secretary May does, BBC determined that at maximum it might have applied to 102 cases last year. But, the Convention as a whole liked what she had to say. It played well to the feelings of the base.
Busy Bees buzz the Fringe
Although largely successful in managing the first three days of the Convention, the Prime Minister's team did not quite have it completely "buttoned up." Busy bees buzzed in the hive.
I have already mentioned Secretary Clarke's interview with BBC following Secretary May's speech. Secretary Clarke in that same interview made it crystal clear that not only had Secretary May not discussed her speech with him, he did not agree with Secretary May's sentiments concerning the Human Rights Act or regret the decision to join the European Union (which he helped negotiate), despite polls showing 68% of Conservatives feel it was a mistake and the UK should withdraw.
Secretary Clarke also publicly questioned one of the anecdotes used by Secretary May in justifying her proposed changes. Secretary May alleged someone's deportation had been overturned due to a pet cat. Clarke refused to back down despite the support of Prime Minister Cameron and Immigration Minister Damien Green. The Judge in the case and Channel 4 backed Clarke's version. The flap, rather than Secretary May's speech, dominated Channel 4 News Wednesday night.
But Clarke, notorious for his spontaneous utterances, was not the only busy bee. Conservative darling, Education Secretary Michael Gove popped off his own politically risky opinion at a "fringe" event at the Convention.
Extolling Murdoch?
In an interview Secretary Gove extolled the virtues of a former boss, Rupert Murdoch, at a time when most political figures in the UK seem to want to distance themselves from Murdoch. It seems to have given rise to some awkward questions for the Prime Minister, who I am sure would have preferred the public associate him with his meeting the next day with Hugh Grant concerning the ongoing hacking inquiry rather than positive comments about Rupert Murdoch.
It is a perhaps a measure of the degree to which the team had nevertheless successfully buttoned up the convention that the Press turned on Tuesday evening to chatting about women MP's accompanying the Prime Minister in the absence of his wife wherever the Prime Minister went at the Convention. The press devoted time into speculating whether the team was using them as "eye candy" or to support a message that the Prime Minister really isn't an "old boy" offensive to women.
The Closing Speech
On Wednesday the 5th Prime Minister David Cameron delivered the Conference closing speech. Wrapped in vigor and optimism, it predictably defended the Coalition's policies, but unpredictably generally supported initiatives and ideals more to the right of center than previously associated with the Prime Minister (a notable exception was support for gay marriage). Perhaps that was just playing to the base, but the Media picked up on it, pointing out that the Prime Minister's speech showed energy and energized the Convention only on issues of social policy, not the economy.
Given that, it was interesting to note that the PM's initiative against gang culture, Ian Duncan Smith's "turning point" for the Cameron Prime Ministership, was not mentioned once. Perhaps we have moved on.
The style and focus of the speech embodied the central message of leadership. Cameron asserted he knows that times are tough and people expect government to spend its way out of a Recession. But, according to the Prime Minister, this is not a normal recession. It is a debt crisis, caused by too much borrowing by individuals, companies, and government. Such a debt crisis cannot be solved by borrowing - only by scaling back to live within one's means. The Coalition government has the right plan. It is sticking to it. As to the future, a neo liberal approach to the economy will give us the future and put the great back in Great Britain. He called upon Britain to find again its "can do spirit." The thunderous applause as the Prime Minister raised his hands at speech's end was predictable.
Evaluation
It's the economy, stupid ... a familiar phrase. It is key again in Britain. At the conclusion of the Prime Minister's speech BBC's Jon Sobel turned to a panel of three Conservatives and asked them rhetorically, “anything new?” His judgment was obvious. As Sobel went on to point out, at the end of the day it will not be words that evaluate the Prime Minister and his speech, but the performance of the economy. Having set the bar as "leadership" and told the opposition to take their reservations "to the Job Centre" because the Conservatives were going to bring Great Britain back, these words likely will be put before him time and again as the results fail to come.
As pointed out by BBC in its wrap up of the day's events, as the Prime Minister spoke, the IMF was urging European nations to rethink austerity in light of diminishing growth prospects, authorities released the latest economic statistics for Britain and growth in GDP last quarter was .1%, down by half from last estimates, Tesco recorded its worst profits in 20 years, Moody downgraded Italy's credit rating, strikes gripped Greece, and rumors of imminent Greek default have taken on renewed urgency.
Keynesian policy briefly explained.
In listening to the Prime Minister's speech and interviews concerning economic policy, it occurs to me some clarification of Keynesian theory is in order. Contrary to the associations the minds of some, Keynesians do not inflexibly and invariably urge deficit spending regardless of the problem. That is a misunderstanding of the theory.
Keynesians recommend “counter cyclical” government incentives and disincentives. In times of overheated growth Keynesians recommend savings and cuts to public spending. But in times of recession Keynesians recommend stimulus expenditures. The key to this approach is the “Paradox of the Multiplier.” In brief, when the economy contracts, contraction in government spending amplifies the negative effect, whereas when the economy overheads, contraction in government spending cools off the engine. Save in times of surplus. Spend in times of economic slowdown. In short, in times like these, with a flat lining economy across the globe, austerity measures are counter indicated. Keynesians would argue that the failure of governments to understand this in the early 1930s led to the severe Great Depression, following, important to understand, the same policies now being followed by the Coalition government.
In times when deficit spending is recommended, not all spending is equal. Investment in infrastructure supporting business trumps tax cuts and even investment in housing, although the last trumps tax cuts. The point is, a Keynesian approach would invest public funds in construction projects financed by, for example, a Victory Bond programme. It is about jobs and money to buy goods. It is not about spending for its own sake or to build a bureaucracy.
On this point, Channel 4 reports that the Prime Minister's speech writers had to rewrite the Prime Minister's speech. As widely reported prior to his speech, the speech was supposed to contain a bit urging the public to pay off their own private credit cards and live within their means. Team Cameron spent much of the time in the spin tent explaining that the Prime Minister didn't really mean that after economists reacted negatively to the pre-released version of the speech. And well they should have reacted negatively. As pointed out by Keynesian economists, a recession is no time for that. The gaffe led to the most thoughtful analysis of the economics of debt in general and government debt in particular I have seen on any television channel anywhere.
Politics 101
The electorate often asks itself, why? Why is it so hard to get politicians to decide upon a public policy that is good for the whole?
“Policy” is such a lofty phrase. Much “policy formation” consists in managing two basic requests. They are, 1) “give me, I want” and 2) “Mine, you can’t have.” The organizing principles are as ancient as the Egyptians, access and rewards to those who support you, the cold shoulder and punishment to those who oppose you. One has access and is a factor or one is irrelevant and redundant in the day-to-day business of “policy” making.
What somewhat changes when the electorate changes the party in office is the broad bent of the policy, the faces of those making the decision, and, to a lesser extent, the interests with access. But face it, Warren Buffet sees who Warren Buffet wants to see. The same used to be true of Rupert Murdoch.
It may seem cynical, but actually it isn't more than the age old wisdom that birds of a feather flock together. For the Conservatives, as pointed out by the Guardian, over half Conservative Party funding comes from financiers in The City.
But whether Conservative or Labour, the public is increasingly electing a concentration of professional politicos trained at the same universities in the same leadership prep courses, backed by mostly the same kind of special interests. So, no surprise really, when the parties turn out to be a choice between Shredded Wheat, Wheaties and Frosted Flakes, distinguishable only by the degree of added sugar.
Perhaps were the public to take these insights "on board," the public would begin to understand “tune in, turn on, and drop out” is not an option. One is either a factor or one is made redundant.
There are ways for the common guy to be a factor. Strikes are not among them. Strikes, violence, and civil disobedience may frighten the beast, but they do not channel the beast.
Whoever is in power or opposition, they will take notice of the interests of their friends. Their friends will take notice of an electorate using the power of their pocketbooks collectively. Consider the impact should the 2-3 million public workers now planning to go on strike in November instead organize themselves (and at least two friends each) to move their bank accounts. from the high street to a cooperative, their retail shopping from big companies to independents, walk or take public transport instead of driving their vehicles for at least a month, drop Sky for at least a month, forgo beer for at least a month, and deposit the savings into a fund to back candidates who do not come from the professional political class. Do the math. 4-6 million accounts moved, no beer, petrol, or Sky expenses for a month, a fund of all the money saved by those 4-6 million people over the month. That adds up.
Such actions would convert the electorate's status from herd to shepherd.