Sunday, 26 June 2016

The Many Messages of Brexit (Part II)

In my last post, we reviewed the breakdown in relations between the so called "talented tenth" of the population and the rest when it came to Brexit. This post will deal with the broader political fallout of winners, losers and future trends. So here are the key stand-out points.

1. As regards the Millennial vote, the kids are not alright. Almost as yawning as the social gap in voting was the age gap, with older voters enthusiastically leading the charge out of the EU and younger ones going the other way. The causes of this are interesting but probably the appropriate subject matter of a different analysis. For what it's worth, I believe that a dramatic decline in the quality of education and an increasing tendency of civics and social science courses to teach what amounts to little more than thinly veiled politically correct propaganda are the main culprits. However, arguably, even those phenomena are at the tip of a deeper and larger political iceberg.

Having been born in 1982, I find myself in an interesting position. To wit, I am just about young enough to be a millennial but just about old (and, let's face it, ornery) enough to have picked up few if any of the political views of my age cohort. Having, as I have, spent most of my life in the company of millennials but not developed millennial politics, I have noted the fundamental fault line in millennial thinking to consist of the belief in two mutually contradictory propositions. The first is that the world (or at least the western world) was a nasty, intolerant, racist, sexist, bigoted, homophobic, transphobic den of hatred and ignorance until some time around the middle of last week. The second is that, notwithstanding the foregoing, everyone under about the age of 65 (other than the certifiably mentally ill) believes in every aspect of what today constitutes conventional wisdom, whether this relates to same sex marriage, transgender bathroom rights, unlimited mass third world immigration or in the notion that national sovereignty is a form of oblique bigotry.

Being mutually contradictory, both of these propositions can't be simultaneously true. If the world's emergence from crypto-Nazism is so recent, then there should logically be a huge and powerful cohort of the population that still believes in it. However, while they can't both be true, they can both be false - and indeed they are. Unlike a person born in 1998 who was voting for the first time on Thursday, I remember the world of fifteen to twenty years ago - I was there after all. From what I remember (and I doubt that my memory is terribly unreliable given my age), society was pretty darned open, pretty darned liberal and pretty darned tolerant. However, being able to remember the recent past also gives one the ability to understand that many of the shibboleths of contemporary political correctness are of an extremely recent vintage. 

Back in 2000, for example, when a safe space was something one found in a children's playground and not a university and when a trigger warning would have been assumed to have something to do win guns, the impeccably progressive New York Times editorialised against a guest worker programme for Mexican agricultural labourers on the basis that it would harm the economic interests of the native born. In 1993, Jim Carrey starred in a movie called Ace Ventura: Pet Detective, in which the main villain was a male footballer turned transsexual (yes, we were still allowed to call them that in those days) with a penchant for trying to seduce straight men. In 1997, the political editor of the Guardian, Michael White, remarked on how close the working relationship between Tony Blair and Paddy Ashdown was and suggested that they were candidates for a gay marriage (still an acceptable topic of satire). In 2007, Hillary Clinton opposed giving driver's licences to illegal aliens (and yes, that term was still acceptable too) and when he ran for the presidency in 2008, Barack Obama told anyone who'd listen that marriage was a hetrosexual institution. 

Put simply, the world's headlong dash into Marcusian political correctness, whilst it may have had its roots further back in history, is basically a phenomenon of the last decade. The more a person's age exceeds that of twenty five, the more aware that person is likely to be that (a) conventional wisdom was very different to what it now is in the very recent past; and (b) the very recent past was, by and large, quite a liberal time. By contrast, the closer one is to the age of eighteen, the shorter one's memory and the more susceptible one is to mythology. Put simply, older voters know that the real change in ethics and morality of the last decade has taken place at an elite level and has been largely imposed on a bewildered population. Younger voters, like the Hitler Jugend and KOMSOMOL members of bygone years, have learned institutional political correctness as a formative experience and thus assume it to be an ordinary and essentially organic morality. In the Brexit referendum, those with long memories voted Leave. Those with short ones voted Remain.  

2. Leftism has become a Bourgeois insurrection against the Proletariat. After Ed Miliband's resignation as Labour leader last year, a surge of young leftists into the Labour Party brought about the political earthquake of Jeremy Corbyn as party leader. As a member of what used to be known as the "Bennite" left of the British Labour Party, Corbyn used to be regarded as (and in his heart, probably still is) anti-EU. However, as a sixty seven year old warhorse of 1970s/1980s vintage, Corbyn now finds himself out of touch with a younger generation of Marxists whose politics are more emotional and visceral than his. As someone whose attraction to ideas and institutions is more or less intellectual, Corbyn is naturally attracted to some forms of political correctness (like multiculturalism and mass third world immigration) but not so much to others (like the European Union).

However, for the aforementioned millennials whose votes were crucial in bringing him to power, politics represents two things. The first is an emotional experience; the thrill of feeling superior to whole swathes of one's fellow citizens; the thrilling bloodlust of hunting down Twitter users who use off-colour language; the ability to signal one's virtue to the world beyond. Never mind that the EU is a crony capitalist exercise in lobbyist-led pork hustling, whose staff earn huge salaries, pay special low tax rates and enjoy a revolving door into the very industries that they regulate. Never mind that EU rules against protectionism, state aids or domestic preferencing in public procurement tie the hands of a putative left wing government and its ability to deconstruct "neoliberalism". And never mind the democratic deficit that led the late Tony Benn to describe the European Commission as the most undemocratic institution west of Moscow. None of these things fit into a modern left wing narrative which puts any kind of nationalism or nativism at the top of a hierarchy of cardinal sins. While Corbyn probably felt bewildered by the whole thing (he is, after all, Tony Benn without the brains), to the young supporters who propelled him to the top, opposition to the EU meant nationalism and nationalism is always and everywhere absolutely unacceptable in any way, shape or form. Hence, Corbyn was left sounding like an unenthusiastic social democrat, repeating talking points about the EU's contribution toward "workers' rights" and the environment.

However, politics, to today's socialist youth, means something more. Even as the left has become more culturally and operationally Marxist, it has become socially less so. Leftism increasingly acts as a political vehicle to express the frustrations of young, middle class students and professionals with a society that won't conform to their image of virtue. The common folk, in their view, don't care enough about the environment. They harbour cruel and nasty attitudes to their underclass, benefit reliant neighbours. They are nativist bigots who won't accept unlimited immigration and are too ignorant to do as they're told and rebel against capitalism instead of multiculturalism. They care too much about holidays in Ayia Napa and not enough about global warming (sorry, "climate change"). They sullenly and cussedly resent the desire of people like Jamie Oliver to decide what they should eat and they show no enthusiasm for the wonderful social engineering that their betters believe (nay know) to be for their own good. 

Institutional leftism from the Guardian, the London Independent, the BBC, RTE and the Irish Times to the TUC and Oxfam, went as far as its legal mandates allowed it to push for a Remain vote. Moreover, the language used by the left to describe leave voters was intentionally condescending and insulting. Had it been applied to members of a non-white minority, it would doubtless have been denounced as "racist". Watching the likes of Polly Toynbee and Zoe Williams in the Guardian was a mystifying experience. Instead of trying to appeal to their opponents, they went out of their way to disparage them. The old adage about honey and vinegar came to mind. However, as the campaign wore on, it became clear that a different choice had been made - one rather similar to the one made by the Pro-SSM campaign in Ireland last year.

Put simply, in both cases, the establishment side made a deliberate decision that it would prefer to win ugly than to win big, sensing, as it clearly did, intrinsic value in winning by a smaller margin but succeeding simultaneously in delegitimising and smearing their opponents in the process. Winning ugly and employing a scorched earth strategy has the advantage of demoralising your opponents and driving them underground in the event of victory. However, it also raises the risk of defeat. Last year, the Yes Equality campaign made the correct calculation that there was a large enough reservoir of goodwill for gays that running a nasty and intemperate campaign would work. Instead of running a courteous campaign and trying to rack up an overwhelming majority of, say 75 or 80%, they decided to portray their opponents as Emmanuel Goldstein and run their campaign as a grossly elongated Two Minutes' Hate and won only 62%. The Remain side seemed as if it had studied and mimicked Yes Equality. The difference was that they grossly underestimated the depth of ill will for the establishment and for the EU and the strategy backfired.

Labour's cosmopolitan London voters and their predominantly ethnic minority and public sector voters in big cities like Manchester and Liverpool got the left's memo. However, in the traditional working class heartlands of North Wales, Tyneside, Yorkshire and Humber and the Black Country, Labour people voted Leave at an even higher rate than the Tory heartlands of the South and East. What all of this means is that if there is a "Labour" party in the UK, it's called UKIP. The party of Keir Hardie has completed its transition to being precisely the opposite sociological force to what it was at its foundation. It may continue in name, but it won't be the same vehicle anymore.

3. The Jo Cox Blood Libel failed. The most nauseating act in this campaign by a country mile was the attempt by the Remain campaign to politicise the tragic murder by a mentally ill individual of Labour MP and Remain campaigner Jo Cox. Some, like the Guardian's Jonathan Freedland explicitly blamed the Leave campaign for creating a supposedly "poisonous" atmosphere. Most found such behaviour too blatant and instead chose to turn the tragedy into mood music designed to implicitly smear the Leave campaign in general and Nigel Farage in particular. 

The overall impression generated by the affair was one of a political class half in love with itself and tiring of an ungrateful public that won't recognise what's being done for it. The real significance of Jo Cox's death is that her friends and family have been bereaved. The squawking of politicians and commentators about politicians' personal safety missed the point that her death would have been no less tragic had she been an Asda cashier from Dewsbury. However, having spent decades pickling themselves in the acrid vinegar of narcissistic self-regard, the political class and its journalistic minions could not help but give the impression that they regarded Jo Cox's life as being more valuable than that of one of the "plebs".

Indeed, the decision of Remain surrogate Andrew Mitchell, a disgraced former Tory Minister best known for having had a row with a Whitehall policeman  which allegedly culminated in him actually calling the man a pleb, to eulogise Cox in a fairly saccharine Op-Ed piece in the Daily Telegraph was mystifying. Mitchell, (a man who once reputedly ordered a senior civil servant in one of his departments to make the tea) could not have been a better choice for anyone seeking to exemplify a political class that despises its own voters and his lack of self-awareness in agreeing to pen the article was breathtaking. 

Worse was to come. At Cox's memorial service, David Cameron and Jeremy Corbyn (both bitter political foes) walked side by side holding floral tributes to their slain comrade. Their unity gave the impression of nothing so much as a political class which regards itself as a separate nation or ethny whose members have more in common with one another than with the "plebs" whose taxes pay their salaries. In the end, it seems that for every voter who was swayed to the Remain side by the Jo Cox smear, another was swayed in the opposite direction by the gastrically unsettling degeneration of politics into a mutual admiration society. Hopefully, the defeat of Remain will slow the momentum which has been developing in the wake of the Cox tragedy to enact demagogic laws against free political expression but only time will tell. 

4. The main political parties may implode. The Labour Party is in the process of committing suicide. In London, where most Labour MPs spend most of their time living, the Labour Party is in rude health, having just won back the mayoralty. Vast populations of minorities and the low waged survive in London due to a combination of means tested benefits and subsidised housing. There used to be a quip amongst Tories that Labour voters only supported the party because they thought that it owned the Labour Exchanges where they got their benefits - it now has more than a ring of truth to it. London has become so expensive that only those well-to-do enough to afford seven figure houses and those poor enough to qualify for social housing support can raise a family there.

Meanwhile, the city is also the seat of government and of many top universities and colleges, meaning that it's full of public servants and associated liberal professionals. These also tilt Labour. The wealthy City of London which finances the whole thing leans Tory. However, the Square Mile only produces enough voters to give the Tories some Marquis seats like Bromley, the Cities of London and Westminster and Chelsea. The rest of the city is firmly leftist, with Labour's vote there rising last year, even as it lost seats everywhere else. Londoners like the status quo and they especially like the version of it that Labour purveys. There are, of course, Londoners who are unhappy at having been priced out. Most of those have decamped to surrounding counties such as Cambridgeshire, Surrey and Kent. Those who remained (an hourglass coalition of the elites and the underclass) are the winners and they like the EU and voted heavily to stay.

Labour's problem is that the post-Blairite project which is toxic everywhere else is popular in the party's power base. Allied to this is the problem that the party's elite ranks seem to hate the rest of the country and regard it much as the American coastal elites regard the despised continental interior. Labour's London-centric worldview has left it oblivious to its parlous state. This is why the right of the party unified behind a Blairite, Chuka Umunna, and the left united behind Jeremy Corbyn, a Marxist, even though both of these men were always going to be repulsively PC and multicultural and a turn-off in places such as Sunderland and Stoke-on-Trent. To Labour's top apparatchiks, not campaigning to stay in the EU would have been utterly anathema. Now they have lost their industrial heartland and could face an electoral Holocaust outside London.

Having found itself on the wrong side of its working class base, the answer that Labour's right seems to have settled on is that if they'd had a leader who was more Euro-enthusiastic, they could have convinced more of the proles to vote to remain. The likely result now is that Labour will elect a new leader from its metropolitan pro-European wing and will be awfully shocked at the next election when a furious backlash against them in the North, the Midlands and Wales is the result. The likelihood is that Labour will be the party of London and, increasingly, nothing, nobody and nowhere else.

The Tories may be about to commit Seppuku themselves. Most of their supporters voted to leave. The main reason for holding the referendum in the first place was to protect the party's right flank from UKIP. However, like Labour, the Tory leadership has its fair share of establishmentarians who will never forgive Boris Johnson and Michael Gove for the perception that they assassinated David Cameron and crippled his Dauphin Prince George Osborne. As the most high profile of the Brexiters and the man whose calculated risk proved decisive in shifting the last couple of percentage points of support in favour of departure, the logical successor to Cameron is Boris Johnson. However, establishment attachment to conventional wisdom is not rational and the Tory Party is not immune to the middle class respectability which has crystallised into an almost unprecedented groupthink. If the Tories are looking to their actual voters, they will go for Boris. If their true loyalty is to donors and the people with whom they hobnob at meetings of the G7 and the World Economic Forum, they will ultimately go with Theresa May.

Neither choice will save them from future horrors. Boris Johnson needed a police escort to leave his London home on Friday morning when a flash mob of angry pro-EU Londoners assembled outside his home to jeer and insult him. If Boris wins the leadership, his triumphant moment will be brief. Too many of the Tory Party's upper middle class supporters share a crypto-socialist obsession with the egalitarian nostrums which suffocate real debate throughout the western world. Johnson is a member of the British elite. However, he is a class traitor, and the elite class's tolerance for class traitors has never been lower. Johnson is now a hate figure and the respectable right will do almost anything to destroy him - and the probability of their trying to do so only increases if Labour rids itself of Corbyn and elects someone like Chuka Umunna. The EU is a pillar of a Metropolitan religion and the elite will seek to destroy any heretic just as it did Mrs. Thatcher in 1990.

On the other hand, if the Tories decide to pick an alternative (most likely May), they run the risk of becoming a rump party of London's millionaire constituencies and a few of the wealthiest Surrey stockbroker belt seats. Should the Tories respond to roughly two thirds of their voters by voting for a leader who disagrees with them on the issue that defenestrated the incumbent, they will have sent a signal that the Tories are, as Peter Hitchens has suggested, nothing more than a front organisation for a group of shadowy billionaires. The Tories thus face an unenviable prospect. Elect Boris and lose a third of their voters or elect Theresa and lose two thirds. The Bullingdon Club wing of the Tory Party cannot appeal to more than a 10-15% of the electorate. However, a more nationalist and populist Tory Party could compensate for its loss of plutocratic support by making inroads into parts of the UK that have turned against the Tories - mainly in the North of England, the Midlands and Wales. To do this, they will need to merge or enter an alliance with the great external enemy, UKIP.

5. UKIP's future is bright. If the Tories pick Boris, UKIP will have to be taken over by the Tories on terms extremely favourable to their underlying worldview. If Theresa May takes over the Tory Party, UKIP will welcome a deluge of the former's refugees. If Westminster goes Benedict Arnold and attempts to undo the referendum result or ignore it, there will be a mass exodus to UKIP. If Jeremy Corbyn stays on, Labour will become a Marxist irrelevancy and UKIP will colonise its working class base in the North, the Midlands and Wales. If Labour chooses Umunna or someone like him, Labour will become a Blairite irrelevancy with the same result.

However, in all likelihood, Nigel Farage's star is on the wane. I believe that Farage is entirely genuine when he says that he would rather be doing something other than politics. If Brexit is successful, I believe he will exit stage left, his work done. I am one of the few people (a group which, I suspect, doesn't even include him) who thinks he'd probably make a good prime minister. However, his image is too polarising and I don't believe the hunger is there, even if it wasn't. More likely, the long term task of leading UKIP will fall to his Deputy, Paul Nuttall, who represents that incredibly rare demographic: a right wing intellectual with a Scouse accent. Nuttall will cement UKIP's position as the party of the Industrial Regions by allying his (quite libertarian) core opinions with a spicy dollop of Poujadist populism to appeal to voters in Labour rotten boroughs like his native Bootle and Salford.

6. The Tories must write London off. Whilst a great place for a holiday or a stag weekend and (from what I've heard) to sow one's wild oats as a twenty-something professional, it's time for the right to accept that London, as it is currently constituted, is really just a hedonistic playpen for the unproductive rich and the subsidy addicted poor. London is no longer the real England but the centre of a debt-fuelled Tower of Babel that lacks any organic characteristics of a viable and sustainable human settlement.

Since taking office, the Tories have pursued policies which are incredibly London-centric, such as quantitative easing, campaigning against Brexit, holding the line against immigration restriction, the living wage law, the restriction of green belt construction, nosebleed levels of public borrowing, rampant debt hypothecation and a Cultural Marxist social agenda. London has responded with contemptuous ingratitude. On a day when the Tories gained seats everywhere else in 2015, they lost seats in London and, this year, London's electorate handed the mayoralty to Labour's Sadiq Khan.

I would conclude this post by saying that the Tories need to leave the perfidious City of London whose support has cost it more than it has brought to the mercies of a Labour Party which it was complicit in empowering. Under the leadership of London's erstwhile mayor, it is time for the party that once billed itself as a "One Nation" movement to start trudging through the latter day Coketowns of Widness, Runcorn, Port Talbot, Sunderland and Oswaldtwistle and seek to rebuild the dream of personal and economic liberty amongst those who have been left behind by contemporary corporatism instead of continuing in the fool's errand of trying to convince those who are feeding off the trough to bite the hand that fills it.

Friday, 24 June 2016

The Many Messages of Brexit (Part I)

The last project for European unity died on VE Day 1945, when Hitler's Reich ended. The previous one concluded at the Battle of Waterloo, when Napoleon's essay in the craft met its Golgotha moment. The latest one, conceived by Jean Monnet and Robert Schuman in 1951 and delivered by Paul Henri Spaak in Rome in 1958 is now in its death throes and it is likely that future generations will remark with the greatest of relief that both its birth (the Treaty of Rome) and the occasion of its death (the Brexit vote of 23 June 2016) were a great deal more quiescent and less bloody than those of their two predecessors. Much as I have always disliked the EU as an imperial project in arrogant transnational social engineering, the mechanism for its advancement has always been infinitely preferable to the bloody prescriptions of the diminutive Corsican and the psychotic Austrian. Meanwhile, unpleasant as the campaign to free the UK from the grip of its icy claws was, the measures that had to be taken to defeat Napoleon and Hitler were far worse. In a nuclear age, in which whole cities can be destroyed in a matter of minutes, battles for political liberty have to be much more civilised than in our blood-soaked past. For this, we should all be grateful.

Finally, after years and indeed decades of eruptions of discontent at the European Union and the shape and proportions that it has assumed since being established as a Customs Union in 1958, a European population has done what many have darkly hinted at doing over these years. In 1975, the UK threatened to become the first country to ever leave what was then known as the EEC when the Wilson government called a referendum in order to deal with the divisions in the British Labour Party which have been mirrored in the Tory Party decades later. Back then, the Brexiters lost by a country mile. Since then, there was the occasional tremor that showed that all was not well: the Danish rejection of Maastricht in 1992; Ireland's short-lived rejections of Nice and Lisbon; the French and Dutch rejections of the European Constitution. However, none of these events broke the cardinal rule of the project, namely that the Union was the political equivalent of a roach motel - once a country entered, it could never leave. No more.

Brexit is too big an issue encapsulating too many complicated and multifaceted issues to attempt provide a comprehensive analysis in a single blogpost. What I instead propose to do is to analyse some of the key political implications and take-outs from the result and how they fit in with the broader picture of public policy in the months and years to come. In this post, I deal with the first three.

1. The divide between the elites and the voters over whom they rule is of pre-revolutionary proportions. The most notable division that Brexit has revealed is the fissure between what can generally be termed elite opinion and that of the population at large. However, this terminology understates the gravity of the situation. Sitting atop the social hierarchy is what can be loosely described as the "talented tenth" - the top 10% of the population consisting of the highest echelons of politics, the civil service, finance, business, trades unions, academia and professions together with the people who provide key elements of consultancy, research, news, information and technical support to them. Ordinarily, when elite opinion diverges from that of the public, there is a large portion of this talented tenth which operates just below the elite and which is only too happy to channel public feelings of discontent with the higher ups. This is, in essence, how old elites are internally ousted and new ones replace them.

As a man who spends a fair amount of time amongst talented tenth types, what has amazed me has been the monolithic degree of support that exists amongst educated people for elite establishment opinion and the degree of visceral contempt in which this cohort views any dissent from establishment nostrums. In simple terms, reading the social media feeds of people with postgraduate level education paints the picture of a tendency within the population which literally regards anyone who questions any aspect of the EU project as a fool or a knave. The attacks on the likes of Nigel Farage are somewhat understandable. He was, after all, a person with a long term record as a thorn in the establishment's side (which I see as being much to his credit, but then again, I would). However, the campaign of vilification that has faced both Boris Johnson and Michael Gove has been almost beyond comprehension, with many expressing a personal and emotional disgust at their advocacy of departure from the Union. Unlike Farage and his deputy Paul Nuttall, Johnson and Gove are regarded as members of the elite and their campaigning against an organisation of such religious significance has been considered a form of treason.

Away from the Metropolis, the state of national opinion (and this is mirrored across the western world) is rather different. While Remain supporters derided Gove's questioning of the cult of the "expert", at the level of the ordinary voter (on the left and right of the political spectrum), there was a sense that the so called "experts" were more interested in serving their own personal or professional interests than in speaking truths. In a post-2008 world, people no longer believe that the well-educated have their best interests at heart. This is what is fuelling the rise of politicians like Bernie Sanders and Jeremy Corbyn on the left and Donald Trump and Nigel Farage on the right and when those who are disaffected by the increasingly wide gap between promise and performance are derided as morons or (as one commentator saw fit to call them) sewer rats, one should not be surprised if they are not persuaded by the clarity of one's wisdom. 

2. The Remain side was not nearly as smart as it made itself out to be, while the Brexiters were far posher than the image they liked to portray. The picture that the Remain side sought to burnish was that of a sober suited band of thought leaders in the Platonic mold of philosopher kings with their opponents contrasted as saloon bar ignoramuses who were proud of their own lack of expertise and revelled in their lack of knowledge of public policy. Hindsight will no doubt show this strategy as being far stupider than it actually was - it came within four points of succeeding, which shows that it might have worked. The plan was to intellectually intimidate large portions of the population by using abstruse and often nonsensical arguments to stoke fear.

The Brexiters were never going to be able to defeat such a strategy head-on, so they wisely countered their opponents by deftly and skillfully using their characterisation of them to paint a picture of the pro-EU establishment as out-of-touch and contemptuous of ordinary people. The strategy worked very well. Despite having almost every major organ of the British establishment pushing against them and running a non-stop smear campaign designed to portray them as hateful and stupid, they were able to prevail. 

Of course, the image and the reality did not match. The Brexit side used questionable figures and were not entirely intellectually honest in their presentation of the EU budget - the fact is that the UK's contribution to the EU budget is a very modest burden indeed relative to the more complex costs associated with regulatory harmonisation and other EU law measures which entail substantial bureaucratic accretions. However, like the slick politicians that they fundamentally were, the Brexiters recognised that the decontextualised incantation of big sounding numbers (Three hundred and fifty million a week people!!!) created more emotional impact than complex arguments about creeping technocracy. Far from their image as principled outsiders, these were people well able to work the dark arts to their own advantage.

By contrast, the Remain case was much frothier than its pious supporters liked to portray. The dire warnings about access to the single market ignored the fact that the UK has a gargantuan trade deficit, that the EU's intrusive regulatory system affects domestic and third country trade that has nothing to do with the EU single market and the fact that since the British joined the EU and were forced to sign onto its plethora of environmental, labour and other regulatory ordinances, British manufacturing had declined to less than an tenth of the economy. There was constant harping on about Europe having "brought prosperity" to Britain despite the fact that British growth since 1973 has been patchier and more erratic than in the pre-EU period of 1945-73. Clearly, the EU is not the only reason for Britain's industrial decline. However, there is no evidence that membership confers upon any country the secret sauce of growth. To the contrary, the EU economy has for more than two decades, been the most sclerotic on earth.

With the Remain side focusing on condescension and the Brexit side on tearing lumps out of the elite or "experts", if you will, the reality somewhat belied the image. The Brexit side contained some fairly heavyweight individuals. Brexit had the support of Norman Lamont, a director of Rothschild's investment management turned Chancellor of the Exchequer and another former Chancellor (and editor of the Spectator to boot), Nigel Lawson. Lawson and Lamont are both City heavyweights who have served on numerous corporate boards. Another prominent Brexiter was one of the architects of Margaret Thatcher's successful anti-inflation drive of the early 1980s, Professor Sir Patrick Minford. In the world of manufacturing, Lord Bamford, the manufacturer of the famous JCB bulldozers backed departure from the EU, as did perhaps the greatest British inventor of his generation, Sir James Dyson of Dyson vacuum cleaners fame. Meanwhile, some of Britain's foremost writers, such as Charles Moore and Simon Heffer were also enthusiastic "Leave" backers, and who could forget another former Spectator editor (as well a holder of Oxford's prestigious Brackenbury scholarship), one Boris Johnson.

Meanwhile, for all their condescension, the Remain campaign included such economic illiterates as Labour's Jeremy Corbyn, the Lib Dems' Tim Farron and the TUC's Frances O'Grady, not to mention some fairly unimpressive empty suits such as Sir John Major. As usual, the lie had travelled halfway around the world before the truth had gotten its boots on and while the Remain side was the first the disseminate it, they did so with the Leave side's tacit consent.  

3. Members of the talented tenth seem to be essentially incapable of thinking rationally about immigration. Like it or not, the state owns vast swathes of public infrastructure without which it is impossible to access private land. The world, as we know, is divided into countries. Those countries divide the world into two classes of individuals. The first class consists of citizens - i.e. people who have the right to live in the country. The second consists of non-citizens - i.e. people who don't but can be accorded the privilege of so doing. As landowners who control access to their territories, governments' right to accord the privilege of living in a country has the potential to be extremely profitable or to occasion immense loss. It is thus basic common sense that just like a private landlord or concessionaire, the government should not sell the right to live on its territory cheaply. This means that nobody who is not a citizen (or subject in the case of the UK) can assert a "right" to enter a country any more than they can assert a right to enter someone else's living room.

However, according to educated opinion in the modern age, denying access to one's country, labour market and social welfare system (seemingly to anyone) violates freedom of movement, interferes with the free flow of labour and is racist/xenophobic/bigoted. One might just as well make the same argument about locking the front door of one's house. Europe's system of unrestricted movement of workers was an affordable luxury in the days when the EU's constituent nations were largely of equivalent levels of prosperity. However, the dynamic was irreversibly changed by eastward expansion into poorer countries of the former East Bloc. The talented tenth has become enthralled by the notion that any questions about social and structural costs associated with these mass flows of migration, any discussion of indigenous worker displacement, and any analysis of potential burdens to infrastructure and the welfare state represent the mythological operation of some ignorant prejudice.

What made this issue all the more acute was Angela Merkel's flabbergastingly idiotic decision to (in violation of the Dublin Regulation on asylum applications) invite an essentially unlimited number of Middle Eastern migrants to enter the EU. Obviously, with Europe's open borders, the decision of one country to invite a demographic deluge upon itself has implications for all countries within the free travel area. All of a sudden, Metropolitan obduracy and the refusal to discuss immigration in anything other than positive terms combined with the poisonous tactic of racism smearing - something which continued even as events such as those which occurred in Cologne on New Year's Eve raised unpleasant questions about the cultural compatibility of many new migrants with western societies.

The Brexit debate once again demonstrated the ability of establishment narrators to engage in shrill denunciations of anyone who raises immigration as a serious public policy issue. Yes, they will concede that there are "legitimate" concerns about immigration. However, strangely enough, any argument actually advanced in relation to immigration is denounced as bigoted or "scare mongering" - rather like a child assuring his mother that he doesn't object to eating vegetables per se, but always raises an objection to the specific vegetables that are actually in front of him. Metropolitan opinion can conceive of a legitimate argument about immigration. It's just never seen one. 

One way or the other, immigration has (particularly amongst working class voters) become a symbol of the elite's complete contempt for their interests and concerns and the Brexit margin was sufficiently narrow that we can safely say that, to employ the Sun's 1992 phraseology: "It was the immigration wot won it!"

My next two posts will deal with (a) what Brexit tells us about the future of economic policy; and (b) where British politics will go in a post-Brexit world and what the consequences will be outside the UK.

Monday, 13 June 2016

Omar Mateen: Diversity's Grim New Posterboy

Tragic and outrageous events whose bestiality defies rational comprehension have a natural and understandable side effect of dulling people's rational and critical faculties. Yesterday's horrific massacre of patrons of a gay nightclub in Orlando is just such an event. I am tempted to launch into my usual admonition that hysterical anti-civil liberty responses to events such as this are never justifiable. However, there is another phenomenon which is perhaps more critical than the hysteria at play here. That phenomenon is the feeling of moral ambivalence that routinely follows politically inconvenient events. Shortly after John F. Kennedy's assassination, his widow Jackie was informed that his killer, Lee Harvey Oswald, was a Marxist loner of dubious mental health. Her instant reaction was apparently one of disappointment. There might, she said, have been some meaning or dignity to the event had her husband been killed by a right wing or reactionary group, but there could be no compelling narrative arising from this event - of course, she hadn't reckoned on Oliver Stone's imagination but then, who could? Jackie wasn't alone. The Chief Justice, Earl Warren blamed the actions of Oswald (who had once defected to the Soviet Union and had tried to defect to Cuba) on a climate of right wing hate in Dallas. Warren's ghost haunts the halls of officialdom.

Allow me to state the obvious but distasteful: Polite establishment opinion would have been much more comfortable had yesterday's murderer been a white Christian Redneck from the Deep South or the Florida Panhandle. The fact that he was a son of Muslim Afghan immigrants is deeply inconvenient to the establishment narrative and simply will not allow for the simplistic and monochromatic moral preening that usually accompanies these events. For most of the last year, respectable western opinion has been four square behind the admission of essentially unlimited numbers of Muslim migrants into North Western Europe, even as it has domestically championed a social agenda around gender, homosexuality and transexuality which flies in the face of everything that these millions of newcomers demonstrably believe. An increasingly puritanical egalitarianism in relation to sexual matters has always sat exceedingly uncomfortably with progressive opinion's penchant for "moar immigration" at all costs. 

After last year's marriage referendum, I published a post in which I noted that Imam Ali Selim of the Islamic Cultural Centre had argued vociferously for a No vote and that the LGBT movement should regard that fact as a caution against both mass third world immigration on the one hand and the movement's own growing tendency towards majoritarianism on the other. Unsurprisingly, Yes campaigners were less than enthused at my lack of empathy with their euphoria. One professed not to know where I was "coming from" and another told me that my "privilege" was "showing". I wonder whether either would care to revisit their glib conclusions today.

Let us be clear here. Orlando was an extreme and unrepresentative event. When unhinged people choose to act in unhinged ways, there is, in truth, far less that security services can do than people would like to believe. Will an event like this happen again? Almost certainly yes. Will events like this become daily or weekly affairs? Almost certainly no. However, that misses the point. Events of this extremity are indicative of less extreme but more widespread attitudes and behaviour which have the potential to disrupt western life a great deal more. As a man who grew up during the IRA's long campaign (I was born a few months after Bobby Sands' death and was 16 when the Good Friday Agreement was signed), I have adopted a rule of thumb which I call the "Rule of 10". To wit, for every one person who is prepared to engage in or knowingly assist in the commission of a barbarous act, there are ten people who will (privately or otherwise) nod their heads approvingly. For every one of those, there's another ten who will passively go along with such acts and would do nothing within their power to stop them. For every one of those, there are ten who will disapprove of the action but will regard any expressions of disapproval as distasteful or impolite. Anyone who doubts my rule should look at the number of people who display Bobby Sands iconography or remember the number of respectable people who rose to condemn Michael McDowell when he made the fairly anodyne observation that the man was a terrorist. Perhaps you were one of them? Now imagine if for every Omar Mateen, there were a thousand people who regarded it as impolite or improper to denounce him, or worse. That, not the madman himself, is what should cause you disquiet.

Looking behind the surface of Mr. Mateen's barbarity, it should be noted that in a recent ICM survey of 100,000 British Muslims, 52% professed to believe that homosexual acts should be illegal and 23% favoured the replacement of British civil law with Sharia Law. Would all or even most of these people contemplate Mateen's actions? Hardly. However, with such attitudes being prevalent, how conceivable is it that an Islamising population would become a place in which it would be unsafe to open or patronise gay bars or that western women would have to dress in a particular way or avoid travelling alone in order to avoid unwanted attention? Could the phenomenon of mass sexual assault experienced on New Year's Eve in Cologne become a regular occurrence? And how would officialdom react? The gay journalist Milo Yiannopoulos, writing in Breitbart UK today, was in no doubt: "The left chose Islam over gays. Now 100 people are dead or maimed in Orlando." The statement strikes me as being a tad histrionic. There's a kernel of truth to it nonetheless. Under the pernicious doctrine of "disparate impact", any attitude or institution that impacts the beliefs of one ethnicity over another is labelled "racist". Where social egalitarianism (including feminism and LGBT) is deemed a "white people" thing, how long before those who hunt for sexism and homophobia are themselves deemed racially bigoted?

Deep down, I believe that the respectable progressives are aware of this but don't really know what to do. All of the major media outlets online gave instant prominence to the statement by Mateen's father (a talk show host who openly supports the Taliban) that the attack had "nothing to do with religion" while many didn't mention the ISIL connection for some hours. Barack Obama, who has expressed trenchant views in relation to mass killings seemed weak and embarrassed in his denunciation of the attack - his statement made no reference to Islam and he barely acknowledged the anti-homosexual motivations of the attacker (though I suppose it's refreshing to see him react less demagogically than he usually does after events like these). The far left Guardian writer Owen Jones took a different tack. In an interview with Sky News host Mark Longhurst and Telegraph columnist Julia Hartley Brewer, Jones had a tantrum at Longhurst and Hartley Brewer characterising the attack as terrorist rather than homophobic (as if the two were mutually exclusive) and walked off the set. It wasn't hard to see that Jones was motivated by discomfort rather than true outrage. And discomfited he might be. It is impossible to give the homophobia issue the level of prominence it might ordinarily get without behaving in a manner which would be labelled as "Islamophobic". 

Of course, there has been a traditional and very civilised solution to the problem of people like Omar Mateen or his less extreme father, which has worked for centuries and indeed millennia - borders. With borders, we can have countries in which people like Owen Jones can feel safe and other countries in which people like Mateen (Senior and Junior) can be shielded from offence. And yes, that means that we have to accept some brutal truths. If you want a west that is safe for feminism and LGBT in all parts of the public space, the demographics of your society must safely mirror those of the populations which have generated those cultural movements. And yes, that means that there's not a whole lot that we can do for those people in less progressive parts of the world other than invade their countries - and that solution doesn't seem to work very well. On the other hand, if ethnic diversity uber alles is the order of the day, then prepare to welcome a whole new body of social mores. Take your pick folks, because having it both ways isn't an option.    

Wednesday, 8 June 2016

Ireland's Economy: Thin Air on High Ground

"Yesterday, upon the stair,
I met a man who wasn't there.
He wasn't there again today,
I wish, I wish he'd go away..."

From Antigonish, by William Hughes Mearns

The February 2016 election has had few good effects, having left us with a resurgent far left and a weak minority government propped up by incoherent independents and an irresponsible Fianna Fail. However, it has had one welcome byproduct, namely the pouring of some cold water on the increasingly complacent and self-congratulatory narrative of Celtic comeback which has pervaded Irish commentary since late 2013. Having spent the election cycle boasting of having mastered economic forces over which it had no real control and warning of apocalyptic consequences should the public fail to return it to office, a dramatically weakened Fine Gael, shorn of its enormous majority and having been rebuffed by an ungrateful/incredulous electorate, will perhaps find it more profitable to be cautious - its post-bailout exit exuberance having failed to warm the public's cockles. Moreover, with the country now governed by an administration which exists at the grace and favour of the opposition, perhaps we will have to stop basking in the recovery narrative and take a good hard look at the headwinds in our midst.

As in all dangerous situations, it helps to look at all the perceived dangers: both the phantom perils and the real ones.

The latter first. Beyond all the specific headlines lies a sobering time sequence. It is now eight years since the US economy led the world into the Great Recession in 2008/9. That was eight years after the bursting of the IT bubble, which prompted a brief US-led global slump in 2000/1. That crash was preceded by a business expansion which started at the trough of the 1992/3 recession eight years previously. Stated differently, we are roughly eight years out of our last slump, which happened roughly eight years after the previous one, which itself occurred eight years after the one before that. Anyone who is not disquieted by this ought to be. While the two most recent business expansions lasted eight years, there is nothing in holy writ to say that this one can't last longer - indeed it might. However, history isn't on our side. Since 1945, the US economy has averaged a recession roughly once every 4.3 years. In other words, the two most recent business cycles have been anomalous in their length, as has the current one. Even if one accepts that eight year business expansions are the "new normal", we will have to be bucking history to the upside to avoid another US-led global slump in the next two years. In this regard, the US Bureau of Labor Statistics jobs report for May, which recorded the lowest job creation in America in six years, can't be a good sign.

Now the phantoms. Right now, the world and European financial markets are convulsed over two imminent perils. One is Brexit - the risk that the UK electorate may vote to leave the EU in this month's referendum. The other is President Trump - the risk that he of the bouffant hair and orange tan could be the occupant of the Oval Office. Why do I call these events phantoms? Not because I rule them out; either or both could happen (which is not a prediction that they will). Rather, I say that the perceived dangers posed by the occurrence of either are more a reflection of politically correct groupthink than of any kind of real and considered analysis of the facts.

First Brexit. As has proven a familiar pattern in campaigns organised by Metropolitan culture's higher-ups, there is a distinct lack of any positive rationale for the EU on the part of the "Remain" side. It seems untroubled by the need to actually explain the brightness of its own idea and seems to believe that it is sufficient to simply demonise its opponents, the Brexiteers. Supporters of Brexit, the argument goes, are appealing to irrational fear and hatred. Strangely enough though, the principal arguments advanced by the "Remainers" (or should I be naughty and call them the Remainders) are (a) that leaving the EU would cause an economic and perhaps geopolitical catastrophe, which would suck the UK into a vortex from which she might never emerge; and (b) that supporting the EU is a basic precondition to not being a loutish, Barbarian oaf. The Remain campaign has principally consisted of a combination of hysterical prophecy and the thinly veiled projection of Metropolitan class hatred for working class and "Middle England" voters. The latter may or may not backfire. The former requires closer examination.

The only elements of Brexit risk that even hint at the potential for big and dangerous change are the threat of Britain losing the benefits of free trade and its much vaunted financial services sector's access to the single market. The former is a red herring. It is theoretically possible that the remaining Member States will cut the British off from their free trade area as an act of revenge. It's also not remotely probable, as the UK runs a massive annual trade deficit with the EU (and indeed the rest of the world) and the crony capitalist nature of the EU alone will ensure that Europe's (especially Germany's) export multinationals and their convoy of unions will lobby hard to stop Brussels from destroying the British market for Mercedes cars and WMF cookware. Meanwhile, the other threat is that the UK will have to obey EU laws anyway without having a say in making them. This argument is also a red herring. The EU could theoretically deny the British access to its markets in return for the implementation of its labour, environmental and consumer regulation. However, with the aforementioned balance of trade so heavily favouring the UK, such a move would be a non-runner. Of course, many laws such as those in relation to product specification and conformity standards will have to be obeyed, but only in respect of those goods that the UK exports to the EU. Currently, the UK has to obey EU laws, even in relation to domestic and third country trade which has nothing to do with the EU. Set against that, the loss of an approximately 10% say in the content of EU law seems a small enough price to pay.

In relation to finance, the claims are even more threadbare. The per capita revenues from finance of Switzerland, Jersey, Guernsey and the Isle of Mann all exceed the mainland UK's despite being outside the EU. As a finance lawyer, I can also tell you that it is actually easier and not harder to provide many financial service exports to EU countries from outside the EU than within it (especially in the most profitable MiFID regulated spaces). Virtually all disadvantages to providing financial services from the UK could be eliminated by simply establishing EU based subsidiaries and opening branches of them in London (as many Swiss and American entities do). Beyond that, the main contribution of the EU single market to British finance has been to impose a heavier regulatory burden on small and medium financial services providers (of which the UK used to have many), which has contributed to the increasing dominance of the sector by giant universal banking conglomerates - a bias which probably explains why most of the finance sector's big incumbent players oppose Brexit.

In short, Brexit has all the makings of a "so what" moment, its principal intrinsic effect being that the high tax/high regulation cartel that is the EU will be slightly weaker. Such a result will be neither catastrophic nor earth shakingly positive in nature. What will mainly have happened is that an electorate will have signalled its disloyalty to the Metropolitan tribe that rules it - my heart bleeds!!!

On the surface, Trump is rather more of a worry, but again, beneath the surface, we're talking about another "so what" moment. His more regrettable rhetorical misadventures aside (most notably in relation to Mexicans and Muslims), nobody has been able to paint a realistic picture of how a President Donald could translate these excesses into correspondingly unwise policies (especially given how hostile a reception he is likely to get from Congress and the Supreme Court) or, for that matter, whether he even intends to. All the talk of his authoritarianism and lack of constitutional probity is probably also overblown. The current US President's use of executive power to override Congress, of judicial interpretation to correct fissures in his own pet laws and shocking use of entities such as the EPA and the NLRB to make law have already eviscerated most of whatever was left of the US's constitutional architecture and the only obvious difference between a President Trump and any alternative is that the braggadocio and political incorrectness that accompany any of his attempts to vandalise constitutional standards might actually raise influential resistance - hardly a matter to cause regret.

The most the Donald's rhetoric on immigration could conceivably translate into would be the adoption of an Australian or Canadian style points system while the most that his protectionist rhetoric over trade can possibly achieve is some action against Chinese currency manipulation. Neither result would be in any way regrettable. Meanwhile, the only aspect of policy in respect of which the US Constitution accords the President significant autonomous power relates to foreign policy. Beyond the incoherent bluster that emanates from him about America not "winning" or making good "deals", the only discernable substantive difference between Trump and any of his viable opponents is that he lacks the almost evangelical enthusiasm of the current incumbent and his predecessor for deposing secular Middle Eastern governments and creating vacuums for the emergence of Al Qaeda and Daesh style theocrats. I think that the populations of Paris and Brussels would be much happier today if the current administration had shown more of the Orange one's healthy scepticism.

Once again, as with the Brexit hysteria, the real object of Trump derangement is middle class virtue signalling. If Trump wins the presidency, life will go on, just as if the UK leaves the EU, the island of Great Britain will not sink into the Atlantic and drag Ireland down with it, unless... And therein lies the problem. Public policy has become unmoored from rational foundations and so have the financial markets, which increasingly drive public policy. When the conventional wisdom is rooted in fantasy, the perception of an event may set in train consequences which have nothing to do with the intrinsic qualities of the event. In other words, notwithstanding that these events would represent good opportunities to shrug one's shoulders nonchalantly, the apocalyptic perceptions of financial markets and policy makers may nonetheless set off a panic which contrives to turn either a Brexit moment, a Trump moment or both into the catalyst for a real crisis. Unfortunately, there are good reasons to perceive this to be so.

The structural problems afflicting the world economy in 2008 are all still there and have, in fact, worsened. In particular, the reckless monetary policies which inflated the 2000s credit bubble have worsened by many orders of magnitude as a result of the 2008 meltdown. In addition, the concentration of systemic risk in the financial system has only become greater since then and regulatory changes made in response to the crash have only amplified the problem of risk concentration by encouraging ever more reckless institutional consolidation. Meanwhile, a combination of massive deficit spending and the socialisation of financial institution debt have combined with the ever tightening demographic noose to leave governments across the world in an almost immeasurably worse fiscal position than eight years ago. Meanwhile, to make matters worse, the euro, which did so much to amplify the effects of the Great Recession has been neither dismantled nor shoehorned into the shotgun pooling of fiscal sovereignty that its continued viability requires. Yet despite all of this, the financial markets are continuing to price every rent, dividend, royalty, interest rate and profit participation in the world off the yield on the sovereign debt of governments which are already de facto insolvent. This is not the behaviour of a rational financial market or a rational political system.

In an environment in which the financial system's entire perception of itself rests upon a self-serving myth, it should not be surprising if the capital markets are susceptible to traumatic hair-trigger events which are of no significance in and of themselves but which may serve to bust the illusion of stability. So, while Donald Trump may pose no real danger in and of himself, even the prospect of his election may bring unwanted attention on the US government's eye-wateringly appalling fiscal fundamentals and while Brexit may be of little intrinsic import, it may have the effect of drawing attention to the UK's awful current account deficit - not to mention the fact that it doesn't seem to have a functioning economy north of Watford. Can we thus rule out the notion that perception could become reality? Unequivocally no, I'm sorry to say.

So where does this leave Ireland? Well, we have had eight years in which to effect much needed deleveraging and household debt liquidation. However, our banks still suffer from borrower delinquency rates a multiple of what they were in early 2008. Likewise, our economy is less dependant on property than it was in 2008 but more dependant on an export boom that now seems to be petering out. At the beginning of 2008 meanwhile, our government debt was roughly €43 billion. It now exceeds €200 billion. As for financial risk concentration, in 2008, we had too few institutions holding too much risk with too little opposable upside to justify it. Today, ACC, Anglo Irish, Bank of Scotland, First Active, Irish Nationwide and Danske Bank are gone and EBS has been folded into the AIB group, meaning that AIB, Bank of Ireland, Permanent TSB and Ulster Bank have an unprecedented degree of dominance over our financial system. To put it mildly, this would not be a good time to have another financial crisis.

And what of our political system? Five years of governing under a Troika mandate have reduced Fine Gael into a hollowed out shell running the weakest government in the history of the State. Labour, having failed, in its five years in government, to use a social agenda to compensate for its lack of an economic one, languishes in opposition and has retreated back to economic fantasy. Meanwhile, Fianna Fail may have regained its self-confidence but it has not reclaimed its self-respect. The party of de Valera and Lemass now sees fit to take its cues from the hard left, seeming still to be in a state of penitence, exorcising itself of its Celtic Tiger era guilt by masochistically aping the shallow pseudo policies of its historic critics. Fianna Fail Nua now showboats instead of proposing serious policy, its latest wheeze being to support Labour's economically illiterate "living wage" proposal, which would throw tens of thousands of low skilled workers onto the labour market's scrapheap. This would perhaps be forgivable if they were in full opposition. However, with the government now dependent on their votes, it would seem that just as the country needs a life jacket, the political system is throwing her an anchor. Grim times.