Brexit and the waning days of the United Kingdom

[The Minsky Moment]

Covid is arguably a demand shock because people only leave their houses to buy toilet paper.  They don't go to concerts, or restaurants, or on cruises, or on vacations, or travel at all.  To airlines in particular I'm sure this looks a lot like a demand shock.  Demand for oil seems to have dropped.

Those are sectoral shocks.  All the fiscal stimulus in the world isn't going to get people to book overseas vacations and cruises as long as the virus is out there.  They will either save the money or spend it on Amazon deliveries.

[Admiral Yi]

Those are sectoral shocks.  All the fiscal stimulus in the world isn't going to get people to book overseas vacations and cruises as long as the virus is out there.  They will either save the money or spend it on Amazon deliveries.

Well if they save their money that would be a demand shock, wouldn't it?

But I do actually agree that fiscal stimulus has limited usefulness when people don't have ways of spending money.

Similar doubts about the usefulness of monetary stimulus.

[The Minsky Moment]

The monetary stimulus is probably there to mollify the financial markets, the efficacy for the real economy is questionable.

[Sheilbh]

Apparently fairly likely this will be delayed. The government and EU are both still saying they're working hard on this, but on the UK side at least two of the senior civil servants have already been moved to coronavirus emergency planning and lots of other civil service resource being deployed on that.

One possibility is the two sides exchange drafts, acknowledge there are big gaps but, given the crisis, are agreeing an extension for x.

I don't think there's going to be any push to keep talks on this going given how unimportant it is.

[celedhring]

The pessimist in me believes that Johnson will just let the period lapse and default to WTO, because who's going to notice an extra 0.5 GDP loss when our respective economies might be down double digits already (and the drop in trade might be already priced in to a degree).

[Josquius]

I'm willing to lean that way too. But less because economic drops will be masked and more he has shown he is all about short term political gain rather economic stability.

[garbon]

https://www.theguardian.com/world/live/2020/mar/19/coronavirus-update-live-news-who-covid19-cases-outbreak-us-states-uk-school-closures-australia-europe-eu-africa-asia-latest-updates?page=with:block-5e734b288f085c6327bc2e07#block-5e734b288f085c6327bc2e07

The EU's chief Brexit negotiator has tested positive.

Michel Barnier✔
@MichelBarnier
I would like to inform you that I have tested positive for #COVID19. I am doing well and in good spirits. I am following all the necessary instructions, as is my team.

For all those affected already, and for all those currently in isolation, we will get through this together.

[mongers]

https://www.theguardian.com/world/live/2020/mar/19/coronavirus-update-live-news-who-covid19-cases-outbreak-us-states-uk-school-closures-australia-europe-eu-africa-asia-latest-updates?page=with:block-5e734b288f085c6327bc2e07#block-5e734b288f085c6327bc2e07

The EU's chief Brexit negotiator has tested positive.

Michel Barnier✔
@MichelBarnier
I would like to inform you that I have tested positive for #COVID19. I am doing well and in good spirits. I am following all the necessary instructions, as is my team.

For all those affected already, and for all those currently in isolation, we will get through this together.

I hope he's gets through OK, especially as he's such a decent politician, administrator and friend of Britain.

[The Minsky Moment]

There's a demand side shock now . . .

[Sheilbh]

In British politics news - Alex Salmond has been cleared of sexual assault charges:

Alex Salmond's acquittal over sexual assault charges paves the way for an SNP civil war
The former First Minister's rage and clear thirst for revenge will not be deflected.
By
Chris Deerin


Former Scottish National Party leader and former First Minister of Scotland, Alex Salmond leaves the High Court in Edinburgh on March 23, 2020.

What must Scotland make of itself now? Of its government and its governing party? Of its former First Minister? Of its current First Minister? Of what Scottish justice is?

The questions left hanging in the wake of Alex Salmond's acquittal on charges of sexual assault are multitudinous, and will doubtless be answered in unforgiving fashion over the coming months. This is far from over, as Salmond made clear on the steps of the court. Key evidence he had been prevented from airing in court would be made public, he said: "At some point, that information, facts and evidence will see the light of day." His rage and clear thirst for revenge will not be deflected.

Salmond has won on all legal fronts – first in his civil case against the Scottish government over the way it conducted its inquiry into the allegations against him, and now in a criminal court in the most dramatic trial Scotland has witnessed in years. His reputation may have taken a battering in recent weeks, his morals and behaviour exposed as questionable, to say the least, but he has been cleared of sexually assaulting nine women.

Salmond is said to believe there was a political conspiracy against him, which will strike anyone who has been covering Scottish politics and the internal machinations of the SNP for the past few decades as unlikely. It is worth bearing in mind that his accusers were SNP politicians and advisers, and senior civil servants, high-achieving career women, some with significant public reputations, all with much to lose. Mr Salmond is innocent, says the jury. The women have lost. One feels for them, given all they have risked. But where does it all leave us?

Given the profile of the case, there should clearly be an independent public inquiry, as well as the parliamentary probes that have already begun. The same would be true had the verdict gone the other way. Nicola Sturgeon faces uncomfortable questions about private, unminuted meetings with her predecessor after the allegations first emerged. Scotland's top civil servant, Leslie Evans, who oversaw the government inquiry, will be in Salmond's sights. The rabid, largely male, cybernat community, whose social media comments have strained at the legal boundaries in past weeks, will expect bodies. It is essential that the complainants have their anonymity preserved, even in this age of social media savagery. And the country needs this most distasteful and upsetting of periods dealt with transparently and neutrally in order, eventually, to move on.

Salmond's supporters were quick out of the blocks after the verdict was announced. Joanna Cherry, a prominent SNP MP and critic of Sturgeon, tweeted that "there should be an independent inquiry into how the SNP dealt with these allegations", adding archly that she was "sure the... Chief Executive [Sturgeon's husband Peter Murrell] would welcome the opportunity". Kenny MacAskill, another MP and Salmond ally, declared bluntly: "Some resignations now required." Scores will be settled, not all of which are necessarily related solely to this trial.

As Salmond left the court, victoriously bumping elbows with his QC Gordon Jackson, it was said he intends to resume his political career by returning to the Holyrood backbenches at next year's devolved election. The idea of him sitting behind Sturgeon in the chamber is almost unthinkably toxic after all that has passed. Can the First Minister survive this? What should voters make of a governing party that is so publicly and traumatically split?

In the meantime, Sturgeon cannot afford to be distracted from dealing with coronavirus, and neither can the country afford her to be. This crisis requires all her attention, long hours and total focus. But she knows now that there is another enemy on the horizon – her former mentor and friend – and that there will, one way or another, be a significant price to pay.

Chris Deerin is the New Statesman's contributing editor (Scotland).

[Valmy]

I find the idea of Scots fighting amongst themselves mindblowing.

[Iormlund]

MacLeod!

[garbon]

Bye, Corbyn.

[mongers]

Bye, Corbyn.

Shsh, no one was supposed to notice.

Instead lets have a big welcome to Sir Keir, knight of the collective bargaining table. 

[Sheilbh]

Yes. Goodbye Corbyn. I really hope we manage to resist turning him into a twinkly-eyed national treasure (like Tony Benn) and instead remember the damage he did to the Labour Party and country (like Tony Benn).

In fairness I could be wrong, but I suspect there's an above average chance Corbyn goes full David Icke in the next few years.

Not thrilled at Keir, but I think he'll be competent which is a start. Though it is incredibly depressing that, yet again, the Labour Party - the party of equality - has chosen a middle-aged white man as leader; I wouldn't be surprised if the Tories elect a BAME leader before Labour choose a woman

But margin was very good and he also won a clean sweep of anti-Corbynites on the NEC so he'll be able to do what he wants.

Very good article by David Edgerton:
https://www.davidedgerton.org/blog/2020/4/4/as-labour-elects-a-new-leader-some-thoughts-on-labours-misunderstood-history

As Labour elects a new leader, some thoughts on Labour's misunderstood history.
April 04, 2020

  British politics has an intimate relationship to history, not least Labour politics. But it's often a version of history that never really happened.  In order to generate fresh thinking about policy – something sadly lacking in the leadership debate – Labour has to free itself from the shackles of its own invented histories. An intelligent and respectful politics of the left needs a richer account of what Labour has proposed and what has actually taken place.

The standard history goes like this. Labour's greatest triumph by far followed from the 1945 election. Clement Attlee's Labour created the welfare state. It generated a new consensus, called the post-war settlement. From then on things decayed. Harold Wilson gave us the modernising White Heat, which soon fizzled out leaving only a few embers glowing. Harold Wilson returned in 1974 and with James Callaghan gave us more "tax and spend" and the "winter of discontent". Poor old Michael Foot left the "longest suicide note in history". Tony Blair under New Labour gave the party, according to taste, unprecedented sequential electoral success, or betrayed nearly everything Labour had stood for.

In political debates about Labour history, then, there are only three positive reference points: a great reforming state welfarist 1945 programme, a techno-enthusiastic 1960s programme, and a policy-light 1997 programme. And at first sight that looks like, from both sides of the argument, what the choices are today: back to 1945, or to 1997 minimalism, both perhaps with a dash of the white heat. Indeed Tony Blair in a recent speech full of incantations about a technological revolution, denounced Corbyn's policy agenda as ' hopelessly out of date' in its focus on the state,  and argued in effect for a return to 1997. 

But these reference points are too often little more than clichés, with little bearing on what Labour policy actually was. Ken Loach's film The Spirit of '45  told the story as the story of a creation of a welfare state where there had been none.  Jeremy Corbyn compared the possibilities of the 2019 election with those of 1945, evoking the creation of the NHS. In fact, health and social services (the term welfare state in the modern sense did not exist) barely figured in the party's 1945 manifesto. What Labour did, once it was in office, was significant, but it did not create the welfare state, or even public medicine. It extended and reformed a Tory working-class welfare state from 80% to nearly 100% of the population. In doing so it made important advances, but it also entrenched the regressive Beveridgean poll tax and its concomitant low benefits. For all, rather than for the many, one might say. It was the universalism of the new welfare system (not least in health) and the new methods of delivery, the increases in some benefits, which were important, not the supposed creation of a system where there had been none.

In fact 1997 was a deeply welfarist moment. Indeed, only recently both Gordon Brown and Tony Blair have argued that Labour's whole tradition was to create and sustain a welfare safety net. Labour was welfare. But there had been another important welfarist moment: the 1959 manifesto, the high point of revisionism under Hugh Gaitskell.  Under the revisionists, and New Labour, the underlying argument was that capitalism, including British capitalism,  was doing just fine – what was needed was a tax and welfare system to make up for its limited deficiencies. Tax and spend was the policy, even though New Labour associated it with Old Labour (again illustrating how misleading the standard histories are).   In fact even if one looks at tax as a proportion of GDP, the  peak tax measured as tax and national insurance as a percentage of GDP came not in the Labour 1970s, but in 1981/82 and 1984/85, under the Tories.  Spending as a percentage of GDP, excluding investment, also peaked under the Tories,  in 1981/2. Incidentally the real industrial "winter of discontent" came in 1979-80, under the Tories.

In fact, for most of Labour's history, it has downplayed welfare. Its manifestos promoted it as the party of social and economic transformation, not welfare. The 1945 manifesto, "Let us Face the Future", claimed that that "the nation needs a tremendous overhaul, a great programme of modernisation" – and promise to bring that about by "keeping a firm constructive hand on our whole productive machinery". This this spirit was present in most election programmes until the 1990s. It was revived, probably without recognition that this was a core Labour tradition, in the 2019 manifesto, with its promise of a Green Industrial Revolution destined to transform national infrastructures. Here was a commitment to putting the collective national interest ahead of private interests, and the 1964 spirit of the transformation of (private) business though modern technology, in a radically new context. Indeed, the 2019 manifesto was decidedly non welfarist, except in relation to housing and tuition fees. There was no proposed transformation of the welfare state, no return to benefit levels of the past. There was merely a much-needed rejection of recent cruel gaps, caps and clawbacks and a halting of Universal Credit until a better system is found.

It is also worth noting how much less radical the 2019 manifesto was in crucial respects. Compared to the nationalisation programme of 1945, the one proposed in 2019 was a minnow. The party did not propose nationalisation of manufacturing – whereas in 1945 iron and steel was included, and in the 1970s, aerospace and shipbuilding were to be added to the many already nationalised manufacturing sectors. In proposing to nationalise broadband the party followed the precedent set in 1868 for the telegraph and 1912 for the telephone, not that of 1945.   In 2019 it endorsed the Trident replacement, whereas in 1983 it was deeply hostile to nuclear weapons.  In 1983 it produced a pro-Brexit manifesto, in 2019 it wanted the closest possible relationship with the EU.  That 1983 manifesto was by the way not only very long, but also very thoughtful. It was a serious plan for transforming the British economy.

Labour's past is a resource, an important one, for the party. But too often the usually recalled history does not do justice to the variety of Labour's policies, politics and practices, which were never fixed in time, nor easily understood on the usually defined left-right axis. To reinvent itself, as either a radical or a conservative force, it needs not only a better grip on the present but a much richer, more practical understanding of its past.  One way or another it looks as if the future will require not merely welfarism but economic transformation and in this respect it has been Old Labour which saw the future first.