Thursday, December 08, 2011
It's not just about money
The European debt crisis continues to dominate the news, As I write Cameron is meeting Merkel, Sarkozy and the others in an attempt to fudge yet another "cure" for the Euro. It will fail. It will always fail. And all the time the bailiffs are at the door.
Around about 2003 I started to get a premonition about the coming storm. At that time Gordon Brown was Chancellor and he expressed concern about the sluggish economy, which was dominated by consumer spending. It must have been close to Christmas. As usual, the retailers were moaning about how slow the sales were. Brown commented that he was concerned about the level of debt that the general public was running up, but at the same time expressed the hope that we would continue to spend in the shops in order to keep the economy moving.
In November 2003, Vince Cable asked Gordon Brown, then Chancellor, "Is not the brutal truth that ... the growth of the British economy is sustained by consumer spending pinned against record levels of personal debt, which is secured, if at all, against house prices that the Bank of England describes as well above equilibrium level?" Brown replied, "As the Bank of England said yesterday, consumer spending is returning to trend. The Governor said, 'there is no indication that the scale of debt problems have ... risen markedly in the last five years.' He also said that the fraction of household income used up in debt service is lower than it was then."
Put simply- Brown said, I know we're in a mess but keep spending (or I know we're in the shit, but keep paddling). We've lost the paddle.
I kept dreaming that we'd wake up in our beds to find bailiffs downstairs with papers to say that our building society had gone bust and had been bought up by foreigners and the new owners wanted their property back and we had but a few hours to get out before we would be forcibly evicted. That hasn't come true (thank God) but Europe is in a desperate situation.
1. We've given all our manufacturing to the Chinese who are no respecter of details such as copyright and patents. When we closed our factories, the machines were sold and exported and the factories demolished. We couldn't restart production if we wanted to.
2. We've based our economy on the Germans selling their cars to countries like Ireland and Greece who couldn't afford them, but bought them on credit. David McWilliams in his 3 part TV series "Searching for the Pope's Children" put this point most convincingly. I recommend you watch it if you can.
3. The Euro was launched under a false premise, and to his credit Gordon Brown refused to join. The UK was probably the only honest country. One of the conditions of joining was that our debt should not exceed 60% (I think) of GDP. Our debt was above that so we waited. All the other countries lied.
4. The solution to the Euro crisis is the reason why it was doomed from the start. The only way a common currency will work is if all the countries have the same economic strategies and budgets. It US dollar works because the central government sets budgets and economic policy for all 51 states. How can 17 countries with different economies, languages, cultures and parliaments share a common currency? The EU now wants to impose a central government that sets budgets for each of the member states. When we signed up to the Common Market, it was just to allow our goods to be traded across borders without the imposition of tariffs. We're a long way from that.
5. If the UK government caves in and allows Brussels to set our budget, then what?
I can see a number of threats to our way of life and to the distinctiveness of Britain.
The most serious is the threat of change in our legal system. English common law is based upon the simple premise that a man is innocent until proven guilty. Another way of looking at it is that in the UK everything is allowed unless it is prohibited.
Europe follows the Napoleonic Code where a man is guilty unless he can prove his innocence. That is the exact opposite of our legal code. Put another way- in Europe everything is prohibited unless it is allowed.
Such a change in the law will undo every statute going back to Magna Carta. Every law that is imposed by Brussels acts against our interests, and now you can see why. Their laws are based on an entirely different premise.
The UK's tradition of driving on the left hand side of the road while sitting in the right hand seat dates back to Roman times. It meant that the driver could pull his sword and wield it while driving with his left hand. Napoleon ordered his army to enforce driving on the right hand side of the road whilst sitting on the left hand seat in order to identify his troops, his supporters and his enemies- who were driving on the other side of the road. That is why the US drive on the left. They were also in conflict with Britain and sided with the French who were in Canada to the North, and Louisiana in the South.
If we become European, with Napoleonic laws, we will then be compelled to drive on the right.
Would that be a road too far?
I had another broken night's sleep and eventually went downstairs for a cup of tea. I switched the TV on and caught Cameron's press conference. We are now the fall guys of Europe. The EU is still doomed, the Euro is still doomed, but now they have someone to blame.
A commenter on the excellent Biased-BBC website has summed it up perfectly
"Beneath all this France and Germany cannot agree, as so cannot address the issue of the euro zone imbalances. But they need someone to blame, so the bumbling incoherent fool Cameron is just the job. He thinks he has a victory, Germany and France blame the British, and we have status quo.
I think it is as simple as this not that anything is simple with the EU
France is stuffed and can see its Banks going down the tube and wants the ECB to buy Bonds
Germany won’t allow this until there is fiscal union with budgets controlled by the EU. (Big treaty change taking forever) Austerity and punishment is all they have to offer NOW
France does not want the EU to control its budgets, as they will then have a problem with all their farmers and other small matters like that, many of which would be very similar to those in the UK truth be told.
So whatever power grab the EU is looking for they are just the hyenas circling for the scraps."
Read the complete post here