A sneaking admiration for Trump

I never thought I’d write these words, but I feel a little wry admiration for Donald Trump right now.

Even more amazing, that admiration is about the level of intelligence – or at least cunning – he’s shown. That’s surprising because I’ve come to think of him as one of the dumbest politicians around. Isn’t it odd how the Republican Party has managed to outdo itself each time it’s won the White House recently, following an accelerating downward trajectory? 

It’s clear these days that Reagan was already suffering from the Alzheimer’s that fully declared itself after he stepped down. George H. W. Bush was staggeringly incoherent. Dubya needed documents summarised for himself, presumably using short words only. And now Trump’s smartest comment on the presidency was that it turns out to be harder than he thought (“I thought it would be easier”).

What a brilliant insight that is.

Against that setting, you just have to pause in at least a little wonder at the way he’s handled the firing of James Comey as Director of the FBI. 

Trump and Comey: a drama of craftiness. Nastiness too

Follow the steps carefully.

First Comey revealed, on 28 October 2016, that the FBI was investigating another batch of e-mails of Hillary Clinton’s to establish whether they were evidence of a criminal act. 28 October. The election took place on 8 November, just eleven days later. On 6 November, he announced that there were no grounds for a prosecution – but that was only two days before the election and the damage was done. 

The fault for losing was certainly Hillary’s, for a poorly run campaign, but there’s no doubt that Comey nailed her coffin lid shut: without his intervention, states like Florida, Michigan, Wisconsin and Pennsylvania which Trump won by excruciatingly tight margins, might have tipped into her camp and her victory in the popular vote would have been turned into a victory overall, giving her the White House.

But then Comey turned on the man he’d helped elect. He let it be known that the FBI was actively investigating links between the Trump campaign and the Russian secret services. However enthusiastic it was about the 28 October revelations, the Trump administration was unlikely to be quite as pleased about these ones. 

It’s hard to grasp what Comey could have been about. Was he trying to be even-handed? If so, it turned out to be misguided.

Next Comey appeared before the Senate Judiciary Committee on 3 May and gave blundering testimony which had to be “clarified” (i.e. corrected) later.

Now comes the final act. This is where Trump displayed his cunning. On 9 May, Trump fired Comey – but not for the Russia investigation. Oh, no. For his actions in the Clinton case.

Talk about win-win. Trump gets the bump eleven days out from the election that the revelations provided. Then he can use exactly those revelations to fire the man that made them, when he became embarrassing in turn.

Pretty cunning, isn’t it? Low cunning, maybe, but cunning all the same.

Except, of course, if I can see through it, so can most people. It’s a pretty crass manoeuvre obviously guided by pure self-interest. And whatever Trump does, the pressure on him isn’t going to let up. In fact, the pressure keeps growing precisely because of what Trump does.

Not cause for all that much admiration, then. But when you’re talking about Trump, you don’t wonder about how much admiration you can have for him. You wonder at feeling any admiration at all.

Interesting times for the world. Or a Chinese curse at least

What we tend to forget about economics, is that it takes a long time for changes to work their way through. A long time, that is, relative to political careers.

Ronald Reagan, enthusiastically supported and followed by Maggie Thatcher, began to dismantle economic regulation in the 1980s. The process culminated in the repeal of the US regulations (the Glass-Steagall Act) that prevented any individual bank providing both retail functions, such as current accounts or personal loans, as well as much riskier investment services, in 1999. The repeal was initiated by Republicans, but backed by President Clinton, so no party is blameless in this sorry episode.

That means that over nearly twenty years, the structure of regulation that had been set up in the wake of the great crash of 1929, and which had prevented any bank failures in the States for half a century, was deliberately dismantled. Because the process took so long, a lot of people could claim credit for the prosperity apparently generated as a result: Reagan, Bush, Clinton and little Bush in the US, Thatcher, Major and Blair in the UK.

These leaders seemed sound managers of their own nations’ and the world’s economy. But that’s because the eventual consequences of the deregulation were only incubating below the surface. Apparent success was being furthered by a wild drive for increasingly risky financial gambling, building up a mountain of unreal value which had, eventually, to collapse.

In 2008 it did. As a result, in Britain blame for the failure tends to be assigned to Gordon Brown, Prime Minister at the time; in the US, although the crisis began to break at the tail end of the Dubya Bush presidency, Obama was in office as it spiralled out of control, and he had to take the steps needed to restore stability. For which he can then be blamed or praised, depending on taste.

It feels to me as though we’re about to see a similar phenomenon. For over twenty years now, the West has been watching the Chinese economic miracle with amazement. At times when our economies have struggled to grow by 2 or 3%, China has seen growth of nearer 10%, year after year after year. Some economists warned that the rate was too high, and could not be sustained in the long run. Indeed, a time of reckoning would come, when this house of cards too would fall.

If you keep saying that for several years, and the growth just keeps happening, eventually you sound like the boy who cried wolf. A belief becomes established that the good times will continue indefinitely, and that those claiming otherwise are merely doom sayers.

Sadly, the reality is simply that it just takes economic phenomena that long to become manifest. In recent times, we’ve seen increasing signs of weakness in the Chinese economy. There has been a steady decline in growth so that, though still high by Western standards, it has now fallen to around the 7% level (though some suspect that the true figure is lower: facts aren’t always easy to come by in China). The trend is firmly downwards.

Economic Growth in China: the International Monetary Fund view

In the last few months, there have been interest rate adjustments, share suspensions and now, for two days in succession, devaluations of the currency (the first of them trumpeted as a “one-off” measure).

It’s beginning to feel as though the wheels may be coming off the bus, as some economists were warning years ago. Once again, we have been lulled into false security by the fact that such processes take so long. Once they start to unravel, they can slide fast and be acutely painful for a long time – look at Greece.

The comparison with Greece is an interesting one. Because the Greek economy is a sideshow, in the global scale of things. China, on the other hand, is the world’s second economy. If it gets into trouble, Greece is going to look like a gentle dip in the smooth running of the international financial system. It’s encouraging that voices are already being raised in the US to protect its economy against the possible effects of a Chinese downturn. They need to be heeded.

As far as I can tell, it’s an urban myth that “may you live in interesting times” is a Chinese curse. It does, however, look as though we may be about to enter some interesting times. And the cause may well be a curse from China.

Nicola Sturgeon: another voice raised for a (moderately) radical approach to our problems

Nicola Sturgeon, leader of the Scottish Nationalist Party, speaking in London today, called for an end to austerity policies and described their continuation as “morally unjustifiable and economically unsustainable.”

Nicola Sturgeon of the SNP:
A radicalism so mild it's barely radical. But it's still refreshing to hear

Consensus is attractive when the alternative is conflict, but much less so when it just means conformity. Especially when what we’re conforming to is principally a matter of fashion.

It has been fashionable in the leading economies since the 1970s or 1980s, to proclaim belief in the working of free markets with minimal regulation. That view tended to come in tandem with faith in trickle-down economics: a free market will allow highly entrepreneurial individuals to make a great deal of money; when they spend it, the resultant wealth will trickle down to the rest of society.

Many of the measures that had been put in place to control, in particular, the financial sector were dropped during the time of Thatcher and Reagan. Unleashed, the banks took increasing risks in order to amass unprecedented fortunes, until they took a risk too many and came unstuck in 2008. At which point, people who had spent decades decrying state intervention, turned to the state – more precisely to all taxpayers, including the poorest – to rescue them from the disaster they’d brought down on themselves.

Unfortunately, holding out their hands to the state didn’t mean that these leaders of economic thinking were prepared to dump the ideology which, particularly in its trickle down aspect, had made them inconceivably rich over a generation.

The success of trickle-down was measured by their wealth; its failure by the impoverishment of everyone else. As Will Hutton argues in his insightful piece in today’s Guardian, “wages have fallen, in real terms, by the greatest degree in more than half a century, inequality of income and wealth have risen to desperately high levels that may soon metastasise into a serious economic and social cancer.”

Sadly, in Europe we’ve been driven since the 2008 crash by such carcinogenic thinking. The consensus claims that austerity is the only way out of this crisis: reduce government deficits and debt by slashing public spending, and we shall cure our problems. As Hutton points out, all this is achieving is to create a society in which “millions of workers struggle in a harsh demimonde of temporary jobs and zero-hour contracts.”

And yet these ideas, the new fashion, merely replaced economic thinking which could really explain our problems. The theories of John Maynard Keynes showed that it isn’t by reducing expenditure that a government gets out of economic difficulty, but by making investments. That provides employment which increases the tax take from workers, and it stimulates the economy to grow by increasing demand – which also increases the tax take. So paradoxically, the government may well get its deficit down more quickly by spending more, not less.

But we’ve been living the Reagan-Thatcher consensus. Keynes is out. Austerity and trickle-down are in. And, sadly, conformity to that credo has extended way beyond the traditional conservative parties. Many in the Labour Party, not least Tony Blair and his one-time voice piece Peter Mandelson, who famously – infamously – once declared himself “intensely relaxed about people getting filthy rich.”

Well, I’d be relaxed about it too, if getting filthy rich didn’t always happen on the backs of a lot of poor people getting a great deal poorer.

To stand for a different set of ideas, for Keynesian ideas, is regarded by the proponents of austerity as a dangerous reversion to old-style, wildly left-wing socialism. Which is odd, since whatever Keynes was, he wasn’t a socialist. He wanted capitalism better managed, as does Hutton.

Calling for better management of our capitalist economy is dangerously radical? 

Seriously?

Keynes: hardly a left-wing firebrand
But we need his approach back, and that has to come from the Left

Fortunately the conformity to this dire consensus hasn’t been total. Every now and then a voice speaks out against these failed and failing views. And, recently, sometimes those voices have been heard.

I spoke yesterday about Alexis Tsipras in Greece. Succeed or fail, at least he’s trying a different approach in a country driven to despair by the previous policy of austerity.

Now Nicola Sturgeon has also spoken out. She, like many of us, feels there’s nothing tremendously inspiring about a Labour Party promising to do the same as the Tories, but a bit less, and a bit less fast.

And yet what she’s proposing isn’t that radical: an increase in spending of £180bn over five years of a parliament. That represents less than two years of running the English NHS, spread over five. Not exactly revolutionary: like Hutton, like Keynes, she just wants capitalism to behave more fairly.

But compared to everyone else calling for more cuts, isn’t it refreshing?

How sad that it has to come from a party whose main aim is the independence of Scotland. That the great party of the left in England, the Labour Party, didn’t beat her to it.

Ed Milliband, Ed Balls: come on, if Sturgeon can do it, surely you too can speak out for a real alternative to the failed policies of the Tories?

Tears before bedtime, when a big bang spoiled the party

Fascinating to get into a debate about the finer points of economic theory at any time, especially as my knowledge of the field is strictly limited: I try to make up in enthusiasm and conviction for what I lack in actual expertise. But then, arguing from strongly held belief without much knowledge puts me in august company, including most religious leaders down the ages.

What added spice to my most recent foray into the field was that it was conducted on Twitter. Debating the economic history of the last 80 years in 140-character bites is, frankly, challenging. Though no doubt my opponents would argue that my views don’t warrant much more.

Still, I’ve decided that I owe it to myself to take the slightly greater space a blog post affords to summarise my thinking more fully here. You, of course, by no means owe it to me to read on; however, if you do, I promise I’ll put in one or two funny bits before the end.

My potted history of the world economy over the last eighty years

There was a pretty ghastly depression in the 1930s. One of the worst ever.

A major step forward was taken when the US turfed the ghastly Republicans out. The incumbent was Herbert Hoover who gave his name to a dam. He was certainly a spectacular blockage to any kind of forward movement.

Alongside Roosevelt’s New Deal, a number of measures were put in place to ensure that no similar financial collapse would ever happen again. In particular, the Glass-Steagall Act included provisions to prevent the same organisation being involved in both investment banking and retail banking.

That makes sense since investment banking can lead to huge gains, but at the risk of massive losses. If only the money of wealthy individuals is involved, fine; if it’s the savings of millions of modest individuals, and the firms they rely on for a living, it’s not so smart.

Now fast forward to the 1980s. The ghastly Republicans led by Ronald Reagan are back in office in the US, supported with poodle-like loyalty by Maggie Thatcher in Britain.

They listen to bankers, outstandingly qualified to brief them on economics, notably by virtue of having bankrolled their electoral successes. The bankers want a bit less constraint. Reagan and Thatcher confer. There’s been no great financial crisis since the Glass-Steagall Act, so what is it protecting us from? We might as well do away with all that red tape.

As they sowed, so we are reaping. And weeping too.

At this point I’m reminded of a story told me by an intensive care physician. He was treating a man close to death from malaria. The patient went hunting each year Burkina Faso.

‘Don’t you take malaria tablets?’ my friend asked.

‘Well, I did for ten years, but I never got malaria so I thought I didn’t need them.’

Reagan repealed the relevant bits of Glass-Steagall. Thatcher brought in the ‘Big Bang’ in the city.

Released from their bonds, the bankers leaped exultantly into action. For twenty years they made fortunes and they paid themselves huge sums. What a great time they all had! As the guy I was arguing with on Twitter pointed out, ‘Big Bang was good for Britain.’ Measured by spiralling house prices, the number of Porsches on the streets and the amount of champagne consumed, that’s how it felt.

The nay sayers were, of course, saying ‘nay’. Even Alan Greenspan, then Chairman of the US Federal Reserve, warned against ‘irrational exuberance.’ But everything kept going well, year after year. And people don’t tend to think much further than a year or two. Few, apart from some of the better economists, realised that we needed to be reasoning in decades.

As it happens, two decades were all it took. The exuberance ended in 2008 when the present financial crisis blew up in our faces. The worst, surprise, surprise, since that of the 1930s. The smarter economists said it would end in tears, and here we were, crying.

How did I get into this argument? Because I criticised the present British government for trying to blame today’s banking scandals on the previous, Labour administration.

‘The recent scandals took place while Labour was in power,’ I was told. Which is true. But we mustn’t forget that it was Republicans and Tories who unleashed the bankers to wreak their worst on the whole of society.

The criticism that Labour deserves is that in office they did too little to re-establish effective regulation. It was hard, though. After ten or more years of huge apparent prosperity following the Big Bang, there was a powerful consensus that this was the way to build a stable, thriving economy. Labour wasn’t immune from that generalised belief.

Here’s an extract from a speech making clear how deeply ingrained that thinking was:

The Left advocated more intervention and government ownership. Those on the Right argued for monetary discipline and free enterprise.

Over the last 15 years governments across the world have put into practice the principles of free enterprise and monetary discipline.

The result?

A vast increase in global wealth.

The world economy more stable than for a generation.

The speaker ended by haughtily declaring ‘the debate is now settled’.

Who was the speaker? The then leader of the Conservative opposition, David Cameron. When did he make this speech? In September 2007. A year later, the crash burst on us.

And two and a half years later, God help us all, he became Prime Minister.

Giving an outstanding figure the credit due to him

Popped down to Grosvenor Square this lunchtime, to admire the latest fine piece of statuary to adorn the streets of our great capital.

The Great Communicator and his smile, bringing comfort to us all

Yes, it’s a that fine figure of a man, Ronald Reagan, late President of the United States, smiling benignly on the world. That’s what he did so well in his time – smile benignly, possibly because he wasn't too sure just what was going on, but was basically a likeable old fellow so he would smile to cheer us all up. I’ll bet he was just as amiable to his good friends in Hollywood in the fifties, when he was spying on them during the McCarthy witch hunts.

Anyway, there he is, not a stone’s throw from the US embassy. Though I’d never want to test the distance in quite so rash a way: throwing anything in the direction of that Embassy would be distinctly career-limiting. I’ve never seen such a concentration of armed British police. I asked one of them where the statue was – it’s well hidden by trees – and the glower he gave me made my blood run cold. Fortunately, he realised I wasn’t making a subversive suggestion – to read the Koran, say, or endorse something dangerously radical such as an environmental movement – but merely wanted to admire the statue of Thatcher’s great friend, at which point he became all sweetness and light. It was with a face wreathed in smiles that he pointed me in the right direction.

Thatcher certainly thought the earth of Reagan. The man who won the cold war without firing a shot, she reckoned, and her judgement in these matters was generally pretty sound – after all, though many who were less loyal and less resolute abandoned him, she remained staunch in her support for the man who restored order in Chile, Augusto Pinochet, and she must have been among the last to give up the courageous view that the ANC in South Africa and its leader Nelson Mandela were a bunch of terrorists.

In any case, no-one can deny that Reagan never fired a shot in the Cold War. Of course in 1984, he did announce ‘my fellow Americans, I am pleased to tell you I just signed legislation which outlaws Russia forever. The bombing begins in five minutes’ but he didn’t actually drop any bombs. It was just one of those endearing bits of Reagan humour and, hey, if you can't take a joke, you shouldn’t be in politics. Even in Moscow.

And the Cold War certainly ended while he was President. So he must have won it, right?

Come to think of it, the sun rose 2922 times during his reign – sorry, period in office – and that too was of immeasurable benefit to mankind. Is this another area, I wonder, where we haven’t sufficiently acknowledged his contribution to the wellbeing of his fellow creatures?

Nixon and his successors: rememberance of things past, anticipation of things to come

Little incidents can bring buried memories flooding back, so that a distant moment is suddenly with you again as though you were living it now.

For Proust, it was the taste of a Madeleine cake conjuring up his childhood.

For me, this weekend, it was seeing the latest releases of extracts from the Nixon tapes. Suddenly, I was back in a New York street, in fine rain, the street lights glistening on the wet pavements, in front of a shop window with a poster whose evocative message had stopped me in mid-stride.

Tricky Dicky: man of confidence or confidence man?

Oh, for those long-lost days when the United States had a President who was clearly not a man forced into politics only because he couldn’t make a success of any other career. With his wits and ethics, Tricky Dicky Nixon could have flourished in many other walks of life. Say, as a market trader.

Doesn’t it warm the cockles of the heart to remember those glorious aphorisms of his such as ‘When the president does it, that means that it’s not illegal’?

What’s been coming out now? It seems that ‘…the Irish can’t drink … Virtually every Irish I’ve known gets mean when he drinks. Particularly the real Irish.’ The Italians: ‘those people … don’t have their heads screwed on tight.’ And as for the Jews, they ‘are just a very aggressive and abrasive and obnoxious personality.’ Don’t limit your amazement to the sentiment, let yourself go in wonder at his command of the English language too.

As for Blacks, he commented on the view expressed by a colleague that ‘they are coming along, and that after all they are going to strengthen our country in the end because they are strong physically and some of them are smart’. ‘Some of them are smart’ and ‘they are coming along’ were, it seems, judgements that were just a little too generous. ‘My own view is I think he’s right if you’re talking in terms of 500 years. I think it’s wrong if you’re talking in terms of 50 years. What has to happen is they have be, frankly, inbred.’ Ah, yes, a little breeding is what these people need. Presumably to turn them into shining examples of humanity such as the Nixon product itself. And don’t you just admire the prescience? I mean, he was speaking over three decades before the election of Obama.

I noticed that USA Today reacted with something less than enthusiasm to one of Nixon’s utterances. Talking about the prospects of Ronald Reagan occupying the Oval Office, he had said ‘Good God, can you imagine – can you really imagine – him sitting here?’ And he added ‘I can imagine anyone ... but Reagan.’

The paper seemed to feel that Nixon had revealed a character flaw (even the finest have them) in misjudging this great man who would indeed eventually follow him into the White House.

Reagan had his own magnificent quotations. Faced with student unrest at Berkeley, he showed his resolution: ‘If it's to be a bloodbath, let it be now. Appeasement is not the answer.’ Later, he denied that he had called for a bloodbath. He’d probably forgotten he’d said it. His was another of those times that conjure up feelings of nostalgia, in his case for a President with the gifts that come from incipient Alzheimer’s.

Since then the same Grand Old Party has thrown up two George Bushes to teach us to rate Reagan more highly.

But it isn’t nostalgia that is my main emotion today, it’s that delightful tingle that anticipation of the future gives. Could the Republicans be about to serve us up another White House occupant to make even Dubya look good?

Remind yourself of gems such as:

“Refudiate,” “misunderestimate,” “wee-wee’d up.” English is a living language. Shakespeare liked to coin new words too. Got to celebrate it!’

Isn’t that worthy of Nixon at his best?

And what about:

... obviously, we've got to stand with our North Korean allies.

The command of foreign policy and sensitivity to its nuances is deeply reminiscent of Reagan, isn’t it? For instance, in his famous statement into a live mike:

My fellow Americans, I am pleased to tell you I just signed legislation which outlaws Russia forever. The bombing begins in five minutes.

Who’d have thought anyone could make us look back on Reagan and Dubya as men to miss? And to feel that Tricky Dicky, deceitful, racist and convinced he was above the law, represented something of a golden age?

Yep. Get ready to enjoy the Sarah Palin show.