Anthony Painter

I have just finished mopping my bran flakes off the carpet following an involuntary reaction to hearing George Osborne describe his financial reform package as ‘Obama style.’ Just to reassure myself that I hadn’t been hearing things, I took some time to listen the the entire Today interview once again (it’s was on at 8:10am) and read the reform package that the Shadow Chancellor announced in July.

Well, my reflexive response was not unjustified it turns out.

Here’s what President Obama said about splitting retail banking from proprietary trading etc:

“It’s for these reasons that I’m proposing a simple and common-sense reform, which we’re calling the Volcker Rule, after this tall guy behind me. Banks will no longer be allowed to own, invest or sponsor hedge funds, private equity funds or proprietary trading operations for their own profit unrelated to serving their customers.

If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so responsibly is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.”

Notice that it is a clear set of proposals- not aspirations, hopes, something to be discussed, speculated about, agreed with other governments or the financial services industry. Of course, these proposals will have to travel through Congress. But the starting point is absolutely clear.

Now here is the Conservative policy (apparently George Osborne doesn’t really bother reading policy documents- keeps the public pronouncements guilt free and the body language in check I guess):

“We will empower the Bank of England to impose much higher capital requirements on high risk activities such as large scale proprietary trading carried out by banks that also take retail deposits. In practice this could [my italics] prevent banks that take retail deposits from engaging in many of these high-risk activities by making them more expensive. At the same time the Bank will examine the case for a more structural separation of these activities in international policy forums.”

So it’s not a separation proposal at all. It is about ‘empowering’ the Bank of England. It is contingent on international negotiations in a way that President Obama’s proposals are not. It may or may not happen. In fairness to George Osborne, Mervyn King is broadly in favour of these changes but these Conservative proposals will tie his hands.

Nonetheless, to go around saying that he believes in the type of separation proposed by President Obama is beyond disingenuous. And it’s beyond his party’s policy. Which, one has to suppose, is his policy too.

It also marks a trend in Conservative campaigning where they float aspirations and hopes as if they were policies in an attempt to deflect proper scrutiny. They may think that’s a clever approach but I guarantee it will make them look incredibly shifty in forthcoming campaign- just as George Osborne appeared this morning once Justin Webb got his teeth into the issue.

* Picture from the excellent Stuart King for Putney, Roehampton and Southfields website. (If I give him a credit, I’m hoping he won’t be stroppy with me for nicking it!)

So the Democrats lost Massachusetts- meaning that the Senate healthcare reform bill will probably now have to be forced through the House in advance of the State of the Union speech next Wednesday. President Obama’s approval ratings are hovering somewhere around the 50% mark (catastrophic right?); America is still mired in Afghanistan; prisoners are still in Guantanamo Bay; the economy is still bumpy and job losses are mounting; and the climate change has disappeared from the agenda. It hasn’t been the first year that many had hoped for- naively in my view.

Cards on table, Barack Obama has had a really strong first year when looked at in an historical perspective and in a contemporary perspective also, i.e. how he has contended with the issues that he has had to face. The Right argue what they argue and it’s just background noise really; there are also voices on the left who will never be satisfied. But overall this is a strong start to a presidency.

The problem is that- contrary to what may have been thought following his explosive campaign- he doesn’t seem to quite be taking the American people with him. My review of President Obama’s first year on LabourList this morning concludes (full article here):

All told, it’s been a good first year. He is governing wisely. He is delivering change. It now needs to become change that Americans fully believe in.

Anyway, just in case you have a sentimental wave today- probably not- but just in case, here is the inauguration once again:

So time to finally answer the question that you’ve always had on your mind, nagging you like a lost baseball card. Which was greater: the presidency of Abraham Lincoln or Super Bowl XVI?

There have been 44 US Presidents. And this year is, you guessed it, Super Bowl XLIV! So a sports writer from Philadelphia, Don Steinberg, has- using his knowledge of US history and politics and the history of the Super Bowl- matched up each president in a head-to-head with their corresponding Super Bowl number. Check out America Bowl for the half-time scores (Presidents currently lead…) Here are the rules:

There have been 44 presidents in U.S. history, and on February 7, 2010, the 44th Super Bowl game will be played. For the only time in history, America’s greatest institutions will be all even with each other.

But which have been better? Our Super Bowl games? Or our Presidents? Finally, we can find out!

Each day, for 44 days leading up to Super Bowl 44, America Bowl will match a President against the same-numbered Super Bowl game. Each day one will win — and score a point.

It will all come to a head on February 7, when Super Bowl XLIV is matched against 44th President Barack Obama. Will it all come down to who wants it more on that last game day? Keep checking in here to find out!

So February 7th will be momentous. Obama or the Jets, Colts, Saints or Vikings?

Don Steinberg has even laid on some half-time entertainment, US Super Bowl style:

So how did Lincoln fare against Joe Montana and the 49ers in Super Bowl XVI? Over to Steinberg:

Joe Montana led the 49ers to an impressive 26-21 win over the Bengals, passing for one TD and running for one — but he didn’t free the slaves.

The game was among the most widely watched television broadcasts in American history, and it featured the debut of the Telestrator — but it didn’t hold a fractured nation together through a Civil War.

San Francisco’s 20-0 halftime lead was the largest shutout lead at halftime in Super Bowl history — but it didn’t deliver The Gettysburg Address.

And who could argue with that?

At last someone has had the courage to take on the big brother state. How we need an Orwell for our times as the Government- yes, the Government that is supposedly democratically elected- use our money to control our own minds. Comrades Foucault, Bourdieu, Huxley, your voices are needed now more than ever. I am talking of course about public information campaigns- a Pravda for democratic times.

And we are fortunate that one organ of freedom, the Daily Telegraph, has had the courage to take on this propaganda. In the name of supposedly worthy causes like public health, the Government has been hiding its real intent: to convert us on mass to one cause- vote Labour. As courageous Tory MP Grant Shapps points out, these adverts- which even use notorious mind-bending technologies such as the ‘internet’- are thinly veiled attempts to turn us into healthy-living, Labour-voting conformatrons.

I’m not suggesting anything but has anyone heard from Grant Shapps this morning? This is what happens to enemies of the state. But I will not let his warning go unheeded. Brave defenders of liberty, you must shout the truth from every street corner if we are to fight state control of the machinery of information: propaganda is everywhere but we must sift through the sludge of totalitarianism if we are to find a single gold nugget of truth.

Take this ad:

Though I saw it as a hard-hitting anti-smoking ad at the time, the Shapps/ Telegraph mission of glory has opened my eyes. It is actually quite clearly saying: support the Glorious Leader or we’ll set fire to your children….from the inside. How could we have allowed our so-called democracy to be perverted in this way?

And look at the tears on his little face. What greater manipulation could be imagined? This ad taps into to our feelings of loss at the many fallen from the May Day Revolution of 1997. So many brothers and friends were lost in the struggle. How can we fail to mourn their loss? This sentimentalisation is a sophisticated attempt to tranquilise our suffering and secure our devotion. Imagine if the USSR had had such techniques? It might have survived.

Or take this ad:

Now, when you first saw it, you might have thought that this was related to the epidemic of Swine Flu that spread thorough the ‘Republic’ in the twelfth year of the Glorious Epoch. How wrong you were. Firstly, Swine Flu itself was a lie designed to send us into a frenzy of panic and love of the state’s authority. Secondly, what is this ad really saying?

It is nothing less than an attack on freedom and democracy itself: what we call Conservatism. It is enlisting us all in a struggle against the enemies of the state- Comrade Cameron and his fierce Resistance. It is instructing us to catch ‘a Tory,’ then bin ‘a Tory’ , then leave them for dead. This week alone I have had to fish Comrades Hague and Willetts out of roadside skips. Many more of our greatest freedom fighters have been similarly accosted.

So now is the time to say enough is enough. It is time to rise up against the destruction of our basic human devotion to Toryism.

Oh, and I see that the praetorian guard of the state is already engaged in counter propaganda. Some are arguing that this attack on state lies is actually a defensive tactic. We are trying to hide the fact that the Resistance is far better funded than the Central Committee. Outrageous.

They’ve even deployed a supposedly independent magazine to disseminate their mendacity. The New Statesman has claimed that Tories will have double the election war chest of Labour in the coming sham election. Beware of their lies, remain strong, and fight for our noble cause.

In a typically fascinating piece by John Cassidy in the New Yorker (digital subscribers only I’m afraid, boo-hiss), he looks at the state of the ‘Chicago school of economics’, the bastion of the monetarist, neo-liberal thought that was so important in changing the tide of political economy in the 1970s and beyond. It’s clearly been a bad couple of years for the traditional elements of the school.

Converted on the road to Damascus include Richard Posner who is the main focus of the piece and has re-discovered, or more accurately discovered, The General Theory of Employment, Interest and Money by John Maynard Keynes. A lot of economists have. From a committed belief in neo-liberalism, Posner now sees the credit crunch as a ‘failure of capitalism.’

It was a another member of the ’school’ (a term that Posner now suggests should be ‘retired’) who really caught my eye, however. Raghuram Rajan, economic adviser to Manmohan Singh, Prime Minister of India, and former chief economist of the IMF, is working on a book that the crisis was caused by……inequality.

To quote Cassidy:

“Rajan argues that the initial causes of the breakdown were stagnant wages and rising inequality. With the purchasing power of many middle-class households lagging behind the cost of living, there was an urgent demand for credit. The financial industry, with encouragement from the government, responded by supplying home-equity loans, subprime mortgages, and auto loans.”

OK, so I’m sure that Rajan doesn’t dismiss the role of irrational expectations, global imbalances, deregulation of finance, and good old-fashioned irrational exuberance. But his critique is powerful- in effect it is an argument that neo-liberalism made the market more ‘efficient’ but exposed it to calamitous breakdown. And it came in the form of the credit crunch and subsequent recession.

His argument goes further- there is a bias in the US economy towards over-stimulation. Without strong social safety nets, having a job becomes paramount. So not only is there a need for the individual to borrow more as wages become squeezed (as they did in the US) but there is a macro incentive to over-stimulate as well. In this reading, Alan Greenspan was a victim of the system- underpinned by poltical choices- as much as anyone else.

None of this more fundamental discussion has happened in reaction to the credit crunch. Maybe these discussions can give life to the second stage of Barack Obama’s presidency.

Rajan’s book Fault Lines seems like a must read when it comes out. The implication seems to be clear. Capitalism must be saved from itself. Social democracy seems like a logical reaction to ensure this in the post credit crunch world.

The Labour party clearly hasn’t distinguished itself this week. Actually, contrary to the prevailing feeling in the party at large I don’t feel any anger towards Geoff Hoon and Patricia Hewitt for thinking what they think or for saying so publicly. They are entitled to do both and a Guardian leader this morning is a pretty fair assessment- I don’t agree with all of it but I do agree with much of it. However, the time to do that was last June. Not now.

We can’t as a party get ourselves in a position where people are not allowed to express perfectly legitimate opinions without being vilified- that’s a recipe for ossification. However, the months leading up to a general election require certain disagreements to be down-graded because there are bigger arguments to be had- and they are all with the Conservatives. That’s the mistake the Hoon and Hewitt made and if they were promised political cover by certain Cabinet ministers who failed to follow through on that then that reflects very badly on those individuals in every conceivable respect.

Actually, the Labour party, in ideological and policy terms, is more united now than at anytime since the (mid) 1940s. The opposite is the case with the Conservative party. In leadership and political terms they seem very united. There is a galvanising effect that years in the wilderness has on a party. In absence of strife….

However, in ideological and policy terms they are exceedingly disunited. Ultimately, this will boil over and render David Cameron’s leadership impotent (and his clear vacillations- on Married Couples Allowance, the role of government, Education Maintenance Allowances- reflect these divisions.) But not now, which makes it even more important that the Labour party retain its discipline in the current months.

There are six Conservative divides that warrant further discussion (there are more…):

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Despite its anodyne title- Going for growth: building Britain’s future economy- Lord Mandelson’s speech to the Work Foundation was a strong exposition of the need for strategic intervention to foster growth. When he’s not saving Prime Ministers, it would seem the the Secretary for Business, Innovation and Skills (I’ll save you the joke about all his other titles made so tamely on Newsnight by Jeremy Paxman last night) is doing serious thinking about the role of the state in supporting, diversifying and moving the British economy up the value chain.

There is lots of regional specialisation, coordination, aligning underlying strengths with economic opportunity, public-private financial support to help grow promising technology companies, and incentives for those who hold patents to grow their companies. It is a strong mix and not a moment too late.

If the economy is to shift away from a risky concentration of resources and capital on financial services then these types of intervention are necessary. If the growth is to be spread across the UK then regional coordination backed by financial muscle is critical.

The element of the analysis which is most appealing is the role of universities in promoting growth. The Government has doubled investment in science but now the challenge is- as Lord Mandelson put it- to ‘get more D out of our R and D.’ In Germany, spin-offs from academic research are second nature and this is a fundamental element of their economic success. It is why they will, in all probability, end up leading in green technologies as well. This is exemplified by the part (40%) government funded Fraunhofer Society which invests in applied science in area as diverse as solar energy and digital media. It has an annual budget of €1.2billion and companies within the Society have good relationships with the state. It is smart state intervention for the modern era.

As a follow up to Lord Mandelson’s speech opposition spokespeople will have the opportunity to outline their policies to the Work Foundation in coming weeks. You do wonder whether the Conservative faith in the free market and determination to abolish the Regional Development Agencies, who will be a key broker in all this, will be convincing. It’s difficult to see how. We are going into a different era of state-market relations and there is no sign that the Conservatives understand this.

“Everything in the campaign flowed through the prism of strategy.”

And that is the line that sums up the Obama ‘08 success. Whatever free-wheeling they did, whatever crisis emerged, and however they were buffeted by the news agenda and their political adversaries, the campaigned returned to the basic strategy (see a post I wrote on this from September 2008.) David Plouffe’s Audacity to Win presents lessons that go beyond politics. At one point, faced with a Clinton campaign swiveling like an off-balance ice skater grasping at anything at all to regain some composure, Plouffe declares that he’d rather have one bad strategy than eight good ones.

Well, history is written by the winners. I doubt that Mr.Microtrend himself, Mark Penn, will be writing about his campaign strategy. If he did, we’d all have a giggle. Political communication works on the basis of unifying messages that resonate in different ways with different groups. Mark Penn in his wisdom decided to do it a different way- pitch a cacophony of messages in the hope that by blowing on lots of dog whistles each with a different pitch, the voters would come running. The result? The inevitable winner, Hillary Clinton, lost. And David Plouffe doesn’t let Penn forget it.

Remarkably, the campaign was incredibly ramshackle at times. Plouffe uses the small start-up metaphor and it was. The benefit of the mass campaign events were discovered almost by accident. Obama emerges from an early debate in which he’s struggled demanding that the campaign puts aside some time so that they can formulate a healthcare policy. David Axelrod’s lost lap-tops and mobiles could furnish several schools with an IT suite each.

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There has been quite a bit of analysis and chatter about the blogosphere and the web and its impact on politics recently. For what it’s worth, I thought that I would stick my oar in. ‘Blogs are great- but on-line political communication in the UK is still a disappointment’ is on LabourList.

There has been an explosion of innovation in the web and social media as it applies to politics over the last couple of years. This is a thoroughly good thing. While we are in the innovation phase, there is more heat than light but things will settle down. Just not yet.

While the parties themselves have made great strides in their on-line presence, there is a basic organisational problem. New media is seen as a side bar to communication and campaigns operations. The real power comes when it is properly integrated. I note that David Plouffe in Audacity to Win (review follows later today hopefully!) made a point of ensuring the new media operation reported directly to him right from the off. That’s integration and that’s why the campaign ended up with 13 million email addresses- more than a third of whom donated and almost all volunteered. So the points I make in the piece are not a criticism of the new media operations per se; it’s much broader than that.

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There are a couple of strategic points that it is worth making about the opening salvos of the general election campaign over the last couple of days. First let’s start with the Tories.

Their strategy is very clear. There have identified the NHS as a symbol of the new ‘progressive’ Conservative party that they seek to communicate. This makes sense. The NHS is popular, it is seen as fair, and it is seen as part of our essential national institutional architecture. What’s more, in political strategic terms it offers something else. It is of great importance to two key demographics: older voters who are increasing in number and are more likely to vote (they are double in number as twice as likely to vote as younger voters), and young families, who worry about issues such as where they will give birth.

This is all good political strategy and has the added advantage of being clear. The drawback is two-fold. Firstly, there are other public services that people care about as well as the NHS and putting all one’s eggs in a single basket is very high risk. Secondly, it will require the Conservatives to have credible plans for deficit reduction. Just saying that they will do it and do it faster than Labour is not enough. The reforms that have been outlined will be costly- change always is so the benefits may not be felt for a considerable time and the change will be even slower to come through in a very constrained environment.

Labour also has a legitimate claim that much of the Tory manifesto is actually Government policy already: transparency and choice are very much the direction in which the NHS has been heading for a number of years. The major difference is over what the Tories call ‘targets’ and Labour calls ’standards.’ On this one, Labour is being slightly more frank. The Conservatives propose a regulated system of healthcare. Well, what will the regulators use to assess good or poor performance? It will be standards. So the impact, even in a choice based system is likely to be similar.

The tactical challenge for Labour will be to question the ability of the Conservatives to deliver real change given their broader commitments on public spending. Alistair Darling’s ‘credibility gap’ response is absolutely right in this regard. More broadly, the proximity of the direction Conservatives wish to take the NHS and where Labour is taking it will take it will need to be articulated.

What will be the upshot of this? Labour needs to the close down the NHS to a score-draw or sneak a late winner- Labour has transformed the standard of service in the NHS after all and should get credit for that. The Tories will benefit more broadly from the continuing de-toxification effects of being seen to campaign strongly and genuinely care about the NHS. But the bigger battles- over credibility of the parties’ plans on public spending and the economy- will ultimately prove to be more crucial.

Post script: I was slightly surprised that the Tories didn’t go for personal patient budgets rather than GP-held budgets. Clearly, GPs are the one interest group in the NHS that the Tories are willing to kow-tow to. Surely, if they mean what they say about a completely decentralised (though they carelessly and wrongly use the word ‘democratic’) and patient-focused NHS then personal budgets are the way to go? I’m not arguing one way or the other-just seems strange that they haven’t gone for that given the rhetoric.