31 August, 2008

Cheers Gord

According to the BBC, Jack Straw has pledged his support for Gordon Brown.

So, it's all up with Gordon, then.

29 August, 2008

Saved for the nation

The last time the Treasury (ie, we the taxpayer) stumped up cash for a painting it was £381,500 to help buy Titian’s ‘the death of Actaeon’ for £1.8m in 1972. Now Actaeon, painted by the same guy, different pose (he cropped up a fair bit in Ovid’s Metamorphoses, which Titian must have liked), is on offer again, this time from the Duke of Sutherland, for the price of £50m, plus another Titian, again for £50m once we’ve swallowed the first. We are advised that these are bargain prices. Indeed, I have a feeling they are – it would imply inflation in artwork of less than 10% p.a. whereas it has gone up quite a bit more than that. But of course if we are never going to sell them the bargain is of less interest. We have to analyse this on a cost-benefit basis.

When I read the first reports it was a question of the National Gallery (which has, I think, 11 Titians) having had them since the war as a centrepiece and keeping them on. The National Gallery has something like 5 million visitors a year (albeit non paying), so it may well be this is not unreasonable: over a period of twenty years it is £1 a go excluding interest to see both. But further investigation tells us that they are in the National Gallery of Scotland, in Edinburgh. The NGS website doesn’t say how many visitors they have but it must be nothing like as many, maybe a million or fewer, and so the cost-benefit analysis equation is greatly altered. If you think this approach a little crude, remember that the alternative is not that the pictures are destroyed, it is that they are on view somewhere other than the UK. It would be easy to grant an export licence only if they were sold to someone who would display them.

Perhaps in these days of cheap foreign travel we should be looking in a different way about ‘saving pictures for the nation’. It would probably cost someone in Wales no more to see the pictures in the Guggenheim than to go to Edinburgh by train and spend the night in an expensive hotel.

I am wary of mentioning the other aspect of them being in Scotland that gives me doubts, but I will. People who yesterday were lauding the achievements of ‘their’ athletes (who were in fact competing for Team GB) now say the pictures must be saved for ‘the nation’, which means the whole of the UK is expected to pay, while the Scots have free prescriptions, no university fees and higher spending per head.

And I would be more comfortable about laying out £100m if I thought we were doing our best to preserve British arts (who else can be expected to do it?): not just in painting but literature, drama, sculpture, music (the National Lottery money goes largely towards funding productions of Italian Opera). A country's first (not only, but first) duty is to promote its own culture.

I don’t want to sound grumpy but I think we should let the Duke of Sutherland sell his pictures, tax him to the full (this must be a capital gain if ever I saw one), and spend that money on something more manageable. Like a museum of the British arts. If we’ve got any left after that we could buy the Raphael he also wants to flog off.

Unless Alex Salmond wants to chip in from the Scottish taxpayer.

28 August, 2008

The Greatest Polymath

I am always interested in those ‘On this day..’ bits in the newspaper, which turn the reader’s mind this way and that according to the date. Today is the anniversary of Martin Luther King’s ‘I have a dream’ speech (1963); it is the anniversary of the death of St Augustine (430) and of the birth of Johann Wolfgang von Goethe in 1749.

Goethe has always been a bit of a hero of mine, perhaps the most extraordinary polymath who ever lived. Many people know him for his Faust (his own take on a traditional tale, with Faust being redeemed at the end and raised up to Heaven, unlike in Marlowe’s) which was the inspiration for works by Schumann, Gounod, Liszt, Wagner and Mahler. But his literary works included novels, plays, romantic poetry, eroticism and much else. He was the leader of the Sturm und Drang movement, but later went to Italy to clear his head (as so many people do) and collaborated with Schiller in the Weimar Classicist Movement.

But Goethe was also a lawyer, statesman (he was effectively Prime Minister of Weimar), soldier (he fought at the battle of Valmy and the siege of Mainz), natural scientist (his work on plant morphology influenced Darwin, he was the first to prove that the intermaxillary bone existed in all mammals, the mineral goethite is named after him and his Theory of Colour, translated into English, influenced Turner’s painting), and heroic lover, it now appears, of both sexes.

He died aged 82, probably exhausted.

The Bag Carrier

For those of you who don't read Guido's blog (www.order-order.com) I have to repeat this, which was sent to him

"I was one of the lucky BA passengers who got to fly home with the Olympians - an incredible honour. We were thrown off first and after we walked down the steps and past the paparazzi I couldn't believe my eyes when I saw the Prime Minister standing in the doorway shaking hands with my fellow normal pasengers. I walked up to him and shook his hand and asked where we went to collect the bags. He was dumbfounded and the wifey minister* standing beside him with the t-shirt said rudely to me "that is the Prime Minister, ask someone inside". It wasn't as though I asked him to carry my bags. She is one ugly cow."

*Tessa Jowell

Bliss. thanks, Guido


On reflection it seems quite obvious how the mushroom soup leaked. The pressure in the cabin was much lower than the pressure in the soup container.

Over the years cabin pressures have been gradually reduced without consulting the passengers, and who can doubt that in these days of high fuel prices they will be reduced even further (and perhaps already have been).

I would happily pay extra for a flight which had proper cabin pressure; the enhanced comfort and lower soup risk mitigating the environmental effects.

Incidentally a pilot once told me that the way they used to check the fuselage of the plane for leaks was to search for brown stains, where the nicotine had escaped. Alas now that smoking is not allowed....

Bad luck

With all the hassle travellers have to suffer these days, and no liquids to be carried, the experience of passengers on a Ryan Air flight can only be described as extreme bad luck.

It appears that someone had snuck into the plane some mushroom soup which then dripped from an overhead locker on to the head of a passenger. Bad enough, you might think (although not as bad as tomato) but the soup triggered an allergic reaction, forcing the plane to land early.

This seems rather like the mobile phones controversy - supposed to put the plane at risk but no one really believed they did. If there really is a danger from liquids carried on a flight (that they might be explosive, and be detonated by a suicide bomber in the plane) then some official's negligence has put a plane load of passengers at risk. If not....

This seems like a golden opportunity for Health'n'Safety. Was the soup labelled appropriately (may cause allergic reaction above 30,000 ft); how did it leak out?; should 'at soup-risk' passengers be made to wear hats?; should planes fly empty because the whole thing is too damn risky?

We should be told.

26 August, 2008

US voting

Today is the 88th anniversary of the passing of the 19th Amendment, which gave American women the right to vote.

Whether the Democrats will regret not choosing one as presidential candidate remains to be seen.

25 August, 2008

Mrs Thatcher

I don't know about anyone else but I am disgusted by the news that Mrs Thatcher's daughter Carol is trying to make money out of describing her mother's dementia.

Margaret Thatcher was a controversial figure and there is now an element of giggling humour, as there was with Ronald Reagan, that the symptoms stretch further back.

I think anyone is entitled to a simple public statement that they are suffering from the disease, and that their family and intimates keep their own counsel.

US Elections

There is much talk of whether Joseph Biden was the right choice for Obama's running mate. It seems to me wrong: he is a figure from the past, whereas Obama portrays himself as the future; he is a pro-choice catholic, which will not deliver much of the catholic vote; he has been derided for copying a speech by Neil Kinnock (himself a politician derided in the UK); his experience of foreign affairs goes against Obama's statement that he didn't need experience because it was all a matter of judgment.

Many are saying he should have chosen Hillary. But apart from the problem that she and her husband would overshadow any campaign, I wonder if she was sounded out about the job and refused: she wants to be president and for that Obama has to lose (if he were re-elected, 2016 would be too late for Hillary).

An interesting difference between US and UK politics is the importance of the party. Hillary, in carrying on long after she had lost, has been disloyal to her party to an extent that would earn her censure in the UK. At the same time the party, if it were the UK, would have seen her as more likely to beat McCain and somehow wangled her selection. Now there is no senior figure in the party to keep her under control until November (her husband won't).

These are difficult times for Obama. I hope his nerves are steady.

24 August, 2008

Maxwell Brown

Even after 16 years it is hard to forget the late Robert Maxwell. Casting around, desperate for money, he stole the pension funds of his employees and, for whatever good he may have done in his lifetime, he is now remembered as a figure of hate. The comparison with Gordon Brown is irresistible.

Brown has of course already raided the pension funds of the country, leaving millions hard up in their old age, but we now learn that in his desperation for money he has raided the lottery funds as well. Read John Major in today's Sunday Telegraph.

I would remark in passing that history students of the future will discuss how one man, thoroughly nice but far from clever and another, thoroughly clever but far from nice, could both have made such appalling Prime Ministers.

Team Brown

The British Olympic Association has confirmed that the name Team GB came from the oh-so-British Marzena Bogdanowicz. No one seems to have given a stuff whether we got the name of our country right, as long as it sounded good.

Except, perhaps, Gordon Brown. The man has plans for a football team in the 2012 Olympics taken from England, Scotland, Wales and N. Ireland for Team GB - and then he corrected himself with one of those sickening, artificial smiles, and said 'Team UK'.

The business about the football seems to be a mistake, though. The Scots are horrified at the idea and there is a by-election coming up in Fife.

20 August, 2008

Prague Spring

While Russian soldiers seem reluctant to leave Georgia, we might remember the horror of 40 years ago. It was on the night of 20th August, 1968, that Soviet forces entered Czechoslovakia, ending the period known as the ‘Prague Spring’.

Appointed First Secretary in January 1968, Alexander Dubcek introduced a wave of reforms, principally economic decentralisation and free speech (and incidentally the division of the country into two, the only one of his reforms permitted to last).

It was too much for the Soviets of the Brezhnev era who sent the troops in, removed all liberals from power and limited the right to political comment to those with ‘full political trust’. Dubcek urged his people not to resist and only 72 were killed but it is thought that some 300,000 emigrated. Dubcek is reported to have said ‘they can kill the flowers but they can’t stop the spring.’

On 19th January, 1969 Jan Palak set himself on fire in Wenceslas Square in protest against the suppression of free speech.

This was the first international political event that I can remember and it left its mark on me and perhaps on a whole generation.

19 August, 2008

Team Bogdanowicz

Today’s Guardian offers a solution to why our Olympics contenders are called Team GB rather than Team UK (there are three from N.Ireland).

‘Mainly because it is considerably easier on the tongue than "the Great Britain Olympics Team", according to the woman behind the brand, Marzena Bogdanowicz. "I think I had the idea in 1996 or 1997," says the BOA's then director of marketing. "I went to the games in 1996 and the logo at the time was just the lion and the rings, but we weren't strong enough as a brand to just be a lion and the rings. So coming back I wanted to find something that was less of a mouthful, and also had that team feel. We looked at the options and came up with Team GB’.

I wonder if they did look at all the options. So there you have it: Team GB sounded good, it was decided by a woman who sounds, dare I say it, not frightfully British.

I’ll ask ‘Team GB’ if they can confirm this.

17 August, 2008

Team UK

I got a reply from Team GB – the UK Olympics organisation – saying that since 1996 only athletes from sovereign states, such as Jamaica, can compete under their own names so athletes from Gibraltar, the Falkland Islands and so on would have to compete under our name. So changing the name from Team GB to Team UK would not solve the problem. The spokesman – Lauren Sanderson – did not explain how they got the name of the country wrong in the first place. It is the UK which is the internationally recognised sovereign state.

The reason I make a fuss about this is that the difference between the UK and GB is Northern Ireland. GB suggests to foreigners that we have given up Northern Ireland to the Republic. Which we haven’t.

I have invited Team GB to say what they felt gave them the right to drop this diplomatic bombshell.

McCain - against the grain?

In Britain we tend to blame America for a lot of the less desirable change we see and I think most people regard the trivialisation of politics – looks, mannerisms, soundbites - as having inexorably reached us from across the Atlantic (although I wonder if Anthony Eden would have done so well without his good looks).

But I was watching a video of John McCain the other day and he seems to belie this. He seemed short (surely a disqualifier in itself), jowly, old and with a curious high pitched whine of a voice with which he increasingly seems to make out of touch remarks and allow his temper to get the better of him.

Look at Obama, by contrast. Male model good looks, a soaring manly voice, oratory straight out of Churchill and Martin Luther King.

So why isn’t Obama miles ahead in the polls?

Personally I don’t think it is a racial thing; all but a small proportion of Americans seem to have passed that point and probably most of those would be Republicans anyway. True it might take an exceptional black candidate to make the White House but Obama looks exceptional.

And I don’t think it is the economy. The reason I would hesitate to vote for him is his espousal of protectionism, policy which would make the poor poorer. But I think a large proportion of Americans believe in a bit of protectionism.

Is Obama a busted flush? Did he soar so high like Icarus that his fall is as dramatic as his rise? It was inevitable that as the campaign progressed that he would look more human, more normal, but are the voters not prepared to pardon this?

After a murky start with Condoleezza Rice’s presence in Georgia before the recent upheavals, George Bush has looked good: standing up to Russia with rhetoric and with support for Georgia. This will have helped McCain’s campaign. It only needs another such crisis for security and foreign policy – his long suits – to take centre stage.

15 August, 2008

The Eurozone

Just as we were beginning to feel that America was past the worst, the Eurozone, almost unnoticed, appears to be slipping into recession. In the three months to June the euro-economy contracted by 0.2%. Normally a loosening of monetary restraints would have eased the position but inflation is running at 4% on average (well over 5% in Spain) and lower interest rates are not possible.

Europe’s banks are in an unhealthy state, commodity and food prices are high. Italy is currently paying 0.6% more on its borrowings than Germany. Several countries, but not all, are experiencing collapsing property prices.

This will be the first test of the eurozone since its founding. People will have to tighten their belts, and the Central Bank in Frankfurt looks like an easy scapegoat. The political test will be how evenly the pain is shared.


The 15th August has been a holiday here since Roman times, when it was a harvest festival. In Italy it is called Ferragosto which from Latin means August holiday. It coincides with the Roman Catholic Feast of the Assumption and is the day when you can guarantee no one in Italy is working, most people taking a holiday either the two weeks before or the two weeks after (or, quite often, the whole month).

It is notorious for sudden unexpected stormy weather and looking at the sky this morning Ferragosto 2008 will live up to its reputation.

14 August, 2008

North and South

I remember a friend at the UN telling me that some countries – Western Sahara was the example he used – are deemed unviable. This means that they can never earn enough to support themselves and industry will never go there because the lack of population and infrastructure would make any project uneconomic. I found it a terribly depressing thought – a people simply doomed to failure and welfare dependency.

Now, we learn, the same is true of some British cities. Billions have been poured in to northern regions over the years, and the think tank Policy Exchange says, rightly in my view, that it has all been wasted. Liverpool, we are assured by Edwina Currie in the Mail, has lost half its inhabitants in the last half century (normally one wouldn’t believe a word Mrs Currie wrote but in this case she is correct and actually the article is quite good).

The Policy Exchange document draw the rather odd conclusion that the people of northern cities should migrate south, to find work. David Cameron has, correctly, rejected this noisily (he wants the odd MP north of the Midlands at the next general election) but I hope it makes him think a bit. Bribing the north has been going on for years. I remember the car plants at Speke and in Scotland, Grey Areas, Development Areas, Economic Areas, all kinds of things. The new term is Regional Development Areas and since 1999 they have blown £15bn – largely for nothing. The income disparity between north and south has grown.

But if the northern towns are not to be emptied of their brightest and best, leaving an unemployable, welfare dependent rump, we have to do something, and something which does not involve chucking money at the problem. The Taxpayers’ Alliance suggests a reduction in small business tax rates, but whilst this would be welcome I am not sure how much of an incentive it would be. Regional tax holidays tend to attract weaker companies which depart as soon as the holiday runs out.

I think local solutions are the answer to local problems and these northern towns would benefit from localisation of decision making, beginning with directly elected mayors who have control of the business rates. The electorate would soon begin to vote for new thinking, realising, as the Labour Party does not, that the old thinking hasn’t done them any good.

12 August, 2008

Let him stay

There is a thoughtful piece by David Owen in the Independent saying there ought to be a method of getting rid of the Prime Minister on political grounds between elections.

It ignores the fact that not everyone wants him to go. Her Majesty's Opposition, to name but one.

The Tories should introduce a motion 'This house deplores recent attacks on the Prime Minister and believes he should stay in office until the next general election'.

If would be interesting to see who voted for it.

10 August, 2008


I should say in advance that my prediction for the US Presidential race was that it would be between Giuliani and Clinton. I hesitated therefore to suggest that John Edwards was a likely running mate for Obama and indeed he has fallen at the first morality fence, admitting to an affair (some say fathering a child) while his wife was suffering from cancer, and I should have thought this might well disqualify him.

Here then are my predictions for the Olympics:

Most medals: China
Most disappointed: USA
Best losers: Team GB (or the United Kingdom as we sometimes call it)
Best uniforms: Italy
Most TV cameras and personnel: The BBC
Biggest political losers from a successful games: Tibet
Biggest financial losers : UK
Most popular sport: beach volleyball

In this regard I should say that I once owned some broadcast rights to a minor sport and someone who could be regarded a in a position to know told me that if I wanted it to become an Olympic sport he could give me a telephone number to call and someone would mention a sum of money and give details of a bank account to deposit it in.

Now who is funding synchronised swimming?

The Olympics

I shall not be watching the Olympics and so will see none of the advertisements which have gone to fund them. This is as a protest against China's rule in Tibet.

As regards the UK team I wonder why they are not called just that. Instead, despite three members being from Northern Ireland, it is called Team GB (N. Ireland is not, of course, in Great Britain). Why?

I asked that question of the Olympics organisation and they have been unable to tell me.

South Ossetia

The South Ossetia problem is one we need to keep an eye on. South Ossetia is at the northern central part of Georgia which lies on the eastern edge of the Black Sea.

When the Soviet Union existed the region was a semi independent homeland. The people claim kinship with the North Ossetians who remain part of the Russian Federation whereas the world recognises South Ossetia as being part of Georgia, an independent state since 1991. South Ossetia has itself been de facto an independent State for some years now although we, and of course the Georgians, do not recognise it.

Georgia’s first leader was Edvard Shevardnadze, formerly Yeltsin’s prime minister, but since 2004 it has been Mikheil Saakashvili, regarded by many as a bit of a hothead. On 8th August, presumably hoping world leaders would be at the Olympic Games and not notice, he ordered a military clampdown in S. Ossetia, whose people make their living largely from smuggling. Russia reacted with tanks and planes, saying it was defending its people, and suddenly we have what has been described as a Rhineland moment.

The importance for the West is that a major oil pipeline runs from Baku on the Caspian through Georgia and into Turkey an thence the Mediterranean. This is one of the few which is not controlled by Russia. It runs about 35 miles south of the Georgian capital Tbilisi which has been bombed and some say the Russian planes have targeted the pipeline. The destruction of the pipeline would greatly increase western dependence on Russian energy.

There is no single guilty party here; everyone has overreacted, but we shall have to defend that pipeline. The UN has had a couple of attempts to come up with a form of words but failed. The question is, how do we defend our interests without a war?

07 August, 2008

The Default Position

I believe we need to ask tough questions about the instant-hit hedonism celebrated by the modern men's magazines targeted at younger males. Titles such as Nuts and Zoo paint a picture of women as permanently, lasciviously, uncomplicatedly available. The images they use and project reinforce a very narrow conception of beauty and a shallow approach towards women.’

The above was said in a speech by Michael Gove, former Times journalist now Shadow Education minister. I saw an advance notice of his speech and, not quite trusting my own astonishment, held back from saying anything. I am glad to say it has not been well received. Here is blogger Mr Eugenides:

Men do not like tits because they buy Zoo. Men buy Zoo because they like tits.We can demonstrate this by means of a simple thought experiment. Zoo was launched in 2004. Hands up if you ever thought about tits before then. Yes, one hand will do.’

But it is something else which concerns me. All politicians make mistakes and say something they subsequently wish they hadn’t: they have ‘off’ moments. In these off moments they revert to type, to a default position, a classic case being that of the late Nicholas Ridley losing it about Europe in an interview with the Spectator.

The point I wanted to make about Mr Gove is that if this is his default position, making the content of perfectly legal publications a matter for politics, thinking it a politician’s job to ‘ask tough questions’ about publications he doesn’t like, then Mr Cameron needs to replace him, now. He is not suited to high office.

If that’s not the type of person he is, he should come out and explain himself.

03 August, 2008

The State of Italy

Italy has had more written about it in the European and American press this year than at any time since 1994 (the year of the ‘mani pulite’ clear out of the old political order and emergence of Berlusconi as a political figure). The reason is Berlusconi’s third government, elected in April with a working majority: the foreign media cannot believe that a modern democracy would elect such a person. The reason they have is that the Italians, dangerously late and with great reluctance, have come to realise that there must be change. There was not a wide choice of reformers on offer; in fact the choice was the possibility of reform (no more than that) from Berlusconi or more of the same from the Left, and looked at in these terms the choice was encouraging. But no more than encouraging.

Berlusconi identified two urgent problems for his first months in government: Alitalia and Naples. The reason for these, as opposed to other pressing problems is that they are visible: they are part of Italy’s shop window on the world and Berlusconi needs Italy to feel good about itself, to present a bella figura. Alitalia is grossly overmanned, too much the child of the trade unions, heavily in debt and with outdated planes and support equipment. It is a throwback to the 1960s when a flag carrier was considered important and it was normal for major industries to be in public ownership. By rights it ought simply to be closed down and sold for the value of its landing slots, but now is not the time for such a gesture. A plan emerged at the end of last month which will involve 5,000 redundancies and some new money. It is not enough but it will close out the problem for a while.

Napes is the capital of the South, one of Italy’s great cities, and the streets were filled with garbage. Tourism had dropped to zero and the foreign papers and TV news were filled with dreadful pictures of rotting garbage, rats and filth. Again, a problem which was too visible. The cause had been organised crime selling space in the landfill sites to companies in the north and indeed from abroad. There was no room for the people’s garbage. The streets have now largely been cleaned, with the aid of the military. The underlying malaise, Italy’s tolerance of the excesses of the mafia (Sicily), n’drangheta (Calabria) the Camorra (Naples) and their offshoots and imitators, has not.

But a wide range of problems threaten Italy which are perhaps less visible.

The power of the unions is as great, and as malevolent, as it was in Britain in the 1970s. Job protection legislation, introduced to appease them, has led to a stagnant labour market. It is almost impossible to fire someone, so no one is taken on. Foreign firms operating in Italy have found that it is cheaper in the long run to import workers from their home country and put them up in hotels than employ Italians. Labour competitiveness has declined 15% against Germany since the introduction of the euro, due to the unions forcing through pay rises without productivity increases. Foreign direct investment into Italy is virtually zero.

The Italian public sector is one of the worst examples imaginable of failed enterprise. Hundreds of thousands of people, probably millions, moonlight to another job, simply by clocking in and leaving their jacket on the chair. This entry and exit through the turnpike is visible, but Italians’ strong sense of omertà prevents anything from being done about it. No one criticises the gross inefficiency and gross overmanning because it could be your cousin threatened with redundancy. 70% of jobs in all Italy, not just the public sector, are on ‘raccomandazione’ – recommendation from a friend or relative.

Immigration is a new problem for Italy, unlike in Britain with its Commonwealth and the entry of workers and their families since the 1960s. There was, until last year or so, effectively no immigration policy – traditionally Italy has suffered a net exodus. But with easy access from North Africa and the Balkans, and a long unguardable coastline, the peninsula has suddenly found itself with a massive increase in immigrant population (from, by UK standards, a fairly low base). And the Italians have begun to realise that these immigrants are culturally different. The rise in petty and occasionally violent crime has shocked the nation and, worse, threatened organised crime with competition on its very doorstep. The camps are being emptied by a bizarre alliance of the Camorra and the Carabinieri while the world looks on and whispers about the 1930s. This will eventually sort itself out, as it has in Britain (Commonwealth immigration) and Germany (Italians and Turks) but will take time.

Italy is still in the throws of shaking off the post war settlement which has served it so badly. Established parties were (and are) subsidised by the state. Television channels, with heavy subsidies, were shared between political parties (it is a myth that Berlusconi controls the State broadcaster: realising it could never be impartial the Italians made it multi-partial). Newspapers are subsidised by the State. From his morning paper to his evening game show the State is in the Italian’s face, although he often doesn’t see it. Politics is everywhere. His local Comune may be communist, lavishly spending money levied by a centre-right government (local taxes are very low) and begging for more. Above the Comune are the 110 Provinces, and above those the 20 regions, each with its own layers of government, police force etc. It is crying out for reform.

The problems above largely tell the story of Italy’s economic position. The huge, sluggard public sector costs a fortune to maintain; almost farcical over-regulation strangles competitiveness; productive industry in the north subsidises the unproductive south, these subsidies are creamed off by organised crime which keeps the people of the south quiet, loyal and poor. Growth is the lowest in the eurozone. Italy’s debt costs €70bn a year in interest and despite being in the euro it has to pay more an half a percent above what the Germans pay. This spread is widening.

Berlusconi has recently announced a package of expenditure cuts, as an alternative to tax increases while the economy suffers in the difficult worldwide trading climate. This is a welcome development but it makes, as far as one can tell, no inroads into the pre-existing problem. In the previous election both parties were bribing the voter with expenditure, and the Italians have not yet acquired the taste for hair shirts.

So what can be done, if massive Thatcher-style reforms are not politically possible? One suggestion has been for Italy to withdraw, perhaps temporarily, from the euro. It could allow the New Lira to decline against the euro (it would be hard to stop it), giving a boost to Italian business and devaluing the debt.

Against this are three points:
- First, the nature of the goods Italy produces tends more to the quality/fashion end of the spectrum than the basics – Ferrari rather than FIAT, and these goods are less price elastic(you don’t sell many more Ferraris by dropping the price 20%)
- Second, there would be an inflation rush as the currency devalued
- Third, it is a one-off measure. What happens next?

However, proponents of the strategy point to the boost given to the UK economy by Britain’s exit from the exchange rate mechanism in 1992 with sterling’s accompanying 20% decline. The difference of course is that post-Thatcher Britain had deregulated and reformed its Labour market. A boost to business via a more competitive exchange rate went straight to employment and growth.

Should Italy leave the euro? Only with a series of strict reforms to make sure it wasn’t just another devaluation. Will it? Berlusconi is the only person who could take such a step and, in the face of a worldwide downturn, he just might. An S precedes the number on Italian euro notes. The German ones begin with X.

Unlike most commentators I am cautiously optimistic about Berlusconi. He has the mandate for change, the capability of blue skies thinking and, perhaps most important, the desire to cement his legacy. If his last government was spent keeping him out of prison, this one might have the time to do something for Italy.

02 August, 2008

Staple Government

There is a report in the Spectator that Gordon Brown has regularly thrown his stapler at people who have brought him bad news and recently, in a fit of rage, stapled his own hand.

What, in Heaven's name, is he doing with a stapler? It's not just that he doesn't appear rational enough to be trusted with one, it's that he's not a filing clerk, he's the Prime Minister. He should be running the country, not doing a junior secretary's job.

01 August, 2008

A fine fiddle

The BBC has been fined £400,000 for fiddling phone-in shows. In a typical example a member of staff posed as the winner, and people phoning in on premium rate lines had no chance of winning.

And what, may I ask, is the point of this? The viewer or listener is fiddled, and then because the BBC is funded by the viewers and listeners has to pay the fine for his being cheated.

Ofcom, another body paid for by the taxpayer/viewer/listener, said that the BBC ‘had put in place compliance training for its entire staff, created a competition code of conduct, developed additional guidance on competitions and launched a new in-house centre of expertise for telephony’

How many people were sacked, for cheating the customers, and how many of these fraudsters reported to the police (obtaining a pecuniary advantage by deception is still a crime, I think)?

No, go on, you guess.