Wednesday, July 27, 2011

Back to the 1930s

It's become a bit of a commonplace - at least on economics blogs - to compare the mess we're currently in to the Great Depression of the 1930s. There are good reasons for making the comparison. But what about the politics? Here and there people have alluded to the politics of the Depression and its contribution to the rise of Nazism and Fascism. Mostly though it is assumed that the consequences of prolonged economic crisis will be different.

I'm beginning to wonder if we can make that assumption. The events in Norway are scary enough, but far more terrifying are some of the reactions to them. In the US Glenn Beck likened the teenagers at the Labor Party summer camp to the Hitler Youth. OK, the man's now unemployed and needs publicity, but... In Italy, Vittorio Feltri, one of Berlusconi's longstanding attack dogs, accused the victims on Uloya island of being 'incapable' and 'selfish' in their inability to stop the killing.

Some moral line is being crossed here. The question is: how many others will follow the lead of these two crypto-fascists? In a healthy democracy, these people would never work again as journalists. But with powerful business interests behind them, who knows? Beck is probably finished, but Feltri will remain, polluting the Italian political environment, as long as his boss can hang on to power.

Thursday, July 21, 2011

Cameron resigns

OK, he hasn't. In fact, he probably won't resign over the phone-hacking affair. The reason for this is that although it is entirely implausible that he behaved properly in his hiring of Andy Coulson and his broader relationship with New International, it is probably impossible to prove that he lied to the House or breached the ministerial code in any flagrant way. The flood of resignations at NI and the Met has come close to engulfing him, but his sheer bravado in the Commons yesterday saw him through.

So the summer recess saves his bacon for the moment. However, he is rapidly using up his stock of political capital over this. Other clouds loom on the horizon, notably the stagnant economy and the risk of major financial turbulence originating in the Eurozone. Suddenly, the odds are this government may struggle to see out its five-year term.

Monday, July 11, 2011

A bad week for media tycoons

It's extraordinary that after decades of hijacking the democratic process by blackmail, bullying and bribery, Murdoch and Berlusconi are both on the brink of losing everything.

What does this mean, if anything?

It could be just a coincidence, but that seems far-fetched. More likely the crisis has opened up Pandora's boxes all over the place, by emboldening critics and undermining established systems of power and influence. We can only hope.

Berlusconi has been severely weakened by the sex scandal 'Rubygate', and now faces the impact of a bribery sentence that will cost me hundreds of millions of euros. More importantly, probably, the markets have now decided that Italy is the next eurozone pinata they can beat. How long can a weak and discredited government last under the pressure of the bond markets? Italy, let's remember, has the third largest sovereign debt in the world, and is far less credible than the other two (the US and Japan).

As for Murdoch, well, who expected that? He might yet recover, but he's also made a lot of enemies along the way and if they have any sense, they will try to finish him off before he can get back up. Full marks for Ed Miliband who has gone out on a limb and, so far, has come out winning.