Thursday, March 26, 2009

The Man from Peru

Dan Hannan seems to have become viral. For the uninitiated this means he has acquired a protein coat around a small bundle of DNA and cannot reproduce outside the host organism. He seems to have infected the entire internet. He was born in Peru and is a member of the European Parliament, two attributes that would normally ensure a lifetime of impenetrable obscurity. But he delivered a remarkably fluent speech, telling Gordon Brown to his face that he is an economic cynic or illiterate, take your pick. This has made him a hero of the Drudge Report, Fox News and Rush Limbaugh and a probable Tory leader who will take the party back to the right once they tire of nice lefty Cameron. What is interesting about the speech for the Americans is that it suggested to the Republicans a form of right-wing rhetoric that gets them off the Bushist hook. Basically, the neocons didn't care about the economy. Cheney said the deficit doesn't matter and, as a result it expanded massively even as, for the benefit of thicker voters, the party kept talking about small government and tax cuts. The evident absurdity of this made it hard to base any political reconstruction on the same rhetoric - of course, they tried but also had to chuck in loads of cultural and moral stuff and, as a result, they ended up sounding as mad as Limbaugh or Palin. Anyway, nobody was - or is - sure that big government spending is not, in fact, the way out of the recession. There's no economic law that says the right or left has any special wisdom on this matter. What Hannan did was clear out the moral and cultural garbage and say it is, indeed, the economy, stupid. He did it with the kind of clean-cut manner that the Americans love and a fluency and articulacy which they seldom hear from their own politicians. Not bad for a Peruvian and absolutely terrible for Brown.


  1. Of course there was that nice Mr Michael Bentine, who was also of Peruvian stock.........

    It is the economy, stupid, and we are all being busily led by the nose to believe that deflation is the problem. The fact is that deflation is non existent; inflation is back and the US and UK governments are going to utilise it to pay off their otherwise unsustainable debts.

    Liam Halligan - an unspinnable journalist when he was with the FT and Channel 4 and a damn fine economist - skewers it well in today's Telegraph. The Great Deflation Scare of 2009 is...

    "... largely a myth – an alibi for wildly expansionary fiscal and monetary policy concocted by Western governments and their media lackeys.

    After all, where is deflation? Data released last week put annual US core inflation at no less than 4pc. So why is the Fed doing this, following the Bank of England's lead? Because the real solution – forcing banks to face the music, while rescheduling massive private and public debts – is too politically frightening for our so-called leaders to contemplate.

    A decision has been made, but not announced: we'll inflate away our debts instead"


  2. There's also that nice Hernando de Soto, one of the great humanitarian economists of our time.

    On US budget deficits, one of the most hilarious or disturbing graphs I've ever seen, four months ago, gives smiling mug shots of the last nine US presidents against the deficit they presided over as % GDP. What on earth could the Republican-leaning Heritage Foundation say on top of that? Not much. Very, very weird. Maybe Obama wants to make up single-handedly for all that Democrat parsimony since 1960.

    But the UK doesn't as far as I know have anyone making our own dismal facts and figures as beautifully visible as the Heritage Foundation does here. We desperately need that. The economic illiteracy is bound to go top to bottom otherwise.

  3. I like his argument. At a time when jobs are being slashed left, right and centre he concludes that government has no right to create public sector jobs. After all, it's only working/middle class people who will loose out, not people like Hannan.
    And no doubt he'd have no truck with those loosing their jobs receiving an extortionate sixty pounds a week.

  4. No doubt Hannan would also want the unemployed incarcerated in concentration camps. It's not what he's ever said of course, I'm just going on the Chris method of arriving at the truth about the new man. So much quicker than having to bother with the boring details. He sounds vaguely right wing. So, make that he wants to gas the unemployed. Where does this kind of reasoning end?

    Where this guy has broken the mold, worldwide, is not in the treatment of the poor. It is in the treatment of the super-rich. He's the only vaguely prominent politico since Ron Paul to say very clearly that none of the banks should have been bailed out. He adds the crucial point that the left assumes these guys are all for free trade. Of course they're not. They much prefer the monopoly situation, the government-backed cartel.

    And that's what Hitler was into and that's the kind of person that backed him. Don't mistake that for a brave and obviously gifted man delivering an essential message to our current, bloated establishment elite.

  5. What was interesting watching this on TV in the Canaries was that German, Spanish, French TV all reported it...except the BBC.

  6. "He sounds vaguely right wing"

    No, he just sounds insane. Letting the banks go to
    the wall shows an extreme disregard for society - purely for the sake of an ideology. If that happened the whole country could easily descend into madness - no government would risk that.
    I've read enough output from free marketeers to know they hate state handouts, even during a recession - Ron Paul's views on social security are outright zany on this front.

  7. And you have presumably studied the New Zealand banking crisis, which Mr Hannan quite rightly mentions to Fox News (at about 2 minutes to go)? One case a government did the unthinkable and told the banks it was their problem, go and sort it out themselves, they weren't getting any taxpayer money. The poor things took a whole three years to do so. I believe bonuses were much reduced over that time. The horror, the horror. You've been fooled by very well-oiled propaganda I think.

    I'm not bringing in all Ron Paul's views, I simply referred to the fact that he has always, on principle, opposed any bailout. Just as he has never voted for an increase in government expenditure on anything, as far as I know - certainly not anything that goes against the US constitution. At least you know where you stand with Dr Paul. You don't have to agree with him on Iraq, say, to take his point on bailouts. And to notice how few are those prepared to stand with him. Yet opinion polls throughout the West shows vast percentages who take the same point of view. Funny that, it being our taxes and all.

    Calling people insane is a great way to avoid the hard detail, just like attributing pathological views to them which they've never in fact held. Keep up the good work.

  8. The Beeb finally covered the Hannan story - for a full 2 minute 50 seconds on the Daily Politics. After a report on the blogscape and a lively continuation of the row between Guido and Draper in which Andrew Neil rightly raised the issue of comment culture mentioned here in January

  9. We bailed out the banks in order to give China its money back. This was not a act of economics or finance it is a act of politics.

    Under normal circumstances in insolvency you restructure the debt. By allowing Lemming Bros to fail the US spooked the Chinese resulting in the near dollar collapse on Sept18 and the 2 page Tarp bill being brought to congress on the Friday night the 19th.

    China holds all the aces. To see why read, China Shakes The World: The Rise of a Hungry Nation by James Kynge

  10. "You've been fooled by very well-oiled propaganda I think"

    Come off it. You can't compare this crisis to New Zealand's. Nearly every bank on the planet is infected, if you let them fail you risk bringing the whole system down. Mass unemployment, rioting, violence, the far-right having a field day at the polls etc - do you really think it's worth the risk?

  11. Chris, before I answer I have a question for you. Is it possible for government action to make a situation like the Credit Crunch worse?