Diary

The poverty of party conference season

Labour’s embattled troops head down to Brighton at the end of September for what’s likely to be their final party conference in government. By all accounts it’ll be a sparse affair, as the lobbyists and hacks flock instead to see Cameron & co at their pre-election victory jamboree in Manchester one week later. The conferences are a valuable money-spinner for cash-strapped parties, and Labour will be especially badly hit as attendance falls. Moreover, an unlikely new foe has emerged to spoil their fundraising fun still further: cabinet secretary, Gus O’Donnell.

Last year there was a stink over the pots of public money that ended up in party coffers via the conferences, funnelled in as government quangos (or “non-departmental public bodies,” NDPBs) coughed up for pricey exhibition stands or sponsored swanky parties. Labour’s regional development agencies were particular offenders, splashing out upwards of £250,000. So in January O’Donnell fired off a private letter to Whitehall bosses, stating that “there will be no good reason for NDPBs to attend party conference in the majority of cases” and that any quango seeking to disobey the new diktat would need explicit written permission. With “premium complete stands” at Labour’s jamboree currently on sale for £12,750 a pop, expect a few empty spots by the seaside this September.

William Hague and the blue-eyed Bosnian

This August saw some hard-hitting rhetoric from the usually silent shadow foreign secretary William Hague on the danger of the Balkans being “slowly pulled apart” by new ethnic tensions. What explains so habitually restrained a statesman’s newly authoritative tone? Likely it’s the influence of Arminka Helic, Hague’s blue-eyed Bosnian Muslim émigré chief of staff, who some feel exerts rather too much influence on Hague’s public pronouncements. Case in point: in 2006, Hague rashly questioned whether the “bombardment of Hezbollah will result in military success for Israel”—much to the chagrin of Cameroon hawks—and it was Helic who took the flack. Further tension simmers in the background, with both Michael Gove and George Osborne reportedly keen on a harder edge to Tory thinking on the outside world, and defence spokesman Liam Fox endlessly demanding more money for the military. With open warfare likely in a future Tory government, should Helic issue another warning, this time about a political alliance slowly pulling itself apart rather closer to home?

Felix the cat joins an economics spat

Economist Paul Krugman and historian Niall Ferguson kicked off a fine row in May, locking horns in print and person over economic policy. The feud escalated as the two prickly academics sniped in the blogosphere, but seemed to have run out of steam—until a Ferguson op-ed in August began: “President Barack Obama reminds me of Felix the Cat. One of the best-loved cartoon characters of the 1920s, Felix was not only black. He was also very, very lucky.” Cue incredulous blogging from Krugman (“I cannot fathom the state of mind that led Ferguson to think this was a good way to introduce a column”) and an equally indignant reply from Ferguson (“So it’s racist to compare President Obama with Felix the Cat? Oh dear, the seemingly dead body of political correctness just twitched”). Ferguson even emailed esteemed Henry Louis Gates Jr on the cat’s racial significance, and dropped Krugman a line explaining that Gates had consulted other luminaries of African-American studies and duly confirmed that “none of us thought of Felix as black”—a revelation to which Krugman shot back: “For the record, I don’t think that Professor Ferguson is a racist. I think he’s a poseur.”

How a colostomy bag took the fringe by storm

Edinburgh’s fringe is famed as a showcase for witty youth, but the surprise hit this year was venerable agony aunt Virginia Ironside, chatting about the pleasures of being old and living with a colostomy bag. Her show tells of how she came out on the colostomy bag front in Saga magazine, whose editor replied: “Darling, you’ve got a bag; any shoes to go with it?” She also muses on the benefits of failing memory: “I’m jolly glad to forget the people I slept with. I’ve had enough sex to last a lifetime.” And Ironside admits that, where she used to enjoy writing rock columns and interviewing the Stones, now she prefers to birdwatch and take pleasure in her grandson. After all, “Grandchildren are the reward you get for not killing your children.”

Dan Brown: you couldn’t make him up

The literary event of this September is, of course, the publication of Dan Brown’s The Lost Symbol, with its inevitable film adaptation already in the works. Those seeking a more intellectual delight, however, may wish to turn to an interview with Umberto Eco that appeared in 2008 in the Paris Review. Here, the Italian master admits not only to an unexpected taste for Brown’s work, but to a rather more intimate literary relationship with the man himself. “Interviewer: Have you read The Da Vinci Code? Eco: Yes, I am guilty of that… Interviewer: That novel seems like a bizarre little offshoot of Foucault’s Pendulum. Eco: The author, Dan Brown, is a character from Foucault’s Pendulum! I invented him. He shares my characters’ fascinations—the world conspiracy of Rosicrucians, Masons, and Jesuits. The role of the Knights Templar. The hermetic secret. The principle that everything is connected. I suspect Dan Brown might not even exist.”
Time to shampoo away your flu

Who needs Tamiflu? While Britain frets over medication, the US Food and Drug Administration has targeted over 50 websites selling fraudulent products. Top of the list must be the Photon Genie, an “electro-medicine instrument” costing £1,800, whose vendor claims it deploys “life-nourishing photobiotic energy effectively delivered by deeply penetrating mega-frequency life-force energy waves.” The Vanguard Pharmaceutical Corporation, meanwhile, offers a flu-beating formula of traditional Chinese medicine and chemical extracts, called Swine Guard. And if that doesn’t make you feel safe there’s always “SilverCure Protection” anti-viral shampoo. Its website explains: “because the swine-flu virus is airborne it may settle on your hair, and then if you touch your hair and then touch your eyes, nose or mouth, you can contract the illness.” A perfect precaution in case of the flu becoming hair-borne.

Silly season takes on a furry, feathered edge

Inane curiosities invariably pad out the August papers—but this year there has been a curious consistency to the silliness: everything is about animals. We’ve had a commuting feline (“Pet cat catches the daily bus for four years”), a duck in sandals (“lame duck Lucky’s special shoe”), even a bald penguin in a wetsuit (which “puts him back in the swim of things”). Elsewhere, a squirrel accidentally popped its head into a holiday photograph in Canada, an Australian miniature pony went for a car ride and deadly algae killed a horse. But none could beat the Times’s mid-August scoop, when half of the front page was devoted to an image of Britain’s biggest carp above the somewhat baffling headline “Barclays defies curbs on City bonus culture.” Politicians take note: come back riding a miniature horse, and they’ll hold the front page.

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Why we must stop fearing inflation

Greenspan: one of the rentier class

According to Alan Greenspan in Friday’s Financial Times, the biggest threat to the world economy is a resurgence of inflation. That’s right. While the rest of us worry about ever-increasing unemployment, shrinking global GDP, declining trade, collapsing demand, Greenspan tells us the real nightmare is none of these, but instead the potential prospect of inflation—even though this year it will probably be under 2 per cent.

This should not surprise us. Throughout his career, it has been the interests of the financial sector that have most concerned the former Fed Chairman. And it is the rentier class that suffers most from inflation.

Indeed, it is a sign of their dominance that the rest of us, for whom inflation can actually be beneficial, have been conditioned to fear it. If you lend money, like banks and financiers, inflation means you are being paid in depreciated cash. But if you borrow money, as do most households and entrepreneurs, inflation is a subsidy that stimulates investment and demand. Inflation penalises lenders and benefits borrowers—and most of us, by the way, are net borrowers.

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Krugman speaks, the final act: “I was into Minsky before Minsky was cool.”

Hyman Minsky: an Iggy Pop for our times

“Most of what we have been doing in macro for the past 30 years has been spectacularly useless,” pronounced The Professor in his third and final lecture at the LSE last night, entitled: “The Night they Reread Minsky.” “If you’ve got a model where everyone is rational it would be hard to get the abrupt collapse of the world financial system,” he admitted.

Economics, everyone but economists knows, is bunk. The dominant neoclassical synthesis begins with absurd axioms (we are utterly rational, all knowing of past, present, and future, obsessively utility maximising) and from that derives a vision of the world that naturally has little to do with the one you and I make our livings in every day.  Glory—and tenure—no longer goes to the economist who best explains the actual workings of our economy but rather to the one who derives the most elegant mathematical models from those inaccurate axioms.  No wonder economists missed the plot.

Not all economists.  Hyman Minsky never won a Nobel prize, didn’t teach at Princeton, wasn’t a big name in the profession.  He was a bit of a cult figure (if Krugman is Springsteen, then Minsky is Iggy Pop) but when he died 13 years ago, few outside the post-Keynesian subculture knew his name.  No more.  Now he is quoted everywhere from Financial Times columns to Goldman Sachs reports to the “Talk of the Town” section of the New Yorker.  The reason: even though he is dead, he, more than anyone, predicted our financial disaster.

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Krugman speaks: part 1

Krugman: more popular than Springsteeen

My son says I’m a nerd. Maybe he’s right. When I heard that Paul Krugman, 2008 Nobel prize winner in economics, scourge of the Bush administration, op-ed writer for the New York Times, was giving three lectures at the LSE on our current financial crisis, I was thrilled. Krugman may not be the Cassandra of our economic debacle (that would be either Nouriel Roubini or the long dead Hyman Minsky) but his analysis remains head and shoulders above most academics—who still seem desperate to show that their failure to predict the popping bubble doesn’t prove the bankruptcy of orthodox theory.

I decide to go online the second tickets became available. Of course I don’t manage get to my computer until 12 minutes later and by then, all seats to all three nights are gone. Krugman proves to be a tougher ticket than Bruce Springsteen. I guess I’m not the only economics nerd in London. No worries, I think, I’ll get in on a press pass. I inveigle the editor of American Conservative (which for some reason, despite its right-wing name, seems happy to publish my musings on the perfidy of financiers) to request a press ticket. No go. No press tickets left. Even Prospect, who I tell I’ll blog for free if they get me in has no luck with the LSE press office. Somehow I sweet talk my way onto the reserve list and show up at 5pm, an hour and a half before The Professor is to speak, to try and worm my way in.

Already people are lined up. I ask Mahmud, a retired economics professor if he thought back in 2006 that the bubble would burst. He nods his head. He didn’t know when, of course, but he didn’t think the exuberance that Gordon Brown and Alan Greenspan had staked their reputations on would last forever. “You don’t need Keynes,” he tells me, “just common sense.”

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