Who's the chicken?

From: DonkeyHotey

The world waits with bated breath for an outcome of the ongoing fiscal cliff talks in Washington with much the same anticipation that accompanied the end of the Mayan calendar on December 21. As it happened the end of the world was not to be, and sadly, a grand bargain on how to tackle America’s sickly finances may not grace the news headlines either. There will in all probability be a last minute deal, a fudge of sorts that merely postpones a long-term solution to America’s burgeoning debt.

Back in 2011, the Obama administration came to blows with the Republicans on raising the debt ceiling for the US government and as part of the compromise that broke the impasse both parties agreed to point a gun to their foreheads to ensure a long-term solution was agreed on by the end of this year. This gun is the so-called fiscal cliff: a combination of draconian tax increases and spending cuts worth about 5% of GDP over a year that would kick in on January 2^nd and are likely to topple America’s fragile economy back into recession. No one in their right minds would contemplate rolling out such a harsh package at this stage of the American recovery, and indeed the whole world (American politicians included) assumed the fiscal cliff would be enough to ensure a deal is passed in Washington. The question now is what kind of deal.

Initially Mr Obama had pushed for a rise in tax rates for those earning over $250,000 a year, subsequently rising that threshold to $400,000. He has also agreed to change the way Social Security benefits are indexed to inflation and called for a two-year extension of the debt ceiling. For his part John Boehner, the Republican speaker of the House of Representatives, has also made some concessions. He had conceded that tax rates could rise for those earning over $1m a year and the revenue he is prepared to see gathered over ten years now stands at $1 trillion.  However the suicidal polarisation of US politics makes any reasonable deal unpalatable to one or both of the parties.

The concession to allow the Bush-era tax cuts to expire for those earning over $1m a year came under Mr Boehner’s Plan B, which still left a fiscal tightening of nearly 3% of GDP over a year. As it happens even this largely symbolic tax rise (the Americans affected by it number about 400,000, or 0.3% of tax filers) was anathema to the fiscal hawks in the G.O.P. and so they promptly proceeded to reject it.

The odds now seem to be in Mr Obama’s favour. Whilst a grand bargain which involves a package of spending cuts and tax rises worth at least 2% of GDP to stabilise the debt level is not likely to emerge from the last-ditch negotiations going on right now, the G.O.P. has manoeuvred itself into a corner. Mr Obama’s fall-back position involves a minimalist bill that would prevent an income tax rise on the middle class and extends vital unemployment insurance for Americans looking for a job. If Republicans voted against this for whatever ideological reasons, they would essentially be voting for a tax rise on ordinary Americans. Given that recent polls have found that 53% of Americans would blame the Republicans if the country toppled over the cliff, it is a powerful incentive for them to compromise to avoid becoming the subject of public opprobrium and being eternally branded as the party of the rich as the whole country reels back into recession.

Unfortunately the deadlock is not just about economics. November’s election painted a dreary picture in terms of the polarisation of the country. The number of states that was decided marginally, i.e. by five percentage points or less, decreased from six to four, meaning that incumbents have safer seats and can ignore the needs of the country in favour of their constituents. More worryingly however is the fact that these seats may be safe from the rival party, but, especially for the Republicans, they dramatically increase the battles at the primaries. To vote for a tax rise now would be for many Republicans analogous to committing political suicide. Of course there are moderates within the G.O.P., and both their political futures and the passing of a deal on the fiscal cliff rest on them being able to form a large enough block to give them political cover. The ideological polarisation within the G.O.P. therefore matches that of the entire country, and the repercussions of such a divide are crucial not just for the fiscal cliff but for the other items on Obama’s agenda, such as climate change and gun control.

Whatever final deal emerges then, it will most probably not be a definitive one for the deficit but it will give us a clue as to the turn American politics will be taking. As ever, it’s not just the economy, stupid.

License to kill

From: Alan Cleaver

“A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.” When Thomas Jefferson signed the Second Amendment which was adopted into law in 1791, he probably did not envisage these fateful words underpinning a government policy that made the massacre of twenty children possible on December 14.

The Sandy Hook carnage, which saw a twenty-year old man armed with a semi-automatic rifle with an extended magazine and two semi-automatic handguns enter an elementary school and go on a ten-minute rampage, leaving twenty children (mostly six and seven year olds) and six teachers dead, has largely receded from the headlines. President Obama made his fourth visit to a community rocked by a mass shooting, proffering heartfelt sympathy and a promise to make progress on gun control, only to return to Washington to haggle with obdurate Republicans over the impending fiscal cliff. Of course, to conflate these two issues would be wrong: the debt has to be dealt with now whilst gun control can wait, for a bit. Hopes were raised that Obama’s would not be empty promises by the combination of the sheer scale of indignation at the massacre that swept the country and the fact that Obama does not have to worry about re-election anymore. The public outrage will fade, as is only natural, but Obama’s promise to act within weeks still stands. Unfortunately, so do the seemingly insurmountable obstacles to enacting stricter gun control.

Let’s go back to Jefferson and the Second Amendment. Upon first reading, that sentence, despite its questionable grammatical integrity, does not unequivocally guarantee the right of American individuals to carry arms. In fact, what it actually says and what was upheld by the courts for over a hundred years was that state militias had a right to bear arms, not individuals. Then came the landmark District of Columbia v. Heller 2008 judgement which decided the second clause trumped the first on militias and that therefore the federal government could not ban handguns. As Jeffrey Toobin, writing on the New Yorker, helpfully points out, in the twenty-first century Justice Antonin Scalia could not enshrine the right of individuals to bear the latest military machinery, however ring-fencing handguns proved a suitable political compromise because “handguns are the most popular weapon chosen by Americans for self-defence in the home, and a complete prohibition of their use is invalid.” What this shows is that the precise meaning of the Second Amendment is not set in stone, or paper for that matter. Just because a constitution is written does not mean it cannot evolve like an unwritten one as the values of a country change. However it does mean that hawks in the National Rifle Association (N.R.A.) can cling to words written in a completely outdated context to wage a veritable political campaign. Richard Feldman, from the Independent Firearms Owners Association, said that it would be unconstitutional for the government to “come and get the guns” because the “Supreme Court has already ruled on this issue.” Except the Supreme Court has changed its mind over the decades based on the tides in public opinion, so the case is anything but closed.

So we can now move from these rather arcane constitutional debates to the guns themselves. In 2011 the total of firearm homicides in the US was 11,101. To put this figure into perspective, consider that in 2008-2009, 39 people died from crimes involving firearms in England and Wales, compared to 12,000 in the US in 2008. Even if we adjust for population, that of England and Wales is about one-sixth of America’s, leaving the number staggeringly high. More people are killed by firearms every year than the total number of US military casualties in Iraq and Afghanistan since 2001. And finally, 31 people die every day from firearm homicides. Is it really plausible to argue that the circulation of 300m guns in America has no connection whatsoever to these statistics? If it is not about the guns, but about the people, then does America really have so many more mentally deranged mass murderers than other countries? Even this muddies the waters of the debate, because mass shootings are only one type of murder adding to the firearm death toll; therefore we must ask whether Americans at large have some innate murderous proclivity that accounts for these figures. Feldman goes on to state that the problem with guns involves “clearly mentally deranged individuals [...] we have a failed mental health system now in this country, and if we don't put resources into getting at these people before they commit such horrible acts we're not going to solve this problem.” Well that clears it up. I am sure we can all agree that the reason Britain, Canada and Australia, to name but a few, have such drastically lower firearm death rates is because their mental health systems are infinitely better than America’s. One would surely have to be mentally deranged to posit a correlation between the number of guns and the number of murders.

Modern studies of criminal violence have shown that crime, of all kinds, is to some extent opportunistic. As Adam Gopnik writes on the New Yorker, “even madmen need opportunities to display their madness, and behave in different ways depending on the possibilities at hand.” That is why, on the same day that Adam Lanza unleashed his madness on defenceless children, a fellow madman in China who burst into a classroom “only” managed to sever a few ears and fingers. Had he had a gun in his hands, would he not have used it instead of his measly knife? Or perhaps Min Yongjun had been to see his therapist earlier who had successfully dissuaded him from using his semi-automatic rifle. It is one thing to argue for tightening gun controls to prevent people with mental health issues getting their hands on them given the many loopholes in existing US law; it is quite another to claim that guns are simply not the problem.

Opponents of stricter gun control seem to employ the mutual deterrence line of reasoning: if only everyone had guns, then no one would use them. Just like nuclear weapons. If only the teachers at Sandy Hook had been armed with guns themselves the massacre might have been prevented, or in any case stopped midway. Either Adam Lanza, knowing that all teachers carry guns in an elementary school, would have abandoned his crazy plans (but this undermines the argument that putting up barriers – like taking away guns - to the execution of crimes would have no deterrent effect on the mentally deranged) or a teacher would have stood up against this lone madman in some sort of heroic counterattack.

The words of Wayne LaPierre, executive vice-president of the N.R.A., at a recent press conference would be anathema in any country not at war. He said that people “driven by demons” along with a “much larger, more lethal criminal class,” were among Americans and that the only way to stop them was with guns—more specifically with “armed security in every school” and a “National Model School Shield Program” to be developed by the N.R.A. Quite aside from his derogatory depiction of the mentally ill as some sort of subversive cancer in American society, it is paradoxical to claim that the only way Americans can live peacefully is by arming them to the teeth. And once we have armed all the teachers to enable them to protect their class from madmen with murderous inclinations, who is going to ensure that the teachers do not turn on their own students? Must we arm the children too? No, of course not, we should simply focus on improving the method for selecting teachers and ensuring that people with mental health problems never make it to the classroom.

At the end of the day, however, the most shocking fact is that a majority of Americans support the status quo. Even Beth Nimmo, the mother of a Columbine shooting victim, does not support a ban on all guns and thinks that it “is getting pretty grim that anybody can walk on a campus and there is no protection for those who are in the school themselves.” Never mind working towards a solution that would render such protection unnecessary in the first place. A ban on guns would only be the first step in America; the harder task would be removing the 300m guns already in circulation, but that is no reason for inaction. In the words of Bertolt Brecht, “unhappy is the land that needs a hero.”

Sandy enters the political fray

From: david_shankbone

Ever heard Harold Wilson's saying that "a week is a long time in politics"? Back in September we were all clamouring over Mitt Romney's lame-brained handling of the attack on the American embassy in Libya which cost the Ambassador his life and how it would affect his campaign. Today, in the aftermath of Hurricane Sandy's destructive battering of America's east coast, this incident is all but forgotten. In fact, it had probably already been buried in voters' minds long before Hurricane Sandy decided to take the reins of the presidential campaign.

Faced with such devastation, both contenders have put a halt to their respective campaigns, with President Obama cancelling campaign events to stay at the White House and Mitt Romney converting an Ohio rally into a storm relief event. However, with less than a week left until election day, politics cannot be swept away as it was with the Libyan incident. Granted, as President, Obama has a firm duty to manage the disaster in the best way possible regardless of the impending election, but that does not mean that the political spotlights will not be blaring as he does his job. One cannot naively presume that Obama simply feels no added pressure from the election to nail the emergency response. He may not want to appear as if he is overtly politicising the disaster, but he is most certainly aware that a good show of leadership, sympathy and competence is fundamentally political, and thus inextricably forms part of his campaign. As Mark Mardell from the BBC points out, Hurricane Sandy "puts the spotlight on President Obama as a leader in a time of crisis – both in terms of deeds and words." In effect, appearing to put politics aside is a fundamentally strategic political act; it is about being a president, and thus a political leader of a country. As such, failure to rise to the occasion will have political costs but it also presents a great opportunity to make a last stand in a neck-and-neck race. In fact, according to The Economist/YouGov poll 36% of respondents would describe Obama as “strong” and Romney follows close behind with 34%. So it is all the more important for Obama to rise up to the challenge, especially since the percentage of Americans who view him as a strong and decisive leader has steadily decreased since 2009, when it stood at 73% according to a Gallup poll.Sure, Obama did say that “I am not worried at this point on the impact on the election. I’m worried about the impact on families and our first responders. The election will take care of itself next week.” Nonetheless, it cannot be denied that natural disasters have political repercussions, particularly for presidents who have to take the lead.

For Mitt Romney there is less to be gained (and lost) as the media will not be interested in any speech he makes and he is not faced with one of the greatest challenges of his career. In fact, Hurricane Sandy has pushed him into the sidelines and putting politics aside is a less "political" act for him than it is for Obama. Whereas Romney's show of good taste by turning his rally into a relief event is only the minimum to be expected from him, it will not really score him any political points. Because of this he will resume campaigning today. Obama, on the other hand, will not resume his campaign but the fundamental difference is that he does not need to. Every decision taken with regards to the disaster relief will feed into his campaign whether he likes it or not. His last act before the election will simply be to do his job.

The EU must live up to its vision

It has been a while since the EU hit the front page on a happy note. Yet the decision to award the Nobel Peace Prize to the EU was as unexpected as it was puzzling. In fact, the decision follows the trend started when the committee awarded it to US President Barack Obama whilst his country was embroiled in two wars, but at least the US is not mired in an existential crisis. The beleaguered EU was praised for contributing to the advancement of peace and reconciliation, democracy and human rights in Europe over six decades. The EU, said the Nobel committee, has helped transform Europe “from a continent of war to a continent of peace.”

The EU must be given its due. War between France and Germany is now unthinkable, and the EU became a model to aspire to for Eastern European countries emerging from their Communist regimes. Moreover, it helped countries such as Spain, Portugal and Greece to make the transition from dictatorship to democracy. So far so good.

Since the eruption of the euro crisis over two years ago, however, the EU has failed time and time again to demonstrate the leadership and visionary decision-making that it ought to have to be worthy of this prize. The crisis engulfing the eurozone threatens not just the 17 countries within it, but the whole European integration project as has been reiterated by none other than the German Chancellor Angela Merkel. But let us leave aside the economics and focus on the politics for an instant.

 Instead of seeking to promote a sense of unity and reignite that spark that will make our eyes glaze over with delight for an “ever close union”, the discourse in Europe is smeered by acrimonious references to fiscal sinners and saints. Anti-Germans aver that Germany has reaped all the benefits of the euro at the expense of its southern neighbours and is refusing to pay its share of the deal by stymieing efforts at creating a banking union or recapitalising troubled banks. The creditors retort that they successfully implemented tough structural reforms to improve their competitiveness whilst southerners squandered their cheap money left, right and centre. Not only, but they are also the ones with the deep pockets for the bailout funds, so unless these feckless southerners want to see their lifeline cut they ought to stop yakking on about Germany needing to boost its domestic demand and get on with some reforms themselves. This effect of this damaging talk should not be underestimated, especially considering that Europe desperately needs to garner some popular support in order to progress with integration where it is needed most. Given that austerity measures are presented as the price for continued eurozone membership, short-sighted European leaders are saving face whilst not only stalling the integration process but unravelling it.

 Moreover, the EU’s appalling handling of the crisis has abetted the rise of populist and extremist parties such as the Greece’s neo-Nazi Golden Dawn party which feeds on the hated troika of technocrats making repeated visits to ensure the shattered country is strangling its economy just a little more. Italian newspaper Il Giornale ran a front page that denounced a German “Fourth Reich” whilst Greek protesters greeted Angela Merkel in Nazi uniforms when she visited Athens.

Centrifugal forces have also strengthened in the EU as a result of the crisis. Britain has slowly but steadily been distancing itself from the union and populist parties everywhere are jumping on the euroscepticism bandwagon to capitalise on voter discontent and waggle their accusatory fingers at the EU. The economic pain wrought by relentless austerity measures, which are doing nothing to stop Greek GDP plunging by a whopping 5% a year, is accompanied by increasing social tensions as citizens take to the streets in an often violent fashion. In Spain the anti-austerity protests have revived secessionist feelings in Catalonia which have done nothing to assuage markets on Spain’s precarious financial position. Catalonia, in fact, accounts for a fifth of the country’s economy. With unemployment in both Greece and Spain over 25%, the potential for social unrest is high.

This is not the track record of an organisation that continues to advance peace and democracy. The awarding of the Nobel Peace Prize is therefore a boon which European leaders have rightly grabbed on to (admittedly with a degree of desperation) but it is a stark reminder of the gargantuan task they have ahead of them. National politicians need to stop belittling the EU whenever it suits their political strategies and work harder to present the austerity measures not only as a steep price for continued membership of the eurozone, but as part of a more long-term process of rectifying a country’s finances which needed to be done anyways (that is, if national politicians want to continue with such draconian austerity measures in the face of their lukewarm success). If Angela Merkel decides to show the requisite leadership for battling the flames engulfing the continent and actually act on the “inspiration” the Nobel Peace Prize gave her to press ahead with closer integration, then she, and others, will need to work collectively to close the democratic deficit of the EU when this risks fuelling existing divisions. At this stage of rising popular resentment with the EU and dangerous nationalism, further integration is unthinkable if the EU’s legitimacy is not enhanced first. The awarding of the Nobel Peace Prize was merely the starting gun.

Slipping, slipping...

From: DonkeyHotey

It seems that the old idiom “it never rains but it pours” has never been truer for Mitt Romney than it was last week. No sooner had his half-baked attempt to score political points from the assassination of the United States’ ambassador to Libya spectacularly backfired than some grainy footage in which he disparaged almost half of the American electorate surfaced. To make matters even worse, his campaign’s promise to unveil a new strategy with more details on Romney’s plans (they had been blatantly absent hitherto) was not to be, as his gaffes left him standing awkwardly in the media limelight.

Romney was caught on film at a fund-raising dinner in Florida in May saying that the 47% of Americans who do not pay income tax “believe that they are the victims” and could never be persuaded to “take personal responsibility and care for their lives.” As the cherry on top he added that they “believe they are entitled to health care, to food, to housing, to you name it...and they will vote for this president no matter what.” In a sense, it is true that he has fewer voters to convince given the increasingly polarised electorate. As Republican Don Fierce explained, “The number of people we’re trying to win over is very small...that’s what’s different from 1980 or other campaigns in the past — there’s such a small number that are there to move.” Notwithstanding polarised politics, writing off half the electorate in a rather supercilious manner as ineffectual spongers is probably not the best way to go about convincing that small, undecided chunk.

As The Economist notes, the frozen party loyalties in American presidential elections do not mean that elite actors cannot influence the fringe sections of the partisan electorate, and this year it looks like capturing just those swing voters will be key to winning. Obama will benefit from a steady support base of Hispanics, African-Americans, and university-educated women in addition to changing demographics. What were previously traditional swing states, such as Nevada, Colorado, Virginia and North Carolina, have now become Democrat strongholds thanks to the rising Hispanic share of the vote. 

Whilst gaffes are a staple feature of campaigns and a rite of passage for most politicians in the spotlight, Romney risks alienating part of his more moderate elite by pandering to the strident, yet stale, ideas of his conservative base. Having tacked back to the centre of the political spectrum after the primary he has dispelled his image as one of the more moderate Republicans only to reveal that he is clumsily out of touch with the electorate as well as fickle when it comes to his positions on important issues. He seems to have gambled everything on the economy, which is indeed the overriding issue of November’s election, but has failed to capitalise on the general disenchantment by offering a specific plan for revitalising it and creating those elusive jobs. Moreover, his lack of a plan seems to signal that he has staked everything on the economic situation being so dismal that it irreversibly tarnishes Obama’s record so as to make his re-election inconceivable. It is quite a hazard to rely on external events, rather than one’s own capacities, to attain leadership of a country.

It is also hard to see how Romney will be able to surmount the high level of public admiration for Obama which is impervious to depressing economic data and stems rather from his historic significance as the first black president. The high degree of public sympathy for Obama arising from those voters who do believe he was handed an exceptionally bad hand of cards from his predecessor George W. Bush will also play in his favour, unless, say, Romney is banking on the United States being hit by an economic cataclysm on the scale of Lehman Brothers between now and November.

Romney’s vacillating positions highlight his lack of an overarching and most importantly, vaguely inspiring message. He churns out the standard Republican spiel on the economy and foreign policy (actually he’s said precious little in this regard) but has failed to translate it into a clear, coherent and specific message about how he is going to turn the status quo around. Even if we were to overlook the absence of a vision, we could not find Romney compensating for this with his personality. In fact, he just comes across as being a bit awkward, flailing about like a goldfish thrown out of its bowl. He does not have Obama’s penchant for rhetoric and has pretty much handed his opponents a joker card with his background, which was always going to be a magnet for flak in tough economic times. This is not to say that his career at Bain Capital is worthy of condemnation per se, but rather that any other candidate would seek to mitigate its potentially negative legacy and turn it around to highlight the leadership, business know-how and management qualities that Romney demonstrated there. It goes without saying that telling a bunch of fellow millionaires that almost half the American electorate is a hopeless case is, to put it lightly, not wise.

The presidential race is still not set in stone, and given how fast things have turned in the recent weeks it is perfectly possible for them to turn back the other way. It would be rash to write off Mitt Romney just yet. But if he keeps fudging along as he has until now he will quickly have finished digging his own electoral grave.

Oh Mitt...

Few people must envy the Republican campaign after its spectacular Libyan debacle. What could and should have been an opportunity for America's squabbling politicians to continue their truce to mark the anniversary of 9/11 following the tragic killing of Chris Stevens, the US Ambassador to Libya, and three other Americans on Tuesday night has turned into a cringe-worthy display of Romney's crass irreverence. 

It all began when protesters gathered outside the US embassies in Cairo and Benghazi to protest an anti-Islam film produced by an American, Sam Bacile, that depicts the Prophet Muhammed as a womanizer, child-molester and impostor. Previously the US Embassy in Cairo had posted a statement online condemning "the continuing efforts by misguided individuals to hurt the religious feelings of Muslims – as we condemn efforts to offend believers of all religions". When the news that a US official had been killed trickled out in the evening, the US Secretary of State Hillary Clinton issued a solemn statement condemning "in the strongest terms the attack on our mission in Benghazi today…Some have sought to justify this vicious behaviour as a response to inflammatory material posted on the Internet. The United States deplores any intentional effort to denigrate the religious beliefs of others…But let me be clear: There is never any justification for violent acts of this kind." 

These statements certainly did not warrant Romney's violent outburst before the end of the 9/11 truce as he branded the Obama administration's response "disgraceful" for sympathising with "those who waged the attacks" before condemning them. Not only was Romney's rash statement a blistering example of political opportunism, as he proved unable to put on any façade of dignified statesmanship, but it was also an embarrassing episode of shoddy fact-checking on the part of his campaign. The statement by the US Embassy in Cairo had, after all, being released before the attacks actually started as it was trying to mollify the rapidly rising tempers. The fact that Romney was undeterred in his political attacks on Wednesday morning, when it was clear that the Ambassador and three other officials had been killed, and in fact chose to stoke the flames further by arranging a press conference, only served to highlight his flimsy grasp of the situation. 

“The statement that came from the Administration was a statement which is akin to apology. And I think was a severe miscalculation.” Alas, dear Mitt, the severe miscalculation was yours alone. Most of his fellow Republicans, including his running mate Paul Ryan, steered clear of partisan bickering in their messages on the attack. The contrast between the Obama administration’s sombre tone and Romney’s bluster could not be any more blatant. Given that Romney was considered, until now at least, one of the most moderate Republican candidates, this episode is likely to tarnish his image. After two years of gruelling partisan strife in Congress, Romney ought to have perceived that Americans would not want every news story concerning America turned into a political campaigning instrument. 

Not only did he miss an opportunity to start a foreign policy debate, but he decidedly squandered it. After being criticised for not mentioning the war in Afghanistan in his speech to last month’s Republican convention, Romney could have rectified this omission and shown that he is mildly competent when it comes to foreign policy matters. Instead his ineptitude stood out like a sore thumb. 

He also failed to grasp the mood of the American public, who is disillusioned with just about everything yet nothing quite disheartens it so much as the sluggish pace of the economy and the steady stream of lukewarm news on the job situation.  It is a well-known fact that the overriding issue that will shape the outcome of November’s election is the economy, and that it is also the Obama administration’s Achilles’ heel. So quite why Romney blindly pounced on the attacks in Libya is frankly puzzling. What is certain is that his ill-conceived exploit has spectacularly boomeranged.

Reaching for the stars – House of Lords reform

The Houses of Parliament, by:  Rajan Manickavasagam

“If a second chamber dissents from the first, it is mischievous, if it agrees, it is superfluous.” Thus spoke the Abbé Sieyès on the essentially contested topic of bicameralism. Looking at the debate that has been raging (at least within the walls of Westminster) for the past hundred years over reform of Britain’s upper chamber, the House of Lords, and the various stunted attempts to reform this anachronistic appendage of British democracy, an outsider would be shocked at how complicated and politically toxic the issue has become. 

Having held together surprisingly well in the tough economic and political conditions, Britain’s coalition government stumbled earlier this month over a rather esoteric piece of legislation which rouses the tempers only of politicians and academics, leaving the general population pleasantly indifferent. Nick Clegg, the Lib Dem leader, is eager to push through reform of the upper chamber as part of his project of constitutional reform (which suffered a major setback with the AV referendum) so as to be able to point to an achievement when the time comes for the next general election. David Cameron, the Prime Minister, was happy to let Nick Clegg have his prize until it proved a major contention point with his own MPs, 91 of whom threatened to vote against the programme motion on July 10th which would have set a timetable for debate on the bill, thus stalling the whole process. As ever, the issue of House of Lords reform has not failed to get the blood boiling.

The bill that has caused cracks in the coalition would render the House of Lords predominantly elected, with 360 members elected in three staggered elections and the remaining 90 appointed. On the face of it the rationale for reforming the membership of a second chamber which currently consists of about 825 peers, 700 of whom are appointed through a process which gives the Prime Minister huge powers of patronage, is clear: the people who shape the laws of a democracy should be elected. The fact that 92 hereditary peers still sit on the plush red benches of the second chamber is a blemish on British democracy. Furthermore, Britain sits alongside countries such as Antigua, Lesotho, Yemen, Jordan and Russia in having an appointed chamber. It is hardly dignifying company. Supporters of its present composition retort that its appointed nature enables it to have a higher level of expertise and a less partisan nature, fostering a more edifying debate. However, very often its most eminent members do not attend, or in any case do not vote, as the Crossbenchers’ low voting record shows.

But is it really as simple as that? Members are elected, ergo they have the necessary legitimacy to make laws. As Shami Chakrabarti rightly pointed out, “if it is just about having elections every few years, the people of Burma and Zimbabwe need be very relieved indeed that they too live in thriving democracies.” After all, an independent (and unelected) judiciary is considered legitimate enough to protect our rights and freedoms. The House of Lords, with its rather archaic present membership, is still considered fairly legitimate by the public. Less than half the respondents in a survey conducted in 2007 thought that having some members elected by the public was very important for its legitimacy. On the other hand, making decisions in accordance with public opinion, detailed legislative scrutiny and having a trustworthy appointments process ranked higher. Thus it is time we questioned the exclusive and automatic relationship between legitimacy and popular election. It is undoubted that democratic election confers some form of legitimacy, but that does not mean that an unelected body is a priori illegitimate.

This is not an exercise in slinging mud on democracy and elected upper house members, rather it is intended to foster a more informed debate on the nature reform should take. The argument that those who shape the laws should be elected is too simplistic to be the driving force behind major constitutional change. The House of Lords has worked very well thus far, often acting as a ballast against unpopular legislation (such as control orders in the Prevention of Terrorism Bill in 2005) and acting in accordance with public opinion despite being in no way accountable to the public. Reform should be entirely contingent on the kind of upper chamber Britain wants to see. If it is to remain predominantly a revising and scrutinising chamber, as it has been hitherto, then an appointed membership (without prime ministerial patronage) that limits partisan bickering and favours expertise would be more appropriate. Its public legitimacy would be bolstered by the removal of the hereditaries and the expanded role for the independent Appointments Commission.

If, on the other hand, we want a much stronger chamber that keeps the government in check then an elected membership would indeed be suitable. This is because, with its present composition, the House of Lords has often refrained from challenging the government as much as its powers (which are significant) allow for fear of being reprimanded for obstructing the will of the people’s chamber. An elected second chamber would fundamentally change the balance of power between the two chambers and strengthen Parliament as a whole against the government. Given the largely untrammelled control of the executive over the Commons, this is something to be welcomed. The Parliament Acts, which enshrine in law the supremacy of the Commons, will not necessarily become obsolete should the Lords become elected as they can be amended and possibly strengthened. The fact that the government is still drawn from the lower chamber will continue to ensure it ultimately gets the final word. As Roger Hazell has said, the experience of the United States with gridlock has unduly coloured the debate in Britain.

Coming back to the indefatigable Abbé Sieyès, it is time Britain decided what kind of second chamber it really needs, rather than continually accusing the House of Lords of either being superfluous or mischievous. The scaremongering on the dangers of gridlock is unfounded, as is sanctimonious talk of those who seem to believe that elected representatives are all ignoramuses. Reform has waited a century already; it can wait a little longer so that a mature debate can be instigated.

The market value of our clicks: Google is not a "free" service!

That Google (or any other search engine) values the information we spontaneously give whenever we perform a search is something that is pretty obvious. But how much is this information really worth? Well, today I found out what the market value is of each and every "click" we make when we are online. 

Today I received an "invitation" via Facebook to open an account on "blurum", an internet-based company that gives you points for letting them know every internet search that you make, every web page that you visit, what your favorite web sites are etc. Basically they collect information about our interests and habits and create a sellable profile of people. In return, you get points, and after collecting a certain amount of points you can spend them on prizes that get sent to you for free. Each prize costs a certain amount of points.

For every web page visited, for every search made or for every favorite web site added to your profile you get 1 point. 

Therefore by dividing the cost of the prizes (they range from an Apple macbook air to Omega watch to household goods) by the number of points necessary to win them one can determine the market value of our clicks. The result: about 0,02 Euros per click! 

... But that's not actually what our clicks are worth.... 0,02 Euros is only what we, as users of blurum, get for them. In fact that company is obviously still making a profit, even after paying the users 2 cents a click. A realistic guess is that the clicks are worth about 4/5 cents each!

By going in "history" on my web browser I can see that I visit every day in average 216 web pages, which makes my daily activity on the net worth about 9.7 Euros!

So as a result one could say that we are paying to use google ~9 Euros a day!

The stolen jobs no one wants. Redefining expectations

As I write, a 54 year old Romanian lady is cleaning my garden (a tiny piece of dry earth where no grass grows and only fallen leaves lay). She came to Italy 18 years ago, alongside the italian man she had fallen in love with, full of hope to find a good employment with her Ph.D. in engineering. As it happened the man died before they managed to put together the necessary paperwork to get married.
At the time Romania was not part of the EU and her possibilities for any type of legal work where slim to say the least.
I met her back in 1998, when she started being our housekeeper and eventually became my beloved nanny. Since then she has regularly worked in different Italian households with a wage of about 7/8 euros/hour, with which she had to pay her own pension, taxes, etc. (she had become legal after starting to work for us).
The point of this article, though, is not the sad story of a remarkably honest, sweet, hardworking and humble woman, but rather our (wealthy, western-society people) tendency to identify part of the labor market crisis with the extensive presence of an immigrant and/or illegal workforce in our countries. So the question that I think we should honestly address to ourselves is: would we really be willing to take up the jobs of these immigrant/illegal workers, or are we only using them as scapegoats?

At a time of high unemployment, many Americans are convinced that these aliens take American jobs. As a test, in the summer of 2010 the United Farm Workers (UFW), launched a campaign called "Take Our Jobs" (http://www.takeourjobs.org/) inviting willing Americans to work in the fields. In the following three months 3m people visited takeourjob.org, but 40% of the responses were hate mail, says Maria Machuca, UFW's spokesperson (as reported by "The Economist").
Only 8,600 people expressed an interest in working in the fields, says Ms Machuca. But they made demands that seem bizarre to farmworkers, such as high pay, health and pension benefits, relocation allowances and other things associated with normal American jobs. In late September only seven (I MEAN 7!!!!) American applicants in the "Take Our Jobs" campaign were actually picking crops.
So the point was proven: most Americans did not want those jobs!
Coming back to my Romanian lady: my friends and I often are worried about our employment perspectives but it never occurs to us to actually "downsize" and contemplate a "regular" job. The type of job that is commonplace for the vast majority of people in the planet whilst we, by some type of "natural birth right" seem to be exempted from them.
How many of us complain about the labor market crisis and still pay people to clean our homes, iron our clothes, baby-sit our siblings or relatives, take care of our elderly?
So are "our" jobs (which is difficult to define anyway in this time of mobility) really getting stolen? Is there really a crisis in the labor market or is it mainly that our expectations about what a professional position should be like are not realistic?
Why is it that a Romanian women, with a Ph.D. can clean homes for 20 years without needing therapy or attempting suicide and our young generation cannot even contemplate the idea?

Where is the growth?

Prime Minister Manmohan Singh

In the debt-ridden eurozone, an annual growth rate of 5.3% would be a cherished prize for politicians. Not so for the Bric giant India, as it is the lowest rate in seven years and is symptomatic of a deeper malaise affecting Indian politics. Add to this high inflation, growing fiscal and trade deficits and negative investment sentiments and India’s economy no longer appears so rosy.

India’s economic situation came to the fore after the ratings agency Standard and Poor’s (S&P) warned it that it may strip the country of its investment grade status, unprecedented among the Bric group which also includes China, Brazil and Russia. The report, entitled “Will India Be The First Bric Fallen Angel?” blamed the division of roles between the “powerful” Congress party president Sonia Gandhi and the “unelected” Prime Minister Manmohan Singh as the principal reason for the sickly state of the economy. The deficient political system leads to “political roadblocks to economic policymaking” which have stalled the necessary reforms, such as the Goods and Services Tax and one facilitating foreign direct investment (FDI). The agency continued saying that the outlook would not be so bleak for the Asian giant if it cut energy subsidies, which eat at its budget deficit, and raised petroleum prices.

"If things remain the way they are, in terms of policy decisions, investments and sentiments, I would go to the extent that the [growth] figure may be 3%," said a senior economist with a leading business association, echoing the doubts of Indian economists over S&P’s estimate of 5% growth for 2012-13. The low growth is worsened by high inflation, with food inflation at double-digit levels and wholesale price inflation at 7%. Furthermore, the government has systematically failed to tame the fiscal deficit it ran up in order to cushion the effects of the global financial crisis, fuelling irresponsible spending. The fiscal deficit, which stood at 5.9% of GDP in 2011-12, could rise further because of the sluggish growth, lower-than-estimated government revenues and higher expenditure on welfare schemes and energy subsidies. Just as worryingly, the trade deficit went up by $185 billion in 2011-12, as imports rose more than exports. The ailing economy and dithering politicians have thus led to a drop in the business confidence in India. Many firms in the domestic private sector delayed or postponed plans to invest in expansion, further contributing to the sluggish recovery. Certain tax provisions in the 2012 Budget have also put a dampener on FDI inflows.

One government official, giving his explanation of the slowdown, claims that the state machine reached a paralysis from mid-2010, when the public revelations of graft left the government in “an effective state of siege”, such that it was unable to pass reforms or tackle problems such as the shortage of electricity. Reforms are further stymied by the lacklustre performance of the government, which only tends to pursue reforms that are acceptable to its partners and which do not require it to bang heads together. As such it has gone ahead with the easier bits of infrastructure development, such as roads, whilst sidelining more contentious projects such as the power sector, which presents problems throughout the supply chain.

As the former governor of India’s central bank, Bimal Jalan, said, “you can import as much oil as you want, you can pay for it because your reserves are high, and your exports are doing reasonably well even though they may not have done so well in one or two quarters. Your current account deficit is higher than you expected, but still we can afford it, there is no great problem. So what is it that's lacking and that we don't have?” Once again the arrow points towards politics, as India lacks a mature, bipartisan political consensus on the future of its economy. This lack of a political vision is compounded by the marginalisation of India’s main political parties, the ruling Congress and the opposition Bharatiya Janata Party (BJP), who are losing support to regional parties. Mr Singh’s strategy of reforming by stealth has had the harmful effect of not fostering a popular consensus around the need for reform, such that the government faces endless protests when trying to proceed with its program. Congress’s hands are further tied by the electoral timetable before the general elections in 2014, which make it even more loath to take risks.

Global economic crisis aside, India’s recent slowdown seems firmly rooted in its broken politics. Unless it can usher in change at the top, which for too long has seen the beleaguered Mr Singh fudging along, or garner the necessary public support for reform which would propel it to tackle the red tape and widespread graft, India seems set on a path of sluggish growth for years to come. Perhaps not a Bric Fallen Angel, but not a rising Asian giant either.

Biting the bullet

Spain's Prime Minister: Mariano Rajoy
By: European People's Party - EPP

“You have the Greek model, or the Irish model. You can either go kicking or screaming, or you can bite the bullet, like people have done in Ireland”. Thus Gayle Allard, an economist from Spain’s IE Business School. Judging by Spain’s latest budget, it seems the centre-right government headed by Mariano Rajoy is firmly determined to follow the Irish model.

On March 30^th the Spanish government announced what was the most austere budget since Franco’s death in 1975. In an attempt to save €27bn this year, public sector salaries will be frozen, ministries will face budget cuts of up to 17%, income tax will rise by 1.9% and electricity and gas bills will rise by 7% and 5%, respectively. Unemployment benefit will be frozen and pensions will be indexed to inflation. As a palliative for consumers, VAT will stay at its current 18%. Following massive protests across Spain, which turned violent in Barcelona, the budget minister Cristobal Montoro was careful to ensure that most of the savings would come from higher corporate taxes, a fiscal amnesty in return for a 10% fee and public sector cuts.

The draconian budget follows negotiations with the European Union last month during which Spain agreed to reduce its deficit from 8.5% to 5.3% of GDP in 2012. This figure was a compromise on Spain’s earlier announcement in March that it would reduce the deficit to 5.8%, a long way from the 4.4% previously agreed with the EU. Blaming the previous Socialist government, the current administration justified this unilateral announcement with its discovery that the country’s finances were more rickety than it had expected.

A lot of commentators have expressed doubts about the feasibility of the budget cuts. One worry is that Spain might fall into a downward spiral of spending cuts, recession, unemployment and falling tax revenues, given that the economy is already in recession and predicted to shrink by 2% this year before any savings are made. Moreover, unemployment already stands at 23%, rising to over 50% for young people. Given that the troublesome regional governments were largely responsible for Spain overshooting its deficit target of 6% last year by 2.5 percentage points, the latest budget is at risk if they fail to cut down on their spending.

On the other hand Spain is anxious to step out of limelight and quash any concerns about it needing a bailout, especially as bond yields rose almost a full percentage point since the start of March. Should Spain prove incapable of reining in its spending and raising revenue, interest rates could well rise to unsustainable levels. Mr Rajoy has a brief window of opportunity to push through his programme as exports in January were 3.9% higher than a year earlier and a weaker recession in Europe ought to buoy the upward trend. Spain’s public debt is also small by European standards, something that ought to give it some respite.

Spain’s budget is thus a gamble between self-perpetuating recession and slow growth. One can only hope that it pays off.

Is Europe’s problem German strength or German weakness?

Angela Merkel once told the French President: "Nicolas, you will have to get used to the fact that I am slow". As the rest of Europe soon learned, Merkel is not prone to exaggeration. Uncertainty, prevarication and finger-pointing have dominated Europe’s ham-fisted approach to the crisis engulfing it.

The conflagration in the eurozone has profound implications for the wider European Union since significant political capital was invested in the creation of the single currency. Much of the European integration project is now staked on its success. Merkel’s prescient remark that "if the euro fails, then Europe will fail", is, again, no overstatement.

Initially limited to Greece, the crisis could have been contained with swift action to prevent a disorderly default and contagion to other rickety European neighbours. Alas, it took several months of fraught negotiations and market jitters to approve the first rescue package in May 2010, forever undermining the markets’ confidence in the eurozone’s crisis resolution mechanisms. What crisis resolution mechanisms, one may ask. Indeed, the "no bail-out" clause was firmly enshrined in the Maastricht Treaty in 1992 and no lender of last resort was ever designated, a role that has slowly fallen to the European Central Bank (ECB). However the monetary financing of debt is anathema to German policy-makers, who argue that that the burden of adjustment should fall on the eurozone members who pursued a spendthrift fiscal policy. Germany has consistently rejected any notion that it should address its own internal imbalances, such as its excessive current account surplus and low domestic consumption, as a means of resolving the crisis. "Economically, there is a perception that exporting is not a very bad thing as long as Germany isn’t doing it", said Steffen Kampter, parliamentary secretary to Germany’s minister of finance.

He has a point. Since reunification Germany clamped down on wages so that unit labour costs fell by an annual average of 1.4% from 2000-08, a significantly higher rate than America and other European neighbours. Thanks to its sound economic policies Germany’s share of exports in its GDP gained 25 percentage points from 1993 to 2008. It is easy to see why Germans are loath to see their country’s surplus lambasted as a source of imbalance within the eurozone. "If one is more competitive than others, then others have to become more competitive", continues Kampeter.

Germany’s success, however, owes much to the bedevilled single currency. Its exports became cheaper than they would have been under its treasured D-Mark as the euro reflected Europe’s competitiveness, not just Germany’s. The European Commission has estimated that the euro was around 10-12 percent undervalued for Germany in the first quarter of 2009. Furthermore, almost half of Germany’s exports go to its eurozone neighbours. Germany may be right in arguing that the rest of Europe ought to play catch up rather than force it to shift down a gear, but the message falls on rather hostile ears when bail-outs are accompanied by draconian austerity measures that have perpetuated Greece’s gruelling recession for five years. "There is frustration with Germany, [it] is moving ahead, but what are they doing for the rest of Europe?" says André Sapir, a senior fellow at Bruegel, a think tank.

German preponderance in Europe is not a novelty. Germany has outshone the continent since the 1980s, when the mark’s strength caused strains in the European Monetary System. As such, the Economic and Monetary Union project was born out of a desire to liberate other European countries from the dominant monetary policy of the Bundesbank. The current crisis is reminiscent of that situation, both because of the ECB until recently pursuing a rather conservative monetary policy which harmed heavily indebted countries, and because Germany’s deep pockets mean it calls all the shots. In the words of Tommaso Padoa-Schioppa, "German leadership of Europe is a fact, ignoring this would be the wrong way for Berlin to exercise its leadership."

Merkel seems to have grasped this, albeit belatedly, and has embraced her de facto leadership with the quasi-scientific meticulousness that characterises her political method. As Guy Verhofstadt, a former Belgian prime minister, once remarked, "she likes incremental steps, she has no vision for Europe." Germany’s skewed economic prowess may have been one of the factors at the heart of Europe’s travails, but with foreign assets worth some 6 trillion euros, consisting mostly of claims on eurozone members, Germany would be no winner in a break-up of the euro. In fact, the stress tests on European banks in 2010 revealed just how exposed Germany’s feckless banks were to Greek debt, which largely helps explain the reversal of Merkel’s position towards a Greek bail-out. Saving the eurozone was synonymous with saving the German banking system from collapse.

Wolfgang Münchau wrote in The Financial Times that "with unification, Germany has become too large to be an ordinary European state, yet not large enough to be a superpower", thus neatly encapsulating the difficult relationship between Europe and Germany. The latter’s overbearing economic strength is part of the problem, but by failing to translate economic might into political leverage it has allowed the crisis to fester and the idea of Europe, esoteric though it may be for many voters, to fade into oblivion. Instead of rallying Europe around the vision that has guided the integration process hitherto, a harmful chasm between fiscal saints and sinners has been allowed to take root. Merkel has concentrated on demanding trenchant reforms in embattled countries and more intrusion on national sovereignty with the latest "fiscal compact", whilst dogmatically refusing to concede anything in return. Any attempts to set up Eurobonds as the sine qua non of increased budgetary surveillance have been stymied. If she is to emerge as a successful leader of the beleaguered old continent, she must bring out her "conductor’s baton". A concrete plan to restore growth and competitiveness in Europe which does not rely solely on self-perpetuating austerity would be a good start. Bring on the Merkel Plan.