Monday 30 October 2017

Democracy in Spain


I have been carrying on a running argument with an Indian colleague of mine about what he considers to be the unfair handling of the Turkish coup and the Catatonian bid for independence.

His baseline, as it turns out, is that the major difference is that Turks are "people of color", and Spaniards are white, and therefore Spanish police brutality is overlooked and Turkey is condemned for being barbaric. To him that explains why the Germans are so aggressive about the Turkish handling of the coup.

My counter has been that the Germany has been less concerned about the Turkish response to its own population (although the wide ranging imprisonments under the auspices of the coup seem to be more politically motivated as opposed to dealing with real security concerns) but rather with the imprisonment of German journalists under the guise that they are foreign agents "spying" on Turkey fomenting unrest.

They are also concerned about threat that Erdogan poses to democracy in that he is using autocratic means to change laws to position himself to be able to claim the mantle of "operating within the law".

The Germans have a history with this and so are perhaps especially sensitive about putting into law actions which are actually criminal.

Furthermore, I have argued that it is incorrect to compare the Turkish coup with the situation in Catalan and a better comparison would be how the Spanish are going about dealing with Catalonia versus the Turkish handling of their Kurdish minority.

I haven't made much headway.

This despite the fact that the Kurds haven't even ventured to hold an independence referendum in Turkey. The recent response to the Iraqi Kurdish plebiscite is perhaps a good indication of why not. The Iraqi central government responded quickly and remorselessly with military force.

And we shouldn't forget that a referendum in Turkey on Kurdish independence, as in Catalonia, is against the law.

It is an imperative of central or federal governments to ban referendums as they would go at the core of the state's central powers. Even if the Scottish referendum had been won by those wishing to leave the UK it was not a legally binding referendum although it had been countenanced by the central government.

This morning a spokesperson for the Catalan independence movement was quoted that this was not a question of legality but rather of democracy.

I think that might be where the problem begins.

One of the first tenets of democracy is the rule of law.

I would suggest that the Spanish government has been clear regarding the illegality of a referendum and how they would respond to it. Incarcerating the Catalan government and calling for a new election is not something they thought up overnight.

They have Article 155.

Spain's Senate voted 214 to 47 to invoke Article 155 and seize control of the region immediately after it had declared its independence. This marks the first time since the fall of dictator Francisco Franco in 1975 that the central government has taken direct control of one of Spain's 17 semi-autonomous regions.

Despite the fact that I think the Spanish government was a bit heavy-handed with their police actions against the referendum, the basic response was the correct one.

All the plebiscites in the world, if they are against the law in the country in which they are held are actually anti-democratic. If you want to have a legal plebiscite then you have to win enough votes at a national level to legalize a referendum, especially on independence.

Democracy is a two-edged sword.

Thursday 22 June 2017

The View from South of the River

Yesterday I went out to the pub with one of my business partners and his father 'John'.

It was an interesting experience.

The father is in his early 70's, a bit of a self-made man which means he dabbles in a number of things with a strong bent towards residential real estate and as he would say he's "doin' awright".

Bromley generally votes Conservative although the margins of victory have been slowly reducing. Essentially they fit into the left wing of the Conservative party which in American parlance would mean "Republicans with a heart".

Bromley voted Remain, as did 'John'. He voted Conservative in the June 8th election, but actually was voting against Jeremy Corbyn of Labour as opposed to for Teresa May of the Conservatives.
When his son, who voted remain and voted Tory heard the results of the June 8th election he called his father to moan about what a disaster it was. To his surprise, his father was almost euphoric.

His rationale was that Teresa May, although a tepid Remainer, was indeed a Remainer. He also said she had no scruples coupled with a consuming desire for power and so she happily jumped into the leadership battle after the Brexit vote, taking up the Leave standard and embracing wooden phrases such as "Brexit means Brexit"- whatever that means- and the equally inane "no deal is better than a bad deal", without ever engaging with the idea that no deal could indeed be the worst deal.

So when Ms May called the snap election claiming it was to achieve a crushing majority in Parliament thus stiffening her back for the coming battles with the EU 'John' thought the election was actually a chance for a second referendum on Brexit. He was concerned that there was even more at stake in this second referendum as he was concerned that Mr Corbyn would have a much stronger showing on the Brexit wave. This despite the fact that if he were not an outright Leaver he was basically an abstaining Remainer and could still garner those young voters who had failed to show up for the actual Brexit referendum.

And, according to 'John', despite the risk, this explains the abysmal campaign run by Ms May.

So on the morning of the 9th he was confident that Ms May would work out a way to remain prime minister and would actually have a 'soft' Brexit mandate, and would no longer have to pretend that no deal was an option.

The dalliance with the DUP is still unclear as they represent the far right and the far left of the Conservative party and have a pork barrel list on top. Their anti-abortion and homophobic anti same-sex marriage goals will find no support in Westminster but their open-border demands between Ireland and Northern Ireland actually plays into the hands of Ms May and all the soft Brexiteers regardless of party affiliation.

So, if politics makes for (very) strange bed partners a Conservative/DPU majority is the epitome of that phrase.

Enter the Liberal Democrats.

The Liberal Democrats won 12 seats, 2 more than the DUP.

They are a recognized party and were part of the last coalition with David Cameron's Tories.

They ran a poor campaign with their leader, Tim Fallon, an evangelical Christian who spent most of his campaign trying to deny that he was anti-gay refusing to deny that homosexuality was a sin. He has since resigned and it looks as if the new leader of the Liberal Democrats will be Vince Cable who is pro-Europe, was Business Minister under Mr Cameron. Mr Cable lost his seat in the 2015 elections and therefore although his predecessor had declared that the Liberal Democrats would not do a deal with the Conservatives Mr Cable feels no responsibility to uphold that pledge.

This was all last night.

It remains to be seen who Ms May goes with but I believe one thing is for sure: Brexit may mean Brexit, but what Brexit means is a much broader church today than it was 2 weeks ago, and that can only be a good thing.







Tuesday 25 April 2017

To Save the EU Germany might have to Change


I get into a lot of arguments about Germany's current account surplus which this year is around 8.6% of GDP. That is a huge number. It has drawn criticism from primarily the US claiming currency manipulation. It has also come under attack because of the German propensity to save. Lastly, the other old chestnut rolled out is Germany's ruthless efficiency (in manufacturing).

Germany carries an almost hysterical fear of inflation predicated on its experience of hyper-inflation in the 1920's. This has resulted in a national consciousness which focuses on financial stability with a strong tendency to save on a private as well as on a public level.

But Germany's current account surplus is only partially a result of trade. It doesn't subsidize its exports and only indirectly controls the level of the Euro by virtue of its economic might. Under the current structure the independence of the European Central Bank (ECB) remains as sacred as that of the Bundesbank with the caveat that politically there is monetary but not fiscal union which means Germany, like every other EU nation looks to its own house first.

Because there is no overt currency manipulation nor are there any subsidies paid to support exports the problem appears to boil down to excess savings at the expense of investment.

The Financial Times(FT) recently attacked the Germans suggesting that Germany should tackle its saving surpluses which they went on to blame on over-regulated service industries; low growth level of public and private sector investment; and damaging and unnecessary fiscal surpluses.

Hmm.

Damaging and unnecessary fiscal surpluses.

Just what is it that they would like Germany to do?

I believe they are referring to calls from some corners for a fiscal union, or at least the first steps to a fiscal union giving the EU/ECB the right to impose policies on member states to influence the relationship between savings and investments. But this would be a major step to a federal Europe. It requires relinquishing aspects of sovereignty that no one seems to be willing to do because they think Germany will run a federal Europe.

Sounds like a rock and a hard place.

What it really requires is a German politician- either Merkel or Schulz to admit domestically that although Europe has benefited from the EU and Euro, Germany has benefited even more. It might be time to spread some of the German benefit (ie surplus), and to do so will require more rather than less union.

The argument somehow always ends with someone yelling at me that the Germans run Europe.

I don't argue. I refer to their complaints about Germany's ruthless efficiency.

I ask would they prefer they were building tanks instead of cars.....



Thursday 6 April 2017

Of Nepotism and Ethics in a Banana Republic

The following is a quote from the New Yorker:

"Having sent Tillerson home from Beijing spouting Communist Party mantras, Xi’s envoys have turned their attention to the representative they really care about: Trump’s son-in-law, Jared Kushner. From a Chinese perspective, Kushner’s role in the White House is a clannish arrangement that they know well. Many of Trump’s current courtiers may be gone in a year of two, but the members of his family will remain. For a while, China appeared to be preparing to endear itself to Kushner in a way that only it can: Anbang, a financial conglomerate with close ties to the Party leadership, was nearing a deal that would have unlocked billions of dollars to help Kushner save a troubled investment in a skyscraper on Fifth Avenue. Last week, the Kushner family announced that talks had broken off, for reasons that were not clear. It’s certainly possible that a surge of negative publicity was making one side or the other uncomfortable."

Let me repeat part of that: "Anbang, a financial conglomerate with close ties to the Party leadership, was nearing a deal that would have unlocked billions of dollars to help Kushner save a troubled investment in a skyscraper on Fifth Avenue."

So let me get this straight. Jared Kushner, Senior Advisor to his father-in-law Liar Trump is in China negotiating a deal with a Chinese financial conglomerate to protect one of Jared Kushner's investments?

I expect to read articles like this concerning the antics of third world dictatorships (or corporate CEO's), but not about members of the president's inner circle, and especially not if they are related to the president.

From the cabinet of billionaires to the buffoons masquerading as counselor to the president and presidential press secretary it looks like a ridiculous sitcom parodying a tinpot dictatorship.

Unfortunately it is not a TV show despite the best efforts of Trump in conjunction with various outlets of the media who are determined to push their view that news in general and politics specifically are just another form of entertainment to be used by Liar Trump for self-enrichment and by the media to increase ratings in order to sell commercials.

It is real life geopolitics.

I can only hope that Liar Trump might be learning the lesson that despite his desire to phrase everything for the benefit of third graders the real world is a lot more complex. Cue Health Care, Tax Reform, Syria, China and just about everything else he will encounter.

While he's on that learning curve I have to maintain my faith in the integrity of the American form of governmental checks and balances to save us from HL Mencken's "narcissistic moron".

Tuesday 4 April 2017

Little Britain

I have been so overwhelmed by the cascade of garbage emanating from the White House and certain parts of Capitol Hill that I have found it difficult to reflect on anything else thus putting what I view to be one of the most self-destructive acts undertaken by a sovereign state into the shadows.

Of course I am referring to brexit.

I am not going to go over all of the inanities of the the referendum. I am not going to fall into the category of a "remoaner" as the brexiteers like to tar anyone who was against brexit from the beginning and is still incredulous at the we've drunk the kool-aid and brexit means brexit brigade.

No.

I am going to quote Tony Blair, who, for all his faults, came out with a concise description of where we are.

The brexiteers have made the decision that they don't like the house they are currently living in because the "utilities" are somehow controlled by people who don't live in their neighborhood. Their solution is to sell their homes without ever having looked at what their new home will look like, how much it will cost, what repairs will be necessary and whether the "utilities" will be any better once they are controlled by their neighborhood.

But I can report that the brexiteers tell me that I am wrong, that Tony Blair is certainly wrong, and then continue to bleat their brexit means brexit refrain.

I therefore now have chosen a different tact.

I tell them how happy I am that brexit means brexit and that now the NHS will finally get the funding it requires as brexit means Britain will save £350 million a week which will be put into the NHS.

You guessed it. They look at me with a perplexed look and tell me that I can't possibly believe that the NHS is really going to get £350 million a week.

And I can't possibly believe that they really voted for brexit.

Friday 3 March 2017

Throwing the Baby out with the Bath

I recently read William Cohan's "Why Wall Street Matters". It was a good explanation of all the good things banks do: finance governments, finance corporations; provide credit which is the grease that makes the economy run. It was all good stuff with one major problem.

His argument is that with all the negative press the banks garner everyone seems to forget all these good things that banks do.

Really?

Is there something inherent in banks that in order to do good they have to also be rife with immoral if not criminal behavior?

It's not that I'm expecting banks to be populated by saints. But I am puzzled by this idea that if you punish the bad bankers then the good one's won't be able to function.

Maybe Mr Cohan should spend less time praising bankers for doing what they are supposed to do and come down a bit heavier on those bankers who knowingly abuse their knowledge and position to game the system in a 'heads they win tails we lose' casino.

That might have been Bernie Sanders point.....



Monday 30 January 2017

A Perfect Storm

I recently got into a somewhat heated exchange with two friends over my equating of Trump with Hitler. For the record I must state that neither of them are Trump supporters. One is a staunch Democrat and Hillary supporter and the other a Libertarian with Republican leanings, but as I mentioned, aggressively anti-Trump.

To be fair my foray into the comparison was predicated on an article I had read (http://www.faz.net/aktuell/wissen/michel-houellebecq-und-der-untergang-des-abendlandes-13373949.html). The article was actually an analysis of Michel Houellebecq's novel "Submission" in conjunction with Oswald Spengler's "The Decline of the West".

What got the exchange started was my quoting Spengler's "Caesarisim"- his theory that democracies are susceptible to populism and as such subject to an inherent tendency to dictatorship. Spengler was writing in 1918 and his hypothesis found its realization in Hitler and Mussolini.

That is when the discussion went ballistic.

How could I possibly compare Trump to Hitler? He would never murder 6 million people.

That was my mistake. Hitler was an extreme version of autocracy. They were right. I am unsure how far Trump will go in his pursuit of power. To equate him with Hitler is somewhat disingenuous on my part. It moves the discussion from the rational to the emotional.

So I will rephrase my statement.

The United States is at a tipping point. We are closer than at any other time in our history to fall prey to a populist with autocratic ambitions that could dismantle our democratic institutions and replace them with a dictatorship in all but name. To resist this temptation takes a person of staunch republican values. Someone who recognizes the limits of power as proscribed under the constitution. And someone with the moral fibre and integrity to understand that the office of the presidency is not a platform for personal aggrandizement but rather an almost sacred seat from which one rules for the benefit of the nation.

Trump has done nothing to demonstrate that even if he were aware of the intellectual, personal and moral discipline required to maintain the presidency that he would submit his own ego and narcissism to the requirements of the office.

So I was wrong to compare Trump to Hitler. Hitler is but one in a long line of despots who rode into power on the coattails of some semblance of a democratic process and then systematically destroyed that very same process to wrest absolute power for themselves.

The founding fathers were fully aware that they were on the cusp of something not really ever seen before. They were following on from the ideas of the Enlightenment where the concept of the rights of mankind were understood and well defined. They were creating a land where personal freedoms would be protected by law and where the power of the people would be measured and moderated in a representative government that itself would be controlled by a series of checks and balances intended to guard against absolutism.

But these checks and balances were predicated on a statement, while fraught with all sorts of baggage given the position of the Native Americans, slaves and women just to name a few, still sang out: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."

Let me repeat that. "We hold these truths to be self-evident...".

They don't require any further discussion. They were written to explain why they were declaring their independence from absolutism. They were planning to put in its place a system predicated on the rule of law with a rash of freedoms enshrined in the document by which they would rule.

One of the things I kept hearing during the presidential campaign was that in the separation of the judicial, legislative and executive offices we have a carefully crafted system of checks and balances that would keep Trump in check.

I have seen nothing to suggest this is happening.

I also heard after the election that Trump was elected and it was his responsibility to fulfill his mandate granted by that electorate.

What everyone seems to forget is that Hitler too was elected to power. He too had a popular mandate, provided by the same barbell that catapulted Trump to power: the disaffected mob and the industrial complex.

But neither was elected to dismantle the democratic state. Neither was elected to trample over the rule of law in creating their autocracies.

Trump has entered the White House in a whirlwind.

He is following a time honored method to segue from democracy to autocracy.

Muzzle the press.
Rule by decree.
Find a scapegoat.
Dismantle the organs of government:
The Judiciary
The Intelligence Agencies
The Central Bank


Trump has declared the press the enemy. He and his staff are working hard to undermine their role as an organ of opinion and analysis and to replace them with "Alternative Facts".

Trump has essentially declared a state of national emergency, sidestepping the standard procedures of state and ruled by executive order.

Trump has declared immigrants, refugees and Muslims as all members of an undesirable group, the root of all evil, and under the mantra of national security is systematically removing whatever vestige of human rights they might have. For the record he is also going after women.

He is replacing independent "civil servants" with his own people. Trump has removed the Director of National Intelligence and the Chief of Staff from the National Security Council and has replaced them with Steve Bannon who I have not yet decided if he is Josef Goebbels or Martin Bormann. by his own admission he himself draws inspiration from Leni Riefenstahl so I can't be far off.

The next assault will be on the judiciary. It will begin with the nomination for the Supreme Court that the Republican Congress refused to even entertain under the Obama Administration.

I also expect the independence of the Federal Reserve to come under pressure when Janet Yellen's term ends in February 2018.

So perhaps I was a bit overzealous with my comparison of Trump with Hitler.

Let it please be so.



Wednesday 11 January 2017

You Reap what you Sow.

Although I have not read the recent 35 page dossier published by BuzzFeed and actually think it was poor judgement to release unverifiable material somehow I can't dismiss the report out of hand.

First and foremost, according to the Politifact scorecard Trump was True 4%; Mostly True 11%; Half True 15%; Mostly False 19%; False 33% and Pants on Fire 18% of the time. This means he blatantly lied 51% of the time and was very judicious with the truth 34% of the time. For him to suddenly find religion and denounce others for lying seems very much in tune with what I would expect from Trump.

Making unverifiable accusations was meat and potatoes to his campaign, so his denouncing this dossier as lies and slander doesn't help in discovering the truth. He denounces everything he doesn't agree with as lies.

I am interested however that the material made it into a classified briefing from the intelligence agencies to the President and President-Elect. I am sure the intelligence community sees a lot of bizarre material, but I would doubt that they include it all in their briefing material.

Somewhere there must be a concern that there are at a minimum parts of this report that merit disclosure, at least at a classified security briefing. Otherwise it would have been dismissed out of hand.

Still, I think BuzzFeed was wrong to publish it. There is more than enough garbage being spewed daily by Fox News, Breitbart and the like that I would have thought BuzzFeed wouldn't want to be put into that category. They actually have lowered themselves to the level of that bastion of journalistic endeavor and one of Trump's favorite sources the National Enquirer. But that is their cross to bear.

Trump has helped introduce and relished in the post-factual age and then complains when it is turned against him.

He should grow up.










Thursday 5 January 2017

Is it Treason?

Over New Year I had an interesting conversation with an M&A lawyer who is deeply concerned about President-elect Trump and that his allegiance apparently lies not with the United States but rather with the Trump empire as personified by himself.

My friend went on to discuss Trump's disregard for the establishment framing him as an anti-political agitator, indeed that he is in denial of politics itself which in essence means he is against the democratic process which is the only alternative to government by coercion and the tyranny of the majority.

This last point is important. Trump's approach is to constantly harp on about the will of the people while trampling not only on the rights of minorities but actually on the rights of the minority. Anyone who raises objections to the "will of the people" is branded as an enemy of the people.

Such an anti-democratic stance I would suggest is diametrically opposed to the Constitution which Mr Trump will be swearing to uphold on January 20 but I am also aware that it would be very difficult to prove until it is too late. What appears to me to be less difficult to prove is Trumps response to charges that Russian cyber attacks on the United States intentionally interfered with the democratic process during the election. Mr Trump has chosen to come down decidedly on the side of Wiki-Leaks and the Russian Intelligence community against the 17 US Intelligence agencies, outside cyber experts, Democrats and Republicans on Capitol Hill and even at least one Trump adviser all expressing either misgivings or outright accusations about Russia's cyber activities in the context of the election.

The definition of Treason in Article III of the Constitution states that "Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court". (The bold type is my own).

I would maintain that Trump is flirting with treason: I question that he indeed intends to uphold the Constitution and I feel strongly that he is adhering to enemies of the United States.