Author: philmullan

The reckless adventurism of Trump’s war in Iran

philmullan Changing world order, Geopolitics, Politics, United States

The White House has launched a war with little thought, strategy or rationale.

What do America’s air strikes against the Islamic Republic of Iran tell us about the disposition of this aged global power? Overriding everything else, the war confirms that America retains an extremely powerful military machine, but has a political class that doesn’t know how to act in its country’s interests.

The anxieties of its insular Beltway elite are worsened because it can’t brush off how much its economy’s apparent buoyancy is dependent on foreigners continuing to lend to it. Washington’s under-discussed debt trap is a persistent risk, including for funding its military. America’s objective position in the world, its unprecedented – I employ that overused word with thought – its unprecedented combination of military superiority alongside a hollowed-out industrial and productive base, makes it an erratic and dangerous force in international affairs.

This represents a perilous situation for Americans, as well as for the rest of the world’s population. Another lesson of the war is that in opposing unexplained and arbitrary actions overseas, many voters for Trump show a shrewder grasp of geopolitics and of US national interests than do Trump and his team.

Read the full article here.

The West needs a reckoning with America’s decline

philmullan Changing world order, China, European Union, Geopolitics, Rivalries, United States

Despite Donald Trump proclaiming that a ‘framework of a future deal’ had been agreed on Greenland, it is still unclear how his demands are likely to be resolved. In any case, the fracas over this icy island is about far more than just the unpredictability and narcissism of the White House incumbent.

The Greenland saga has exposed the shortcomings in geopolitical nous of the West’s leaders – Trump included – and just how hazardous this can be for everyone. International flashpoints are more likely to get out of hand when traditional statecraft is replaced by kneejerk, megaphone diplomacy.

This danger is compounded by the fact that world leaders should already be grappling with a perilous situation: a potential Thucydides trap. But they are refusing to do so.

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This Budget debacle signifies much more than Rachel Reeves’ ineptness

philmullan Debt, Democracy, Economic policy, Politics, state, Welfarism

After this shambolic Budget, it is now beyond doubt: no one should believe a word uttered by the chancellor of the exchequer. Her Budget statement this week amounted to a litany of broken pledges – including some made only weeks ago.

In her spirited response to Reeves’s statement, opposition leader Kemi Badenoch urged the chancellor to stop blaming others and instead blame herself. While Reeves certainly has much to answer for, it is ultimately misleading to hold her alone responsible for this politically and economically alarming state of affairs.

The deeper issue is that the British political system itself now produces figures like Reeves: technocratic managers who lack both authority and genuine democratic accountability. Reeves, Keir Starmer, and their cabinet colleagues merely personify the impotence of this type of managerialist politician.

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Rachel Reeves has no answer to Britain’s financial mess

philmullan Debt, Economic policy, Politics, state, Welfarism

The deluded chancellor is at it again as Rachel Reeves prepares her second “one-time-only” tax-raising and debt-increasing autumn Budget. After last year’s Budget, the chancellor declared: “We will never need to do another budget like this again… We have now set the envelope for spending for this parliament, and we are not going to be coming back with more tax increases or, indeed, with more borrowing.”

But Rachel Reeves has spent much of the past month suggesting that it would be necessary to raise income-tax rates in the next budget. But now Reeves has U-turned on her U-turn. Having spent weeks suggesting the dire state of the public finances necessitated income tax rises, she appears to have changed her mind again. According to reports, Reeves was told by the God-like Office for Budget Responsibility this week that the government’s financial shortfall will be not quite as large as first forecasted – closer to £20 billion than £30 billion. This ‘good news’ apparently allowed Reeves to back down on some of her floated increases in income tax rates. There’s little doubt that political expediency also played a significant role in this U-turn on a U-turn.

This government seems to have absolutely no idea how to tackle Britain’s profound economic challenges. So let’s imagine an alternative approach: a new government is elected next week, with a mandate to fix things. What sort of budget could it come up with in the interests of the country?

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This is worse than the IMF-bailout crisis

philmullan Debt, Economic policy, Politics, Productivity, state , , ,

Economists and other commentators have been warning that Britain is heading towards a 1970s-style debt crisis – that is, at some point soon, bond investors might stop lending to the government. Critics claim we could be looking at a situation similar to that which faced James Callaghan’s Labour government in 1976, when it had to resort to an International Monetary Fund (IMF) bailout. But in some ways, Britain finds itself in a much worse state, economically and politically, than it did in the 1970s.

Productivity growth is much weaker than in the 1970s. The decay in productivity growth over the past half-century underpins the incapacity of the state, and the degradation of public services and infrastructure. Indeed, it is the problem of productivity growth that has produced the government’s most pressing economic challenge: how to deal with the unprecedented peacetime expansion in public indebtedness.

If productivity decline is a result of economic constraints that have been built up over time, the grim state of the public finances is different – it is primarily a political problem. Since the 1980s, successive governments of all political stripes have side-stepped the reality of the productivity slowdown. Instead they have acted as if ‘money is no object’. This is a matter of bad political choices, not economic fate.

Whatever you think of the politics and policies of the Callaghan-Healey team in the late 1970s, their robust political leadership shows up the timidity and ineffectiveness of Starmer and Reeves. Unlike Labour in the 1970s, Starmer and Reeves have no plan or clue how to steer the UK from disaster.

Read the full article here.