Time Is Running Out

The U.S. Senate and House of Representatives have until the 2nd of August to come up with a deal to extend U.S. debt ceiling beyond $14.3 trillion and avoid the very real possibility of default.

President Obama, the Republicans in the House of Representatives and the Democrats in the Senate have been arguing at length over how to make $3 to $4 trillion in savings over the next ten years. So far the Republicans have ruled out supporting Obama’s tax increases, with Reuters suggesting that revenue is the main sticking point between the two sides.

Much like the crisis economies of the Euro zone, the United States will be on the brink of default in just over a week. This is scary stuff. Alister Bull and Richard Cowan at Reuters remark:

With the world’s biggest economy set to run out of money to pay all of its bills on August 2, the window was closing fast for a “grand bargain” of spending cuts and tax increases in exchange for Congress raising the debt ceiling.

Financial markets are growing more edgy and U.S. banks and businesses are making contingency plans for the possibility of a debt default that would drive up interest rates, sink the dollar and ripple through economies around the world.

If the United States goes to the wall, it will be for the first time in its history and will also mean the loss of its prized triple A credit rating, with far reaching consequences for the world economy.

The US, like so many Western economies, has run up vast debts in past decades, due in no small part to the ever increasing financial burden of a bloated welfare state. It is not as though this problem has happened overnight either. George Bush, that supposedly evil, nasty, right-wing zealot was a prolific borrower and spender at the expense of the American taxpayer. Likewise, Barack Obama, who has been in office for a number of years now, has had plenty of time to get to grips with U.S. domestic spending – and yet here we are, only weeks away from a massive default and suddenly there’s a mad panic to rearrange the deckchairs on the Titanic.

So Where’s That Referendum Mr Cameron?

Before the General Election, you may recall that we were repeatedly assured, despite all evidence to the contrary, that David Cameron was actually really rather conservative and eurosceptic, and that he would show his true colours once in office.

Commentators within the right-wing media assured their readers that obtaining office was absolutely vital, and that in a press dominated by the BBC and the liberal-left then Mr Cameron was forced, hands behind his back, to kowtow to the liberal elite in order to not so much gain their support, but pacify their criticism.

Not to worry we were earnestly told. If the Conservatives portrayed themselves as the heirs to Blair and moved to the Left on a number of supposedly minor, largely irrelevant social and economic issues then the BBC and Guardian would be totally wrong-footed.

All that hugging of hoodies, understanding rather than punishing criminals, reneging on referendum pledges, capitulation to equality and diversity, dictatorial control of party candidate lists, promises to match Labour’s state spending plans, attacks on selection by academic ability, the protection of the bloated welfare state, sexual liberalism, ‘investing’ yet more of our money in the lumbering and inefficient NHS bureaucracy, further commitments to maintaining British troops in Afghanistan, and so on – it was all a front to deceive Parliament’s gatekeepers in the liberal media establishment into allowing the Tory party back into office.

Dave really didn’t mean it at all. Honest. Upon entering the door of Downing Street for the first time as Prime Minister, his leftist visage would dissipate, and as if by a miracle, a great light would shine down upon him from the heavens and seconds later the real David Cameron would re-emerge to govern as a real, true-blooded Tory eurosceptic rather than under the very limp-wristed social democrat policies by which he had been elected.

Many of us didn’t believe it then, and of course even more are, if slowly, beginning to realise the truth now. David Cameron is not a conservative; he is a social democrat. He was elected as one and he will govern as one. Thus, the circle is now complete. The transfer from Blair and Brown to Cameron has seen the personnel change, but the policies have not – and they won’t change.

It therefore comes as little surprise that our Prime Minister has ruled out a Referendum vote on the proposed creation of a new EU Treasury, revealed today by the Daily Mail. That supposedly robust euroscepticism from our boy Dave is looking rather thin on the ground isn’t it? The Mail comments:

In a move likely to infuriate his party, Mr Cameron has already ruled out the prospect of giving the British public a say on the plans for a superstate. The Prime Minister will argue that a referendum on the proposals is unnecessary because the changes would only affect the countries in the single currency. But that stance was dismissed yesterday on the grounds that the plans will still have a profound effect on Britain by radically changing the nature of the EU, effectively shackling the UK to any new institutions. Tory MPs branded the likely changes ‘bigger than Maastricht’ – the treaty which led to the creation of the European Union and the single currency – and demanded a referendum.

In reality, Cameron’s referendum lock on transfers of power to the European Union was always a sham. When it was announced, the measure was used in an attempt to put the EU issue to bed, at a time when Mr Cameron was coming under sustained attack for his reneging on his commitment of a referendum on the Lisbon Treaty.

The lock itself is utterly meaningless as the Government can simply deny that a transfer of power will occur, as many European states did with the Lisbon Treaty, and therefore deny a referendum. A more useful measure would be to ask the Government in what situations a transfer of power would exist to allow a referendum? I don’t think Mr Cameron and company would like that though.

Instead, while Dave continues to break his pledges and further increase the size of our national debt, the European Union lurches on with its usual attempts to further ever closer union in this latest ‘beneficial crisis’ in the Euro zone. Don’t expect our MPs and castrated Parliament to come riding to the rescue either. It’s mass economic default that lies ahead, or ever closer union (courtesy of Dave). Whichever way you look spells disaster on a grand scale.

A Rude Awakening

I’ve just arrived back from the blazingly hot island of Malta where I’ve spent this past week trying to forget about the realities of the present and instead learn a little more about the not so recent past.

Even so, I’ve managed to keep a few tabs on the news (if you could really call it that) in the evenings via Sky News in my hotel room (it was a choice between that, CNN and a selection of rather dubious foreign comedy channels).

Amusingly, I also caught a late night news round-up on the BBC World Service with Richard North as a panellist. Amazing really; you go abroad to get away from the work, the blogs, Richard North et all, and yet the man still manages to find a way through!

No doubt parts of our beloved national media are being overcome with similar feelings. As much as the press try to ignore the current economic realities, they just keep cropping back up to divert their attention from the vital task of endlessly discussing themselves.

Just before my return, it seemed that, all of a sudden, the broadcast and newspaper media had finally woken up to the fact that, yes, the hacking affair was not perhaps the most important item of news on the current, reality-based agenda. The Euro zone economies are collapsing under a mountain of self-inflicted debt, and there is a very real possibility that this could destroy the single currency.

This collapse has been on the cards for some time now, and yet if you listen to large sections of the media then it would appear that they have only recently uncovered this crisis, such is the wide-eyed wonderment with which it is breathlessly reported.

It strikes me that the treatment of the financial crisis by the media is in many ways similar to the famine in Somalia. It wasn’t until this week when the United Nations publically declared that there was a famine in Somalia that the media suddenly took interest. Before the announcement, it was if the famine had not existed, such was the miniscule level of reporting. Similarly, now that the European Union, in the form of our dear leader, José Manuel Barroso, has spoken of the severity of the European economic situation then suddenly, guess what, it’s a crisis! Who would have thought it..?

It seems, in the collective eyes of the media establishment, that for something to exist or become fact then it must be acknowledged by the U.N. or receive other supposedly ‘expert’ approval. And it’s not just any old ‘expert’ that will do either, but ones carefully selected from ‘accepted’ groups and organisations who have a monopoly on officially and legitimately being allowed to care about suffering, starvation or our old favourite, climate change. If anyone outside of the bubble expresses an opinion, however valid or important, then nothing is done. It is ignored, until suddenly, an oik at the BBC or Guardian decides that, you know what, the European economies might actually be on the verge of hitting the fan because José told us so. Only then, apparently, is it worthy of being ‘news’…

Departed From Reality

There is something deeply disturbing about the publicity the media and political class has given to the supposed phone ‘hacking’ scandals recently.

The sheer volume of coverage has been somewhat staggering, with the broadcast media having given the matter virtually wall-to-wall treatment, with every miniscule new event turned into ‘breaking news’, all reported in wide eyed, breathless tones by metropolitan elite newsreaders.

Likewise, the print media have gone into overdrive, filling hundreds of pages and columns with mindless prattle on the technological equivalent of rummaging through someone’s dustbins (something that, incidentally, our beloved and benevolent state does to us with little comment or complaint by that same media and politicians).

Yet, for all the quantity of reporting then there has been very little in the way of quality, with most articles rarely scratching beyond the surface of the issue and indulging in the typical kind of bubble-journalism which is increasingly prevalent in the mainstream media.

If only the media elite expended as much effort examining Britain’s membership of the European Union, the financial crisis into which we are rapidly sinking, or the way in which (as Christopher Booker weekly highlights) children in this country are let down in the ‘care’ of the state. But, then again, this is the British media…

During this manufactured scandal, the political and media classes have shown the full extent of their regressive and symbiotic relationship, with each feeding off the filth disgorged by the other and revelling in the spectacle: one rotten establishment propping up another equally rotten institution, like two corpses with rigor mortis.

Meanwhile, as our politicians and media vie for the limelight in their race to the bottom, dealings of far greater significance are taking place across the Atlantic. Ambrose Evans-Pritchard tells us:

On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody’s to warn of a “very small but rising risk” that the world’s paramount power may default within two weeks.

This, as he highlights, is an incredibly scary prospect. Whether it will actually happen is another matter, but the spectre of default now hangs over the US economy and consequently the world. After the Wall Street crash in 1929, it was said that when America sneezes, the rest of the world catches the cold – and it now appears that the same or worse may well happen again unless the US institutions can pull the country back from the brink with debt reduction.

Of great interest has been the way in which the price of precious metals has risen as paper currency has receded in value due to the inflationary pressure of printing money. I recall reading an article in the Daily Mail back in May, which noted that the US State of Utah became the first in the country to legalise gold and silver coins as currency. This was a warning sign of events to come, and Evans-Pritchard highlights the increasing flight by the markets to Gold.

Yet, so absorbed in its own sordid affairs is our British media that the crisis that is gripping the world is treated as almost purely an economic rather than political issue. This is the news that should be on the front page of newspapers. This is the news that should be leading daily broadcast news bulletins on the BBC and Sky. Instead though, we have to contend ourselves with the dreary mug shots of Rebekah Brooks and company as the world crashes and burns.