Dr Strangelove

Another bombardment of tough love is already skyward and heading our way this week as the independence-haters – what else can they be with such irrational, self-harming persistence – seek to hammer home their orchestrated line on no currency sharing. (I get images of Osborne astride a descending bomb like the major in Dr Strangelove)

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It would have been arm-round-the-shoulder week, like the boozy wincher, angling for a stolen kiss, no doubt turning nasty on rejection. Instead, through their own ineptitude, they are obliged to bludgeon us with ever more shrill insistence that they meant it all along. I notice, by the way, that Mark Carney has been quietly recruited by some as saying there would be no currency deal. He didn’t and wouldn’t.

We will laugh at their growing desperation but remember they aren’t listening to us, they are hitting the same target every time – the worried Don’t Knows.

I think there could be a problem in all this though and it’s already been hinted at by a senior Tory. Constantly telling anyone what they can and can’t do, especially on dubious moral authority, is the same mistake Margaret Thatcher and her nutty Scottish acolytes like Michael Forsyth made. They simply couldn’t grasp that free citizens – supposedly Britain’s real Tories – won’t comply with authoritarianism and lose their respect for their tormentor.

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I think that’s what lay behind Jackson Carlaw’s open admission that he would fight for currency union, if and after the Scots voted Yes. But he is rare. The rest of the party are repeating historical mistakes by assuming the position of master over servant. The effective declaration that ‘It’s our currency, our bank and our country, so fall into line’ is the message of the Thatcher years. Forsyth forced the idea of privatisation and the dismantling of local representation (‘municipal socialism’) on an unwilling population in the wide-eyed belief he knew better than those he represented. He even split and nearly destroyed his own party on Thatcher’s behalf. His bête noir was devolution which he opposed to the end – 1997 – when it was the only way his party was able to survive. No Parliament: no Tories. Fascinating to learn that the No Pound wheeze was promoted by the very man who worked with Forsyth and Thatcher on the Poll Tax, the Scot, since decamped to Sussex, Andrew Dunlop. See what I mean about never learning? And what do those Labour voters make of their new friend, Dunlop, those anti-independence, Labour folk who will never forgive the Tories for the Poll Tax?  Their main ally in Number 10, the man who got Ed Balls to share the platform, is the architect of the same tax. How much of this can real Labour people take?

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Unionists need to beware. They may egg on the sterling coalition for the sake of the campaign but what lies beyond the vote? What kind of Union is it that makes explicit the disempowerment of one partner and the total dominance of the other? The currency issue has become emblematic of future difficulties.  Like redundant miners and steel workers, the combined British No Pound declaration will be an historical icon and a constant reminder of our true role in the Greatest Union in History ©.

Now of course, again by ham-fisted campaigning, they have created a longer-term problem. By telling the world that there will be no currency deal, they face an uphill task implementing one if there is a Yes. In fact, I wouldn’t be surprised if they are confronted by demands for a commitment to a UK-wide referendum on currency sharing, a commitment demanded before September.

Frankly, English voters would be quite right to demand direct input into this. After all, they’ve been told by their own government – and the opposition and the civil service – that this is against the UK’s national interest. If there are wobbles in government, as the leak clearly confirms, why shouldn’t the rest of Britain seek reassurance from a referendum? Their own ministers have made it a big deal and if the Scots have a referendum on independence and there is one promised on Europe, why not on currency? Yet, this is the last thing the Whitehall Mafia wants. They are more aware than anyone that they need currency union to keep a grip on the balance of payments and borrowing and to present a business-as-usual face to the world. But their electioneering has created a firestorm of opposition to the very idea they will be anxious to implement. A second, completely contradictory campaign explaining the virtues of union will be needed to convince an English audience this is, after all, the right thing. Why not just tell the truth in the first place? I know…it’s politics etc, but really, if they know it does make sense and helps retain a functioning part of their sacred union AND hands over a proportion of their stellar debt, doesn’t it beg the question? The outcome of their incompetence may well be no shared currency by default. Personally, I would welcome it as would many others and would make clearer than anything that Scotland tried for a deal and wanted to share the debt but democratically beaten by the sterling flag-wavers. I’m not sure this is a battle worth fighting.

 

 

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40 thoughts on “Dr Strangelove

  1. I agree entirely Derek…we should pull up the drawbridge and leave the coniving devils to it!

  2. AS knows all the moves. He watched them make their under-hand, below-the-table deals in Westminster and thus he is always one step ahead. Once we have independence we’ll call the shots and they’ll just have to mind their own business and become sweet, friendly neighbours………at long last.

  3. Just a thought on this: I think Alistair Darling is right when he says a currency union without a political union (like in Europe) can’t work. But to tell voters why that is would mean letting the cat out of the bag about austerity. The euro zone’s problems are not, as some people say, down to the economic dissimilarities that exist between euro nations. They are due to the fact that euro zone states gave up the power to issue their own currencies, thereby rendering them susceptible to default risk. A true fiscal sovereign (that is, currency monopolist) like, eg, the UK, US or Japanese governments can never run out of money. It’s not revenue constrained, because its own spending is the source of the funds that the private sector uses to pay tax or purchase bonds. As currency monopolist it’s also the price setter – the cost of its borrowing is at the discretion of the central bank, not the bond markets. Although nominally independent, the BoE cannot bounce a Treasury cheque – in practice the treasury therefore holds a position of superiority over the CB. In a currency union, however, the CB would presumably have to be *truly* independent and this would open up the possibly that both treasuries could actually default, which at present, the UK treasury cannot. So in order to argue effectively against a CU, the unionists would have to reveal the fact that the entire basis for austerity – the claim that the government is skint – is complete bollocks.

  4. I’m going to vote YES regardless but need a bit of clarification on this currency thingy, preferably from someone comfortable with Plain English.

    Now I understand assets, so the BoE has 370bn or so gilts and possibly lots of goldbars and other goodies, assuming Gordon Broon didn’t pawn them all off. So if all this is totted up and divvied out in proportion, whatever, so far so good and that’s that.

    It seems to me banks can be created with backing, indeed this is currently happening in the UK with suitable creditors, and out of nothing in other countries such as Israel. So as the other bits of UK are divvied up after 2016, how can we insist we are still part of an ongoing BoE if rUK say it, as a State, is the sole creditor of said Bank ?

    As a non-economist but a saver I look forward to one of Derek’s esteemed followers improving my understanding

    • Good piece here.

      http://wingsoverscotland.com/project-fear-by-numbers/

      I’m fairly challenged on these things myself, but this article seems pretty straight forward in explanation and relevant links.

      • have read this, but still doesn’t answer my basic query.

        • I’m no expert either, yerkitbreeks.

          After a Yes vote, an agreement over CU will have to include the divvying-up of assets but that doesn’t mean Scotland would physically cart away its share up to Edinburgh. I think Scotland could leave its BoE assets in the hands of Carney et al – at least for the first few years of independence, until savings’ rates and pensions are sorted out. The rUK may claim it is sole creditor for the BoE but traders and investors would know Scotland’s assets in the BoE would act as insurance for any future economic problems.
          Personally I would prefer our own currency but I think it’s wise to wait a few years until negotiations with rUk are settled, and the rest of the world sees how things have safely stabilized, then we could transfer our assets to Edinburgh, along with full responsibility for all our liabilities.

        • Well the first thing to say is the bank of england is not really a bank as you know it. Yes it is the uk central bank but call it a bank is slightly misleading as it is more an instrument of the uk state or a regulatory body than anything else that has responsibility for maintaining monetary and financial stability in the uk. These powers come from a mandate from the uk government and could theoretically be withdrawn by the uk government anytime it decided to take setting interest rates back “in house”. The function of the BoE is to monitor the economy and take such measures as necessary to control interest rates, inflation and the uk money supply. If it all goes wrong it is there to shore up failing banks by taking measures such as quantitative easing or providing effectively iou’s. A lot of the uk debt is iou’s to the banks that nave never actually been paid. The thing about it is, it is not something that can simply be divvied up after a yes vote, much like the NHS or the foreign office. It isn’t as simple as going down to London and chopping one of the governors legs off and bringing it back north.

          And ps. that article on wos it total nonsense so no wonder it didn’t help. If you want to know the truth about a currency union widen your horizons and go read something by someone like Paul Krugman who knows a lot more about economics than rev stu – he should have stuck to playing computer games.

          • Thanks Dan and John – sort of confirmed some of my issues with this. Paul Krugman, by the way hasn’t I suspect applied himself to Inde here, as judged by his belief that entry to the EU would be so difficult.

    • Good place to start is Robin McAlpine’s blog which takes you through the debt/assets negotiating strategy. It’s very good and in layman’s language. Only thing it doesn’t cover is quantitative easing which I think Wings covered or maybe Biz for Scotland. I’ve read it somewhere. The blog is here http://www.cmonscotland.org/

  5. “I notice, by the way, that Mark Carney has been quietly recruited by some as saying there would be no currency deal. He didn’t and wouldn’t.”

    At last someone has noticed – thanks Derek1

    Mark Carney is continually dragged out as being in opposition to a CU when what he, in essence, said was “The politicians decide, we make it work.” He also explicitly said that he would not support either side.

  6. Fully agree Derek I’ve said for some time that Westminster have left themselves with little or no wiggle room on this issue. Even if they did wish to reverse on the tactic they would find it near impossible to do so due the enormous campaign and media investment in the current narrative.

    The repercussions of doing so would leave egg over the faces of every party in Westminster. The interesting thing though is in the release by the unnamed minister, quite clearly laying blame for the current strategy at Darling and Dunlop’s feet. Begs the question of who is running Westminster policy, Darling and BT or the Tory driven Coalition? Credibility is hammered under both scenarios, both looking equally incompetent, but it may be a case of who comes out with less mud sticking in the event of a YES win.

  7. I can not figure what the advantage for Sterling is in removing £1.6+ trillion asset from its balance sheet and losing 25% of its foreign exchange earnings.

    Sterling is at a four month low, the financial markets have made clear they would prefer a currency union but are more worried about Sterling’s potential exit from the EU in 2020. It is hard to suggest the current low is only as a result of the currency union squabble but the world markets do not like uncertainty.

    They got jittery enough over the UK debt position after a ‘yes vote’ to force the UK Government to state the debt would remain the rUK’s liability.

    In some respects it could be argued ‘no currency union’ better suits both parties with the £Scots pegged to Sterling which, I believe, ensures pound for pound parity but allows the parties to part with greater ease than in a formal currency union.

    Derek could well be right that Wee Eck has played the CU card well, as it is in effect a win/win for Scotland which ever way it goes. After all we have been advised by the IFS and other economic studies that an independent Scotland will start with a stronger fiscal position than the rUK, no matter what.

    I can see no political purpose behind the Better Together claims, only their hatred for Alex Salmond and the SNP which permanently blinds them to what is actually happening in Scotland. A point made in the Holyrood Magazine article on the recent Labour Scottish region ‘rally’ where expressing hatred of Alex Salmond and the SNP was more important than saying what Labour’s Scottish region actually stands for.

  8. The Guardian article on Friday said that Jackson Carlaw had since disowned his remarks that he would fight for Scotland to retain the pound in the event of a Yes vote. Has anyone seen any evidence for this?

  9. Derek,
    Everything they have said about currency is just them laying down the law-‘You’re no gettin’ it, right?’ It’s guaranteed to get the Scots’ hackles up.
    I’ll tell you what kind of union ‘ makes explicit the disempowerment of one partner and the total dominance of the other’ The British Union, which has been doing it for 300 years and add to that the 100 years before the Act of Union was signed, which they spent undermining the Scottish economy, to put us in the position of being dominated by them. They can keep their currency, which is not worth the paper it is printed on, and their enormous debt. We have to set up a currency board, as they did in Ireland, and while that is operational the new currency can be pegged to Sterling, as they did in Ireland too. Then it becomes the new Central Bank. Sounds simple enough! I’m sure it’s not!

  10. Darling suggesting referendum on CU in today’s Telegraph, just as you predicted.

  11. Thomas William Dunlop

    A few things

    1) Andrew Dunlop. No relation, Thank Christ!

    2)”The rest of the party are repeating historical mistakes by assuming the position of master over servant” Could be equally applied to all the Westminster parties

    3)It is ironic that in a small country there would be plenty of scope for a centre right party, so why are the tories against it. It is down to the fact that their sole has been captured by neoliberalism. SOmething that the commonweal minded Scots do not like

    • Wasn’t it Einstein who said his definition of insanity was someone doing the same thing over and over, and expecting a different result? I would say that pretty much sums up “Project Fear”.

  12. This is worth a read. Had this guy ever heard of democracy. The lead about the Currency Union has shot his attempts at ordering his staff to vote NO.
    http://www.scotsman.com/news/politics/top-stories/barrhead-travel-director-defends-anti-yes-memo-1-3359505

  13. “In fact, I wouldn’t be surprised if they are confronted by demands for a commitment to a UK-wide referendum on currency sharing, a commitment demanded before September.”

    Already such demands are being made on Twitter. But I doubt if they will be listened to. A more likely scenario is that the “no currency union” tactic (and others) will be dropped to pretend they are moving to a more “love the Scots” campaign. TINA returns in another guise. There is no alternative for them. Fear, smear, sneer has not worked.

    As an aside it is interesting that the search for the ‘mole’ seems to have been dropped. So maybe it WAS Hammond and he was floating Trident for CU. If so it just shows how poor their intellect is. Trident is FAR FAR more important than a CU, especially when we have four other currency options.

  14. I think your article is spot on, I have thought for a while that the more dogmatic they are, the deeper the hole they are digging for themselves. They do NEED the CU, but it may come to pass that to have one, due to their ham fisted handling of the issue, it may become politically impossible.
    Such is the bad feeling they are building up south of the Border.

    They are trying every dirty trick they can think of, but Scots are increasingly disillusioned and getting more angry at their antics. If they end up without a currency union, it will be entirely their own fault, they may by then, even have to bribe us to enter one. Either way, they have a conundrum to try and solve, but have they the ability to do that? It does not look like it.

    • http://krugman.blogs.nytimes.com/2014/02/24/scots-wha-hae/

      Couple of months old now but still very relevant. The key point is made in para 4, this is why a sterling currency zone isn’t going to happen. it is a very bad idea for all concerned. What makes me laugh about this blog entry is the cybernat visitors who are trying to tell nobel prize winning economist Paul Krugman, who is completely neutral on the subject and is just voicing his well qualified opinion that he is wrong.

  15. Dr JM Mackintosh

    John,

    I do not think this is a very neutral comment and displays a patronising view of the Scots – very poor considering enlightenment Scots invented his subject of Economics.

    ” and it sort of shares a common language with England (even if you sometimes wish there were subtitles). ”

    I am sure if I used anti-Jewish language like this I would accused of being anti- Semitic and racist.

    Surely you can do better than this – just pathetic.

  16. Its ironic that Barhead travel will now lose business as a result of a threatening their staff! The guy has obviously never consulted an HR manual concerning individuals rights within the workplace.If my employer tried this stunt I would be taking them to a tribunal for harassment and disrespecting personal beliefs.The guy has not thought this through so will now be guaranteed to lose business as a result of his stupidity.I for one will never use Barhead travel.When I see their name it will be ever ingrained on my mind that they only want customers who vote no and that can’t be right.

  17. I get the feeling that Treasury are still not convinced by Darling’s No Pound plan. I would suspect that ears were bent, arms twisted, favours called in to get the Treasury onside. Now with this minister’s intervention the game is up. Darling ‘s latest call for a referendum on a currency union just compounds this mess.

  18. Simon Pia’s comments on ST to ignore the debate on a currency union highlights how damaged and confused BT have become. To desert the main plank of the No campaign leaves the unionists with no arguments. It is that bad

  19. I think all of this smacks of bitter together politics within the unionist parties? The government and their backers(financial institutions) know they will need a CU after a yes vote and are aware that the momentumn is heading for a Yes. They are worried that events and their policy may skuttle any chance of a CU after the referendum, Hence they leek Fridays story firmly laying the blame for the strategy at the feet of the Scottish architects, Darling and Dunlop. This will allow them to save at least a small amount of credibility by blaming Labour (darling) for the policy once negotiations really start.
    Darling knows this, so challenges them to hold a referendum in England on an CU, which will undermine them in their homelands.

  20. Darlings call for a referendum on CU means he doesn`t trust westminster to hold the line on this in the event of a yes vote , He wants the electorate of RUK to handcuff the westminster politicians so as to not expose him as using an anti scottish tactic for a no vote

    • Graham Hewitt

      Perhaps the main reason for the Euro’s problems is that they fudged the entry conditions for so many of the economically weaker nations as part of the political project. It also suited the largest economy, Germany, as the weaker economies went in with too high an exchange rate while Germany went in with one that was too low, so they were able to sell their now much cheaper goods to the rest of the Eurozone.

  21. Derek
    Thought you had vanished from the “ether”. Had serious withdrawal symptoms. Glad I found you again on this new (?) site, but no follow button. Aaarrrggghhh!!!

  22. Yer kit breeks

    Your missing the point about what krugman is saying. The key issue here not whether Scotland would get into the EU or how long it would take, the key point is why the euro almost bankrupted the entire continent. It failed because there wasn’t close enough political union. Fiscal union requires political union to work. That’s why the uk economy has lasted for 300 years and the eurozone almost collapsed in about 10… And the worst case Czech Slovak union lasted 5 days.

  23. John MacDad, you’re forgetting that Westminster bankrupted the UK 6 years ago.

    • ohh yeah.. i forgot about that… wasn’t that not long after salmond criticised the uk for having too strict a banking regulation regime and egged fred the shred into bankrupting RBS…

  24. I think the original plan by BT to suggest that a C.U. was ”unlikely” was reasonable and fitted into the uncertainty narrative that they were using regards indy.

    It seems to me that this was not good enough for the nasty brigade extremists of SLab such as A Darling, who it now appears was behind the change to a definite NO.

    The lure of an ermine cloak is a powerful thing.

  25. Seeing Alistair Darling, the Chair of better together (the united ConLabLib campaign against Scotland running its own affairs), being repeatedly slapped down in public by Conservative government ministers must be deeply embarrassing for him.

    I think he should print off his job description and go have a chat with the Conservative government ministers and Prime Minister and clear the air with a “back me or sack me” meeting.

    Once Darling is sacked, David Cameron should debate Alex Salmond on the future of Scotland.

    In terms of the better together campaign, I think it right that the Conservative party directly run the campaign as their supporters have funded it.

  26. Scots by nature have always been careful and small ‘c’ conservative in their attitude to all things fiscal which is why we accept a CU as being the ‘Scots way’, but there comes a point, when if alternatives have to be considered they will be, thoroughly, and this is precisely where we’re now at with rUK/Westminster stuck in the doldrums with no control of the situation.

    The SG have options and they have not been kept a secret. The assets/labilities issue has been well spelled out. The BoE governor Mark Carney didn’t come to the SG to give a lecture, he came to look at the SG position ‘first-hand’ and publicly, more to educate and inform the rUK/Westminster pack than for any other prime reason.

    Cameron et al, should get real and confront the unfolding truth that Scotland could turn its back on Sterling and the debt share very easily indeed and be prepared for any problems that that will bring, which,by any independent analysis other than from cloud cuckoo land is something that’s not to hand in the rUK rescue pack.

  27. No one seems to have digested this. ” We will laugh at their growing desperation but remember they aren’t listening to us, they are hitting the same target every time – the worried Don’t Knows.”

    I suggest a great number of armchair warriors get off their erses and go outside and have a blether with some of said Don’t Knows.

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