Commentary Magazine


Topic: Labour government

A Thatcherite Moment in America

President Obama, in attempting to gain traction just ahead of the midterm election, has homed in his message on taxes – and most especially, on “tax cut for the wealth.” Here is how Obama is framing his argument:

Ninety-seven percent of Americans make less than $250,000 a year — $250,000 a year or less. And I’m saying we can give those families — 97 percent permanent tax relief. And by the way, for those who make more than $250,000, they’d still get tax relief on the first $250,000; they just wouldn’t get it for income above that. Now, that seems like a common-sense thing to do. And what I’ve got is the Republicans holding middle-class tax relief hostage because they’re insisting we’ve got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost over the course of 10 years, $700 billion, and that economists say is probably the worst way to stimulate the economy. That doesn’t make sense, and that’s an example of what this election is all about.

Let’s examine what the president said, starting with this observation: Obama’s sudden interest in the pernicious effects of large deficits is curious. There is no apparent limit to what Obama is willing to spend – yet when it comes to taxes, and almost only taxes, the president professes to be alarmed about the deficit. With that in mind, here’s a useful reference point: the $700 billion over 10 years that Obama is so eager to save is considerably less than Obama’s first (failed) stimulus package, which alone is estimated to have cost more than $860 billion. It would help Mr. Obama’s credibility if, in opposing taxes on fiscal grounds, he was not the most profligate president in American history. Read More

President Obama, in attempting to gain traction just ahead of the midterm election, has homed in his message on taxes – and most especially, on “tax cut for the wealth.” Here is how Obama is framing his argument:

Ninety-seven percent of Americans make less than $250,000 a year — $250,000 a year or less. And I’m saying we can give those families — 97 percent permanent tax relief. And by the way, for those who make more than $250,000, they’d still get tax relief on the first $250,000; they just wouldn’t get it for income above that. Now, that seems like a common-sense thing to do. And what I’ve got is the Republicans holding middle-class tax relief hostage because they’re insisting we’ve got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost over the course of 10 years, $700 billion, and that economists say is probably the worst way to stimulate the economy. That doesn’t make sense, and that’s an example of what this election is all about.

Let’s examine what the president said, starting with this observation: Obama’s sudden interest in the pernicious effects of large deficits is curious. There is no apparent limit to what Obama is willing to spend – yet when it comes to taxes, and almost only taxes, the president professes to be alarmed about the deficit. With that in mind, here’s a useful reference point: the $700 billion over 10 years that Obama is so eager to save is considerably less than Obama’s first (failed) stimulus package, which alone is estimated to have cost more than $860 billion. It would help Mr. Obama’s credibility if, in opposing taxes on fiscal grounds, he was not the most profligate president in American history.

Second, according to the Congressional Budget Office, the cost for extending the Bush tax cuts to married taxpayers with income below $250,000 and single taxpayers with income below $200,000 – which Obama supports – would reduce revenues by almost $2 trillion over the 2011–2020 period. If Obama’s argument is that he should oppose tax cuts because of their adverse effect on the deficit, then presumably Obama should oppose extending any of the Bush tax cuts he has demonized for the better part of three years. Instead, Obama favors extending them to individuals making less than $200,000 per year.

Obama cannot have it both ways. He cannot on the one hand castigate Bush’s tax cuts as reckless, irresponsible, and ineffective while at the same time extending them for all but the highest income earners.

Third, Democrats assert that the Obama tax increase will hit only 3 percent of small businesses. “There aren’t 3 percent of small businesses in America that would qualify for that tax cut [one for families making more than $250,000],” Vice President Biden has said. Speaker Nancy Pelosi has chimed in as well, declaring that the tax increase on higher income earners would exempt “97 percent of small businesses.” In fact, it will hit fully half of all small-business income, since 85 percent of small-business owners are taxed on profits at individual tax rates.

Twenty months into his presidency, Barack Obama’s problems extend far beyond this particular tax debate. His problem is, in my estimation, conceptual and philosophical. He is trying to spur growth through extravagant government spending, which he believes will increase demand with its magic “multiplier effect.” If that theory worked, of course, we would not be experiencing economic deceleration with unemployment stuck at nearly 10 percent, the collapse of sales of new homes earlier this year, consumer confidence at an alarmingly low level, a “recovery summer” that saw us lose more than a quarter of a million jobs, and economic growth that is far lower than past post-recession recoveries. Yet Obama continues to double down, as if unchecked government spending, onerous new regulations, and higher tax rates on small businesses and our most productive workers is the road to prosperity.

The president is quite wrong about all of that – and it may be that Obama’s failures, for all their economic and human cost, serve a useful pedagogical function. Obama is reminding people, in fairly vivid ways, what works when it comes to economics – things such as rewarding effort and enterprise, recognizing the importance of incentives, creating certainty and stability that encourages investment and entrepreneurship, and honoring success and achievement.

In that sense, we might be reaching a moment similar to the one Margaret Thatcher faced when she was leader of the Opposition in Great Britain. The failures of the “old” Labour government were obvious to almost everyone – and that created a moment for Thatcher to become prime minister and for Thatcherism to take root.

“Where the state is too powerful,” Mrs. Thatcher told the Zurich Economic Society in 1977, “efficiency suffers and morality is threatened. Britain in the last two or three years provides a case-study of why collectivism will not work. It shows that ‘progressive’ theory was not progressive. On the contrary, it proved retrograde in practice. This is a lesson that democrats all over the world should heed.”

“Yet I face the future with optimism,” Thatcher went on to say. “Our ills are creating their own antibodies. Just as success generates problems, so failure breeds the will to fight back and the body politic strives to restore itself.”

It looks to me like we are seeing something similar taking place in America today. We’ll know more in seven weeks.

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Can Americans Count on the New Brit Coalition?

While one of the hallmarks of Barack Obama’s foreign policy has been the trashing of the formerly “special” relationship between the United States and Britain, it is interesting to speculate what would happen in the event that Washington really needed London’s help. While Gordon Brown’s Labour government could be relied upon as America’s pal in a pinch even if Obama treated the dour Scot like a dog, what would be the reaction from the coalition duo of David Cameron and Nick Clegg to a call for assistance from Obama, especially in the not-altogether-unlikely event of a crisis in the Middle East, involving Iran’s nuclear ambitions?

That’s the question Daniella Peled asks in today’s Guardian. Her answer is that it is far from certain how the new British coalition will respond. The problem lies in the competing agendas of the two parties as well as in their differing attitudes toward the United States.

On the one hand, Prime Minister Cameron has already demonstrated how desperate he is to buddy up with Obama, and the president, who clearly didn’t think much of Brown, isn’t averse to a warmer friendship with the new UK leader. But that doesn’t mean that Cameron is eager to become the junior partner on foreign-policy initiatives to the Americans that Tony Blair was, even if the current resident of the White House is Barack Obama rather than George W. Bush. As for the Conservative Party itself, Peled quotes one party leader as saying “we’re just not that interested” in the Middle East one way or another.

Their Liberal Democrat coalition partners, however, have a very different attitude toward foreign policy in general and the Middle East in particular. The Lib-Dems want to distance the United Kingdom from America even more than Obama wants to distance the United States from Israel. Not only are they unhappy about continuing to fight the war against the Taliban and al-Qaeda in Afghanistan; they are also virulently anti-Israel. All of which means that the Lib-Dems are unlikely to support any measures intended to seriously pressure Iran on the nuclear issue. As Peled states, this means there is a huge potential for conflict within the new government on key foreign-policy issues.

However, the notion that the new UK coalition will crack up over a 3 a.m. request from Obama to assist a strike on Iran is more fantasy than anything else. The Obama administration is more likely to learn to live with a nuclear Iran than to fight to remove the existential threat against Israel and the destabilization of the region. And for all of his desire to cozy up to Obama, Cameron’s desire to hold on to his place at No. 10 Downing Street probably outweighs anything else.

But even if we take such an apocalyptic scenario out of the discussion, there is no question that even a White House as devoted to multilateralism and engagement as that of Obama must understand that the new British government cannot be considered as reliable an ally as its predecessor. Neither the Tories nor the Lib-Dems aren’t interested in being portrayed as Obama’s poodles. Nor do they care much about Iran, Hezbollah, or Hamas. For all of his disdain for Gordon Brown, there may come a day when Barack Obama will wish the special relationship he helped destroy could be brought back to life.

While one of the hallmarks of Barack Obama’s foreign policy has been the trashing of the formerly “special” relationship between the United States and Britain, it is interesting to speculate what would happen in the event that Washington really needed London’s help. While Gordon Brown’s Labour government could be relied upon as America’s pal in a pinch even if Obama treated the dour Scot like a dog, what would be the reaction from the coalition duo of David Cameron and Nick Clegg to a call for assistance from Obama, especially in the not-altogether-unlikely event of a crisis in the Middle East, involving Iran’s nuclear ambitions?

That’s the question Daniella Peled asks in today’s Guardian. Her answer is that it is far from certain how the new British coalition will respond. The problem lies in the competing agendas of the two parties as well as in their differing attitudes toward the United States.

On the one hand, Prime Minister Cameron has already demonstrated how desperate he is to buddy up with Obama, and the president, who clearly didn’t think much of Brown, isn’t averse to a warmer friendship with the new UK leader. But that doesn’t mean that Cameron is eager to become the junior partner on foreign-policy initiatives to the Americans that Tony Blair was, even if the current resident of the White House is Barack Obama rather than George W. Bush. As for the Conservative Party itself, Peled quotes one party leader as saying “we’re just not that interested” in the Middle East one way or another.

Their Liberal Democrat coalition partners, however, have a very different attitude toward foreign policy in general and the Middle East in particular. The Lib-Dems want to distance the United Kingdom from America even more than Obama wants to distance the United States from Israel. Not only are they unhappy about continuing to fight the war against the Taliban and al-Qaeda in Afghanistan; they are also virulently anti-Israel. All of which means that the Lib-Dems are unlikely to support any measures intended to seriously pressure Iran on the nuclear issue. As Peled states, this means there is a huge potential for conflict within the new government on key foreign-policy issues.

However, the notion that the new UK coalition will crack up over a 3 a.m. request from Obama to assist a strike on Iran is more fantasy than anything else. The Obama administration is more likely to learn to live with a nuclear Iran than to fight to remove the existential threat against Israel and the destabilization of the region. And for all of his desire to cozy up to Obama, Cameron’s desire to hold on to his place at No. 10 Downing Street probably outweighs anything else.

But even if we take such an apocalyptic scenario out of the discussion, there is no question that even a White House as devoted to multilateralism and engagement as that of Obama must understand that the new British government cannot be considered as reliable an ally as its predecessor. Neither the Tories nor the Lib-Dems aren’t interested in being portrayed as Obama’s poodles. Nor do they care much about Iran, Hezbollah, or Hamas. For all of his disdain for Gordon Brown, there may come a day when Barack Obama will wish the special relationship he helped destroy could be brought back to life.

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So, What’s the British Outcome Mean?

Jokes abound. One colleague tells me it’s a Mick Jagger election: no one got any satisfaction. I’m reminded of Zhou Enlai’s response when asked about the significance of the French Revolution: it’s too soon to tell. But at the risk of being proved wrong by political developments over the next few hours, and analysis of the results over the next few years, let me offer a take.

First, one really heartening fact: as Martin Bright points out, it was a bad night for Islamists and fascists. The Respect coalition — Ken Livingstone’s ill-sorted collection of Islamist sympathizers — was crushed all around. George Galloway (what a relief to no longer have to describe him as George Galloway, MP) got the boot. The BNP was routed. Various MPs targeted by the Muslim Public Affairs Committee survived. This is all very satisfactory.

The second fact was the unexpectedly bad performance of the Liberal Democrats. When the first exit poll appeared at 10 p.m. local time, showing that the Lib Dems were likely to lose seats, no one — myself included — thought it had any credibility. It did. The tricky question is why. The explanation now percolating in commentators’ columns is that Nick Clegg rode a boomlet up and then rode it down.

I don’t discount that possibility, but here’s another: there never was that much support for the Lib Dems in the first place. The so-called Golden Rule of British political opinion polling for the past 20 years has been that the poll showing the worst result for Labour is the most accurate. The Tories are, usually, the beneficiary on the day of this nonexistent Labour support.

It may be that, in the middle weeks of the campaign, this non-support abandoned Labour (perhaps because no one wanted to say they were voting for Gordon Brown when they weren’t) and jumped ship to the Lib Dems. And then came the day that the non-support did what it usually does — slosh back to the Tories. That’s just speculation, but for now I incline to the belief that the Lib Dems became, for a brief moment, the verbally acceptable alternative for voters who actually had entirely different plans in mind.

The third fact, obviously, was that Cameron was unable to climb the mountain. And it was a mountain. Only once in Britain’s post-1945 electoral history has a government with a clear majority in the Commons been defeated and replaced by a different government, also with a clear majority. And that was in 1970, which was a shock result. It’s fair, probably, to say that Cameron might have been expected — should have been expected, maybe — to do better. But the mountain was really, really big.

The fourth fact is that the Tory successes were surprisingly random. Seats relatively high on their target list were not won — but this was (almost) balanced by successes where their odds seemed slim. The conclusion I draw is that this was an election where good constituency MPs were rewarded, and bad ones were punished. The expenses scandal of last year may have had a lot to do with this — Jacqui Smith, for example, went down to defeat. But it may also say something about the decay of parties as the organizing force in British politics, a subject I’ve complained about before. If so, it helps explain why Cameron couldn’t quite pull it off.

So, what’s next? As Yogi Berra supposedly said, predictions are dangerous, especially when they’re about the future. There are three things that will be decided over the next few hours, or days: who’ll be PM, whether there will be a coalition government, and when the next election is. My bet on the third point is October 2010: I see no way a coherent, stable government can be formed from the existing alignment in the Commons. As for the first point: Cameron. No one appears to want to do a deal with Gordon Brown except Brown himself.

The interesting question is how and on what terms Cameron will be installed in No. 10. One possibility is a full coalition government, with the Liberal Democrats. But except for the fact that both the Tories and the Lib Dems want to be in government, they have very little in common. They are miles apart on foreign policy and have less in common domestically than the Tories and Labour. A coalition between them would lack any organizing principle. Its price would probably be some sort of electoral reform — a possibility that is chewing up the newswires right now. I have written at length on the genesis of proportional representation in Britain, and I won’t burden anyone with that now. Suffice it to say that my research makes me very skeptical about its desirability.

A second possibility, therefore, is a Tory government drawing support on an issue-by-issue basis from the Lib Dems, Labour, the Ulster Unionists, and the other minor parties. This, to my mind, is the most likely possibility, but it’s also one of the least capable of offering strong leadership in response to the fiscal crisis. Come the next election, this might evolve into a Tory and Lib Dem agreement that each would focus its fire on Labour. That would gain the Tories enough seats to form a government, and the Lib Dems enough seats to move out of their status as the eternal bridesmaid of British politics.

And then there’s a third possibility. The Tories and Labour, in fact, have at least as much in common with each other as they do with the Liberal Democrats. In 1931, during the greatest of Britain’s previous fiscal crises, the collapse of the Labour government led to the election of a Tory-dominated government of national unity, with only the more extreme elements in British politics (elements of the Labour Party, the Lloyd George Liberals, and Oswald Mosely) left on the side.

I don’t expect this to happen again. But if it did, and if the Tories and Labour both concentrated their electoral fire in the subsequent election on the Lib Dems, the result would probably be a Lib Dem wipeout. I wonder if this thought has occurred to Nick Clegg as he entertains offers from Cameron and Brown.

Jokes abound. One colleague tells me it’s a Mick Jagger election: no one got any satisfaction. I’m reminded of Zhou Enlai’s response when asked about the significance of the French Revolution: it’s too soon to tell. But at the risk of being proved wrong by political developments over the next few hours, and analysis of the results over the next few years, let me offer a take.

First, one really heartening fact: as Martin Bright points out, it was a bad night for Islamists and fascists. The Respect coalition — Ken Livingstone’s ill-sorted collection of Islamist sympathizers — was crushed all around. George Galloway (what a relief to no longer have to describe him as George Galloway, MP) got the boot. The BNP was routed. Various MPs targeted by the Muslim Public Affairs Committee survived. This is all very satisfactory.

The second fact was the unexpectedly bad performance of the Liberal Democrats. When the first exit poll appeared at 10 p.m. local time, showing that the Lib Dems were likely to lose seats, no one — myself included — thought it had any credibility. It did. The tricky question is why. The explanation now percolating in commentators’ columns is that Nick Clegg rode a boomlet up and then rode it down.

I don’t discount that possibility, but here’s another: there never was that much support for the Lib Dems in the first place. The so-called Golden Rule of British political opinion polling for the past 20 years has been that the poll showing the worst result for Labour is the most accurate. The Tories are, usually, the beneficiary on the day of this nonexistent Labour support.

It may be that, in the middle weeks of the campaign, this non-support abandoned Labour (perhaps because no one wanted to say they were voting for Gordon Brown when they weren’t) and jumped ship to the Lib Dems. And then came the day that the non-support did what it usually does — slosh back to the Tories. That’s just speculation, but for now I incline to the belief that the Lib Dems became, for a brief moment, the verbally acceptable alternative for voters who actually had entirely different plans in mind.

The third fact, obviously, was that Cameron was unable to climb the mountain. And it was a mountain. Only once in Britain’s post-1945 electoral history has a government with a clear majority in the Commons been defeated and replaced by a different government, also with a clear majority. And that was in 1970, which was a shock result. It’s fair, probably, to say that Cameron might have been expected — should have been expected, maybe — to do better. But the mountain was really, really big.

The fourth fact is that the Tory successes were surprisingly random. Seats relatively high on their target list were not won — but this was (almost) balanced by successes where their odds seemed slim. The conclusion I draw is that this was an election where good constituency MPs were rewarded, and bad ones were punished. The expenses scandal of last year may have had a lot to do with this — Jacqui Smith, for example, went down to defeat. But it may also say something about the decay of parties as the organizing force in British politics, a subject I’ve complained about before. If so, it helps explain why Cameron couldn’t quite pull it off.

So, what’s next? As Yogi Berra supposedly said, predictions are dangerous, especially when they’re about the future. There are three things that will be decided over the next few hours, or days: who’ll be PM, whether there will be a coalition government, and when the next election is. My bet on the third point is October 2010: I see no way a coherent, stable government can be formed from the existing alignment in the Commons. As for the first point: Cameron. No one appears to want to do a deal with Gordon Brown except Brown himself.

The interesting question is how and on what terms Cameron will be installed in No. 10. One possibility is a full coalition government, with the Liberal Democrats. But except for the fact that both the Tories and the Lib Dems want to be in government, they have very little in common. They are miles apart on foreign policy and have less in common domestically than the Tories and Labour. A coalition between them would lack any organizing principle. Its price would probably be some sort of electoral reform — a possibility that is chewing up the newswires right now. I have written at length on the genesis of proportional representation in Britain, and I won’t burden anyone with that now. Suffice it to say that my research makes me very skeptical about its desirability.

A second possibility, therefore, is a Tory government drawing support on an issue-by-issue basis from the Lib Dems, Labour, the Ulster Unionists, and the other minor parties. This, to my mind, is the most likely possibility, but it’s also one of the least capable of offering strong leadership in response to the fiscal crisis. Come the next election, this might evolve into a Tory and Lib Dem agreement that each would focus its fire on Labour. That would gain the Tories enough seats to form a government, and the Lib Dems enough seats to move out of their status as the eternal bridesmaid of British politics.

And then there’s a third possibility. The Tories and Labour, in fact, have at least as much in common with each other as they do with the Liberal Democrats. In 1931, during the greatest of Britain’s previous fiscal crises, the collapse of the Labour government led to the election of a Tory-dominated government of national unity, with only the more extreme elements in British politics (elements of the Labour Party, the Lloyd George Liberals, and Oswald Mosely) left on the side.

I don’t expect this to happen again. But if it did, and if the Tories and Labour both concentrated their electoral fire in the subsequent election on the Lib Dems, the result would probably be a Lib Dem wipeout. I wonder if this thought has occurred to Nick Clegg as he entertains offers from Cameron and Brown.

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Cameron Willing to Take Obama’s Shilling to Be a Loyal Soldier Against Israel

Jewish Ideas Daily provides a brief guide to the upcoming British elections for supporters of Israel, but the short answer to the question of which of the three contending political parties will be friendlier to the Jewish state is “None of the Above.” The current Labour government has shown itself to be no friend to Israel, and the Liberal Democrats who hope to play the spoilers on May 6 is home to an even greater proportion of Israel-haters than is the Labour hard-Left. As for the Conservatives, JID gives them some credit: “The tone of party pronouncements on Israel are notably sympathetic. William Hague, a former party leader and now Shadow Foreign Secretary, criticized Labor for not voting against the Goldstone Report.”

However, Melanie Phillips points out in her Spectator blog that Tory leader David Cameron, whom she prefers to call “David Obameron,” is promising to line up as a loyal soldier in the Obama administration’s diplomatic war on Israel. As evidence she cites the following in an interview with Cameron in the Financial Times published on March 31 (subscription required):

FT: Yes. You managed to tell Mr. Netanyahu that he might want to revise his position on settlements.

DC: I have. Unlike a lot of politicians from Britain who visit Israel, when I went, I did stand in occupied East Jerusalem and actually referred to it as occupied East Jerusalem. The Foreign Office bod who was with me said, most ministers don’t dare say. So, yes, I thought I had quite an argument when I was in Israel with Tzipi Livni about settlements and I think Obama is right to take a robust line. I think we have to but it is depressing how little progress is being made right now.

So Cameron — whose skimmed-milk New Age version of conservatism may wind up pulling defeat from the jaws of victory in the coming ballot — not only brags about his disdain for a united Jerusalem and his disagreement with the leader of the opposition to Israeli Prime Minister Benjamin Netanyahu’s government on the fate of Jerusalem but expresses support for Obama’s diplomatic offensive against the Jewish state. It may well be that trying to identify himself with Obama may be good British politics right now, but this stand seems to conform with the rest of Cameron’s worldview, which is anything but friendly to Israel or the long-term interests of the West. Barack Obama may well be able to count on him in his campaign against Israel while doing nothing about the nuclear threat from Iran.

The bottom line: while some American conservatives may instinctively favor the defeat of a Labour government by the party of Margaret Thatcher, David Cameron is no Thatcher. As for friends of Israel, they’ve no rooting interest at all in the outcome.

Jewish Ideas Daily provides a brief guide to the upcoming British elections for supporters of Israel, but the short answer to the question of which of the three contending political parties will be friendlier to the Jewish state is “None of the Above.” The current Labour government has shown itself to be no friend to Israel, and the Liberal Democrats who hope to play the spoilers on May 6 is home to an even greater proportion of Israel-haters than is the Labour hard-Left. As for the Conservatives, JID gives them some credit: “The tone of party pronouncements on Israel are notably sympathetic. William Hague, a former party leader and now Shadow Foreign Secretary, criticized Labor for not voting against the Goldstone Report.”

However, Melanie Phillips points out in her Spectator blog that Tory leader David Cameron, whom she prefers to call “David Obameron,” is promising to line up as a loyal soldier in the Obama administration’s diplomatic war on Israel. As evidence she cites the following in an interview with Cameron in the Financial Times published on March 31 (subscription required):

FT: Yes. You managed to tell Mr. Netanyahu that he might want to revise his position on settlements.

DC: I have. Unlike a lot of politicians from Britain who visit Israel, when I went, I did stand in occupied East Jerusalem and actually referred to it as occupied East Jerusalem. The Foreign Office bod who was with me said, most ministers don’t dare say. So, yes, I thought I had quite an argument when I was in Israel with Tzipi Livni about settlements and I think Obama is right to take a robust line. I think we have to but it is depressing how little progress is being made right now.

So Cameron — whose skimmed-milk New Age version of conservatism may wind up pulling defeat from the jaws of victory in the coming ballot — not only brags about his disdain for a united Jerusalem and his disagreement with the leader of the opposition to Israeli Prime Minister Benjamin Netanyahu’s government on the fate of Jerusalem but expresses support for Obama’s diplomatic offensive against the Jewish state. It may well be that trying to identify himself with Obama may be good British politics right now, but this stand seems to conform with the rest of Cameron’s worldview, which is anything but friendly to Israel or the long-term interests of the West. Barack Obama may well be able to count on him in his campaign against Israel while doing nothing about the nuclear threat from Iran.

The bottom line: while some American conservatives may instinctively favor the defeat of a Labour government by the party of Margaret Thatcher, David Cameron is no Thatcher. As for friends of Israel, they’ve no rooting interest at all in the outcome.

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The Next Defense Crunch in Britain

Contracting out in defense is an important public and political issue in both the United States and Britain. When based on the proper principles, contracting out allows the government to draw on private-sector skills and resources to deliver services more efficiently. But in Britain, Labour’s sketchy accounting methods for the cost of these contracts has created another snare for Britain’s defenses.

These contracts, of course, commit the government to future costs. But because Labour has played accounting games that put these contracts on the department books but not the national ones, Britain’s total future obligations  will be larger than those shown on the country’s overall accounts.

Defense isn’t the only department that’s contracted out, of course. Health has done the same thing.  But all the major political parties in Britain are committed to ring-fencing expenditure on health. But the big future obligations certain to show up on defense departmental accounts ensure that when it comes time to examine which departments need to scale back their future spending, the weight will fall even more heavily on defense.

In essence, the Labour government has created another affordability crisis in defense – one that it can now use as yet one more reason to reduce defense spending even further.  Already, over the past few months, the case – a largely spurious one – has been made by Bernard Gray’s report on procurement for imposing more cuts on the Ministry of Defense, on the grounds that its future spending plans are unaffordable.

Even on its own merits, this is a painful confession of governmental incompetence: Labour has been in power since 1997, and yet it now argues that the Ministry has somehow, mysteriously, developed plans it cannot afford to fund.  It’s now setting itself up to play the same game all over again: use the contract spending to which it had once agreed to accuse the Ministry of unaffordable future profligacy.  That would be a bad move at any time, but it’s particularly unbearable when British forces are operating alongside U.S. ones in Afghanistan.

Could it happen here?  Well, not easily.  U.S. policy requires programs to be fully funded up front, so the costs are on the books. The purpose of the U.S.’s Military Housing Privatization Initiative – to improve military housing – is similar to some of Britain’s deals, but by and large the MHPI has been well-administered, successful, and properly accounted for.

Still, in an era of justified unhappiness about the size of the federal deficit, coupled with the administration’s desire to spend, the attraction of taking costs off the books is obvious.  If the Obama administration starts to question the “on the books” requirement in a major way, the British experience suggests we should start worrying.

Contracting out in defense is an important public and political issue in both the United States and Britain. When based on the proper principles, contracting out allows the government to draw on private-sector skills and resources to deliver services more efficiently. But in Britain, Labour’s sketchy accounting methods for the cost of these contracts has created another snare for Britain’s defenses.

These contracts, of course, commit the government to future costs. But because Labour has played accounting games that put these contracts on the department books but not the national ones, Britain’s total future obligations  will be larger than those shown on the country’s overall accounts.

Defense isn’t the only department that’s contracted out, of course. Health has done the same thing.  But all the major political parties in Britain are committed to ring-fencing expenditure on health. But the big future obligations certain to show up on defense departmental accounts ensure that when it comes time to examine which departments need to scale back their future spending, the weight will fall even more heavily on defense.

In essence, the Labour government has created another affordability crisis in defense – one that it can now use as yet one more reason to reduce defense spending even further.  Already, over the past few months, the case – a largely spurious one – has been made by Bernard Gray’s report on procurement for imposing more cuts on the Ministry of Defense, on the grounds that its future spending plans are unaffordable.

Even on its own merits, this is a painful confession of governmental incompetence: Labour has been in power since 1997, and yet it now argues that the Ministry has somehow, mysteriously, developed plans it cannot afford to fund.  It’s now setting itself up to play the same game all over again: use the contract spending to which it had once agreed to accuse the Ministry of unaffordable future profligacy.  That would be a bad move at any time, but it’s particularly unbearable when British forces are operating alongside U.S. ones in Afghanistan.

Could it happen here?  Well, not easily.  U.S. policy requires programs to be fully funded up front, so the costs are on the books. The purpose of the U.S.’s Military Housing Privatization Initiative – to improve military housing – is similar to some of Britain’s deals, but by and large the MHPI has been well-administered, successful, and properly accounted for.

Still, in an era of justified unhappiness about the size of the federal deficit, coupled with the administration’s desire to spend, the attraction of taking costs off the books is obvious.  If the Obama administration starts to question the “on the books” requirement in a major way, the British experience suggests we should start worrying.

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Britain’s Pirate Problems

The London Times reports that the Royal Navy has been ordered by the Foreign Office not to detain pirates because doing so “may breach their human rights.” The problem, you see, is that many of these pirates operate off Somalia, and the Somalian punishment for piracy, under sharia, is the removal of heads, arms, or other appendages. Such punishment would not only be inhumane–it would potentially entitle the pirates to asylum in Britain.

Gilbert and Sullivan could hardly have done it better: poor Frederick, the Dudley Do-Right hero of Pirates of Penzance, wriggles out of his indenture to the Pirate King by aiding (however ineffectively) in his capture. The Foreign Office can’t even manage this: in response to Conservative criticism, the best Britain’s diplomats could come up with was the claim that “There are issues about human rights . . . . The main thing is to ensure any incident is resolved peacefully.” (No wonder the Iranians found it so easy to knock off the Royal Navy last year.)

The Foreign Office’s grasp of law is as feeble as its morality. Piracy is a universal crime: indeed, it is the first universal crime, older even than slave-trading. All states have a duty to punish it as harshly as their law allows. This obligation is included in many relevant international conventions, including the 1958 Geneva Convention on the High Seas, to which Britain has been party since 1960, and the 1982 Law of the Sea Convention, to which Britain acceded in 1997 by act of the Labour Government.

The Foreign Office’s delusion has two parts. One is a simple error: that pirates captured on the high seas have to be returned to the nearest country for trial. The second fallacy flows from the first. It’s more subtle, but it’s typical and pathetic: that international law descended from on high, and we have to obey all of it to the letter even if the other guy–Somalia, in this case–is unwilling or unable to live up to its commitments. Nonsense: “international law” is a fancy phrase for treaties between states, or for treaties that establish institutions that arbitrate between states. If Somalia cannot control its own waters–never mind the high seas–we are released from any obligation to do anything with them.

Britain–and all the other nations participating in the various anti-piracy patrols around the world–should exercise a healthy unilateralism. A blanket declaration that all pirates will be pursued, shot if they fail to surrender, and held over for trial if they are captured would do lot of good. Putting that policy visibly into practice would do even more. And no, I don’t rule out returning pirates to Somalia for trial: I’m not a fan of sharia, but in this case, it may just have found punishments that fit the crime.

The London Times reports that the Royal Navy has been ordered by the Foreign Office not to detain pirates because doing so “may breach their human rights.” The problem, you see, is that many of these pirates operate off Somalia, and the Somalian punishment for piracy, under sharia, is the removal of heads, arms, or other appendages. Such punishment would not only be inhumane–it would potentially entitle the pirates to asylum in Britain.

Gilbert and Sullivan could hardly have done it better: poor Frederick, the Dudley Do-Right hero of Pirates of Penzance, wriggles out of his indenture to the Pirate King by aiding (however ineffectively) in his capture. The Foreign Office can’t even manage this: in response to Conservative criticism, the best Britain’s diplomats could come up with was the claim that “There are issues about human rights . . . . The main thing is to ensure any incident is resolved peacefully.” (No wonder the Iranians found it so easy to knock off the Royal Navy last year.)

The Foreign Office’s grasp of law is as feeble as its morality. Piracy is a universal crime: indeed, it is the first universal crime, older even than slave-trading. All states have a duty to punish it as harshly as their law allows. This obligation is included in many relevant international conventions, including the 1958 Geneva Convention on the High Seas, to which Britain has been party since 1960, and the 1982 Law of the Sea Convention, to which Britain acceded in 1997 by act of the Labour Government.

The Foreign Office’s delusion has two parts. One is a simple error: that pirates captured on the high seas have to be returned to the nearest country for trial. The second fallacy flows from the first. It’s more subtle, but it’s typical and pathetic: that international law descended from on high, and we have to obey all of it to the letter even if the other guy–Somalia, in this case–is unwilling or unable to live up to its commitments. Nonsense: “international law” is a fancy phrase for treaties between states, or for treaties that establish institutions that arbitrate between states. If Somalia cannot control its own waters–never mind the high seas–we are released from any obligation to do anything with them.

Britain–and all the other nations participating in the various anti-piracy patrols around the world–should exercise a healthy unilateralism. A blanket declaration that all pirates will be pursued, shot if they fail to surrender, and held over for trial if they are captured would do lot of good. Putting that policy visibly into practice would do even more. And no, I don’t rule out returning pirates to Somalia for trial: I’m not a fan of sharia, but in this case, it may just have found punishments that fit the crime.

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