Sunday, June 20, 2010

Being A Londoner: Three Stories, One Truth

The British Media spent most of the last month complaining out the 'anti-British' rhetoric in America. Led by President Obama, many senators and public intellectuals were overtly critical of BP's handling of the Oil spill in Mexican Gulf. The company looked clueless on how to contain the spill and several attempts failed and only a somewhat partial solution seems to have been achieved after two months of efforts. The extent of the disaster makes Exxon-Valdez looks tiny - one Exxon-Valdez a month, as one of the TV commentator puts it. The problem in the British media was none of this disaster, and the fact that this will severely affect the ecosystem and livelihood in an entire region, but that the American rhetoric on BP's responsibility threatens British jobs and Btritish dividends etc.

True, BP is one of the premier companies in Britain. One pound in each seven pounds paid in dividend by British companies come from BP. They employ thousands of British workers, and serve as a somewhat national symbol of pride. But, BP is not Britain. There is no reason to equate the two. They may be struggling to contain the spill, which is exceptionally difficult many kilometers below the sea level, but the point is that this should not have happened at all. BP has an appalling safety record, and their track record does not inspire confidence that they are capable of taking the responsibility of sensitive assets like the Deepwater Horizon.

In fact, the last week's incidents underscored BP's callousness and subverted priorities. The week started with a media-induced [no doubt orchestrated by BP's spin doctors] highly publicised call from David Cameron to President Obama, implicitly to convey the British dismay at BP's treatment in America. Middle of the week, it was BP's CEO, Tony Hayward, facing a Senate hearing, dishing out more 'I don't know' answer than anything else. Finally, the week ended with photographs of him in a Yacht race, on Isle of Wight's pristine waters, taking a break and hobnobbing with other millionaires enjoying the Sun. In the meantime, BP's partners in American accused it of callousness and putting financial priorities ahead of safety concerns. We should have already known that - the dividends to us are more important than what happens to the sea and the creatures that live in it - and this story should not stir us any further.

The other developing story of the week was the Tory emergency budget, due on the 22nd June, and the build-up to that. The treasury secretary, Danny Alexander, had the honour of delivering a prelude, cutting pledges made by the Labour government, and setting the stage for deeper cuts and structural shift of priorities to delivered next week. David Cameron made the right noises, followed by his Comrade in Arms and Deputy, Nick Clegg, that the state of public finances are worse than previously thought. George Osborne topped it up on Sunday stating that Britain faces a ruin unless tough steps are taken.

The story of tough steps are interesting. In essence, this means a relative easing of the squeeze on the rich, those people who live on estates and dividends, and instead, cutting various working class benefits, limiting what the pensioners get and raising VAT, which will affect the lower income families the hardest. Instead of raising the National Insurance, which the labour government proposed and Tories vigorously opposed, they will reduce national income contributions, for the employers. All this, because the government believes that this is going to be a private sector led recovery, and suddenly Britain will become an 'opportunity society'.

So, in essence, finally Keynesian theories have been beaten back, and we have swung again back to monetarism. It is surprising how little it took for us to go back to the same theories which got us into trouble, how soon we gave up our anger of banks and gave in to them. And, indeed, I am amazed by the media indifference to the Cameron's volte face. He fought the election bandying that he is the voice of hope whereas the hapless Brown was trying to talk about perilous state of public finances, and he is turned to the usual conservative fear-mongering the moment he got the power.

Anyone with sense can see the conservative nonsense about Britain becoming Greece. Greece got into trouble because the economic fundamentals were weaker; Britain leads the world in creative industries, education, design. Besides, Greece did not have the currency flexibility that Britain has. As long as the debtors are willing to lend money to Britain and are willing to buy British assets, the British economy is not in trouble. Did we see a lack of appetite to buy houses or businesses in London from the millionaires and billionaires of the world? Do we seriously believe that investors doubt Britain's ability to pay its debts in the short run? But, all this is indeed very handy to force a political change, like the switch from pre-election hope to post-election fear mongering, and David Cameron and his pals are currently committed to give Britain over to the City kinds who believe dividends are more important than health and education of working class babies.

Finally, the English football, which came to a rather sudden stop last week after a listless display against Algeria, one of the weaker teams in this world cup. The celebrity led English football team was out of ideas and now facing a first round extinction from the world cup which the city-gamblers expected them to win. It was celebrity all over, with Princes William and Harry with their entourage in South Africa to prop up the team and even David Beckham, who is not playing, available at hand to add to the star attraction. If religion was the opium of the people in Marx's time, football it is in our's, and a World Cup debacle will be the last thing that the City will welcome.

But, if football has to survive and enchant us, it should have less to do with what the City wants and rather thrive on the Latin American football, which is enjoying a sort of resurrection. If Britain has to regain its self-respect, it will have less to do George Osborne's budget than the inventiveness of impoverished British students against whom he is waging his war. And if Britain has to survive and move into the future, it has to survive despite BP, not because of it.

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