Blogoir: January

At last. Someone intelligent looking at first principles:

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation...

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing...

But should not personal responsibility be encouraged in the political sphere too?

Recalling my posting a few days ago about moral hazard I espied this glum account of the Eurozone's woes:

For a long time, they all looked the same. The reckless and the virtuous, the sneaky and the upfront, all the member countries of the euro-area were treated identically, or nearly so, by capital markets. Bond spreads were minimal, as if sharing the same currency had eliminated all the differences between them.

Not any more. Having reached one percentage point in October and two in December, the bond spread between Greece and Germany continues to widen. Ireland is not far behind, and Italy and Portugal are hot on its tail. As for Spain, it has just been downgraded, like Greece.

It is not too difficult to see why Greece is a worrying case. It has built up a very high level of public debt (94% of GDP), a whopping current-account deficit (13% of GDP, three times higher than that of the US) and a rate of inflation regularly higher than its partners'.

A striking opening line to characterise the Eurozone's members: the reckless and the virtuous, the sneaky and the upfront.

And an elegant summary of the core 'moral hazard' point, namely that undue risks can be run by an organisation expecting that if things go wrong it will not have to pay the full cost.

Thus those EU countries which might be described as reckless and/or sneaky have had a marvellous few years since the Euro was created, behaving recklessly and/or sneakily in the breezy confidence that someone else who is virtuous and upfront (ultimately a large northernish EU country, beginning with G and run by disciplined people) will pick up the tab.

But these tabs can get very expensive, even for the G-landers.

So, someone has to step in and stop the rot before things get really out of control. Which in this case looks to mean giving Greece some very sour financial medicine.

But who can do this?

Calling in the IMF would reveal ghastly weaknesses in the whole Euro project.

And calling in eg the Germans to run the show for a while to compel some proper discipline at last might be seen by some people (eg Greeks) as an unacceptable affront to Greek pride and sovereignty.

So, as Jean Pisani-Ferry says in the linked piece above:

... It also shows that building a firewall does not mean that one can do without the fire brigade. But out of a reluctance to centralise and an aversion to mutualise debt, European countries have so far refused this hurdle.

So, the question. What actually is Greece?

A sovereign country whose government and population must take on the chin the full costs of any policy sneaky recklessness which the merciless markets lay at its front door?

Or something not that?

If the latter, who sorts it all out? And pays the moral hazard bill?

As Ayn Rand put it, in arguably the greatest moral-political insight ever written:

“We can evade reality, but we cannot evade the consequences of evading reality.”

We customers just sit back and let the torrent of astonishing cheap electronic devices keep coming, each generation more wonderful than the last.

It's all down to Moore's Law: crudely speaking, the idea that every two years or so the amount of computer bang you get for your buck in fact doubles (a true 'positive feedback' - each new round of invention hugely expands our ability to discover the next ones).

Remember the old fable of the Arab prince who won a bet against the Sultan and was asked to name his prize? "Nothing much - just put one grain of rice on a chessboard square, two grains on the next square, four grains on the next square, and so on until you have filled the board..." 

"Granted, my modest son..."

The first row of squares gives 255 grains. By the end of the second row the prince has over 65,000 grains. After that the numbers spiral upwards unimaginably fast until the whole planet is covered in rice.

One noteworthy feature of this powerful doubling sequence is that each doubling gives you the combined weight of all the previous doublings + 1 (eg doubling from 8 to 16 = 8+4+2+1+1).

When this applies to computer power, we are now somewhere in the middle of that chess board - and still going strong. Each couple of years sees new innovations giving us the combined computer power of all previous computer-power jumps, plus a bit more for luck.

It is impossible for most people to know what is going on inside their micro-chips. But the people plunging money into the research which drives forward Moore's Law have to be remarkably smart, in both technical and legal terms - it is one thing to find a brilliant new application, another to stop others stealing and marketing your idea at top speed.

A long-winded way of proposing that you read this excellent piece on the looming battles between Apple and Palm both in the market-place - and in the patent courts.

A new Palm Pre, please, when they come out in the UK.

Grotesque as it seems even to express things in such a way, there are only two questions about the mass destruction of European Jews during WW2 (the Holocaust):

• Did it happen?         Yes/No
• How to assess it?    Good/Bad

The mainstream line for anti-semitic and anti-civilisational fanatics of all stripes has been to say No to the first question, thereby avoiding the need to give any substantive view on the second.

Take the UK's Catholic Bishop Richard Willamson. Has any educated, urbane person ever before been filmed proclaiming such creepily shifty dishonesty?

Gripping - in a terrifying, bland way:

On the other hand, we now see also something whose bottomless ghastliness is probably new to decent people in what might be called the West. The claim that Yes, the full-scale Jewish Holocaust happened - and that it was in fact Good that it did.

Take 'Egyptian Muslim cleric' Amin Al-Ansari, on TV: 

The video shows all sorts of jumbled-up horrible images from WW2 (piles of bodies, gas cannisters, weeping Jewish women, skeletal victims) accompanied by his cheery, rambling narrative describing how this fine carnage was deservedly brought upon the Jews by their own 'corruption'. All being well, he argues, the Muslims will dish out a lot more of the same to the Jews to teach them their lesson, once the Muslims are 'strong' again.

This strange smirk of a man is not trying to make any sense or reveal any truth. He rather is part of the Deep Negotiation going on in that part of the world, and not only there.

This video says to Israel and to the West:

Give in. Surrender. Forget it. We must defeat you. You build your civilisation on some so-called values: Truth, Limits, Responsibility. It is doomed to fail.

Because you believe in something - but we believe in Nothing. And lo, the power of Nothing has no end, and it must prevail.

An interesting job for the State Department in Washington - drafting a letter to deal with that phenomenon.

Is the best hope for mass communication in a globalised world a boiled-down version of the English language called Globish?

A Frenchman Jean-Paul Nerriere has been trying to codify this phenomenon into some 1500 words and simplified expressions. The crafty French sub-plot seems to be to concede a historic linguistic defeat to English, but avoid utter national humiliation by divorcing that outcome from the English people and culture.

Yet quite how simplified is Globish?

Here is Mark Antony as per Shakespeare:

Friends, Romans, countrymen, lend me your ears;
I come to bury Caesar, not to praise him;
The evil that men do lives after them,
The good is oft interred with their bones,
So let it be with Caesar ... The noble Brutus
Hath told you Caesar was ambitious:
If it were so, it was a grievous fault,
And grievously hath Caesar answered it ...

And in Globish:

Friends, Romans, countrymen, lend me your ears;
I come to bury Caesar, not to praise him;
The evil that men do lives after them,
The good is often buried with their bones,
So let it be with Caesar ... The stately Brutus
Has told you Caesar wanted to be king:
If he said that, then it was a deadly mistake,
And it was deadly for Caesar today ...

The Globish version loses the poetical edge and some of the precise sense of the original, but anyone mastering the vocab and grammar of that version is well on the way to grasping the original anyway.

What caught my eye was this exellently wrong attempt to show how this piece of allegedly American English would be translated into Globish:

Less than twelve percent of mankind was born in an Anglophonic country and the others are hung up in a major way when speaking to Anglophones. They are bummed out about potentially falling on their faces in normal intercourse; they are just not getting it; and they don’t feel they are on the proper wave length.

It can make them feel embarrassed. But, when they shoot the breeze with non Anglophones, the wicket isn’t sticky any more...

In Globish:

However, 88% of mankind (humans) was not born in an English-speaking country. Those persons usually do not feel comfortable when they need to discuss with native English speakers. They are concerned about making mistakes, understanding with great difficulties, and being understood.

They can feel put down. But when they discuss with non native English speakers, things are much better.

The so-called Globish version reads like good, solid English to me. Again, anyone at that level of English merely needs to add more vocab to be close to outstanding.

Hélas for the French, they fail to grasp the subtleties of Anglo-Saxon sporting metaphors in the US and UK.

To ascribe to Americans our obscure English idioms like a 'sticky wicket' (apparently without grasping what they mean) , c'est pas le cricket.

The BBC:

US President Barack Obama has used his first formal TV interview since taking office to reach out to the Muslim world - saying Americans are not its enemy.

Most 'respectful'.

Not that many similar broadcasts by his predecessor made much difference.

Meanwhile that vasty Stimulus Package is working its way through the US system. A gloomy but convincing analysis, with some helpful graphs:

Or consider the gigantic—as in close to $100 billion—amount of extra federal money these guys are proposing to spend on education. Study after study has shown that, at a minimum, there is no clearly demonstrable educational benefit from more aggregate spending on schools ... We will spend $100 billion on schools and not expect kids to read, write or do math any better. How can this be wise?

Hopeless change?

Tom Miller (Widely settled law graduate, novice new media geezer. Apologist for equality. Influenced by both traditional european social-democracy and bits of post-marxism) plunges in:

One of the more ridiculous arguments often seen flying around the blogosphere, often from Libertarian Ron Paul fans and other idiots, but just as often from wingnut Tories, is that Hitler was somehow 'left-wing', on the basis that he followed a philosophy of statism.

... Socialism=big state, Hitler=big state, therefore Hitler=Socialism.

This argument is patently ridiculous, of course. Socialism has often backed a big state, but this is for a reason; a big state is one of the many possibly effects of being left wing, rather than the only thing that the left stands for ...

Saying someone is a socialist or 'left-wing' (in this case Hitler) because they believe in a big state is like saying someone is Chinese because they have black hair.

More:

Left and right are about whether you believe that the state of social relations should be more equitable and conducted on a more egalitarian basis (this also applies to most liberals); believing this puts you left of the centre line.

If you believe that social relations are either fine as they are, or irrelevant to politics, you are essentially a conservative, and to the right of the central line.

Tom's mistake lies in not reading Liberal Fascism (which describes in great length and detail the openly socialist origins and aspirations of Mussolini and Hitler), and so asking the wrong questions. Or, rather, second order questions.

It all has to start with human nature and the ways in which human ingenuity and creativity express themselves.

If talents are distributed 'unequally' (as they have to be by the random play of genetics), it follows that different people will be able to do different things. Some people will be more productive and creative and efficient than others. They will create products and ideas (together or in teams) which did not exist until they came along and created them.

Those people who did not create those things are lucky. They tend to get the benefit of those inventions at ever cheaper prices as time goes by (see eg once luxury items such as a house and regular food, now a 21-speed bike and an iPod). 

Thus the inventors/creators and the most diligent contribute their skill and effort to others. Those others of course are not passive - they too trade their skills and labour as best they can.

The primary political question is therefore a moral question. Does an individual own the product of his and her free mind and energy? Or does 'society'?

Putting it another way, under what circumstances am I able - or 'entitled' - to insist that someone else should give me something I want, and then call on others (the state) to use force (taxes, backed by the threat of imprisonment) to grab it for me?

One great tradition had it that the authority to answer these questions came from God to man via Kings. The more recent tradition established by the French and Russian Revolutions and then the Nazis too proclaimed that the answer came from Man, and that those who stood for Man were entitled to do whatever it took to achieve the results they saw fit - not least by killing man in huge numbers for the sake of Man.

The dominant form of social democratic Leftism these days, to which Tom Miller looks to belong, is a moderate tributary of this collectivist tradition which (as he helpfully puts it) wants to 'force greater equality' (sic).

The Zimbabwe example is interesting. When colonialism ended there was evident inequality in land ownership. Mugabe with his Africanist obsession with land issues is ending his rule in a lunge to end this inequality by chasing pink-skinned owners off their land. Yet those people also gave that country and its people all sorts of other good things - discipline, knowledge, order, predictablity, wisdom and so on.

The result? Utter collapse, with those who have been most senior in 'forcing equality' grabbing what they can and hiding it away overseas.

Rather like the goings-on in the UK now, in fact, as the grim results of Big Left Government prostituting itself to Big Money and Big Stupidity reveal themselves.

I still stand by this passage on the emergence of the Machine Age:

... how hard it is now to grasp the scale of the extraordinary emotional impact brought about by all that unprecedented new Bigness.

Huge impersonal machines. Stunning machine noise. Unimaginable machine speeds. Warfare waged by machines. Machines flying. All from European and American white-skinned genius, leaving supposedly primitive blacks and browns and yellows trailing far behind.

These inventions and the social upheaval they brought amazed intellectuals and caused a whole new way of political thinking to emerge: that society too was in essence a single vast machine, capable of (and indeed depending on) being regulated and controlled by the intellectual elite. Human beings became ‘the masses’, mere cogs toiling for a collective ‘higher’ purpose... Communism, Nazism and Fascism alike were ideologies based on Machine Age Bigness. They shared an explicit socialist/collectivist core, aimed at submerging the individual in a choreographed mass. They all promoted revolutionary violence and calculated lies to try to seize the moment and control the past, the present and future...

And my own questions:

How dazzling is President Obama? So dazzling that he didn’t merely give a dazzling inaugural speech. Any old timeserving hack could do that. Instead, he had the sheer genius to give a flat dull speech full of the usual shopworn boilerplate.

Mark Steyn. Who else?

When I try to explain the secret of Good Writing, I argue a lot of it boils down to short, sharp sentences.

But then there's also this majestic thought, 63 words ripp'd asunder by two puny commas:

At a stroke, he not only gently lowered the expectations of those millions of Americans and billions around the world for whom his triumphant ascendancy is the only thing that gives their drab little lives any meaning, but also emphasized continuity by placing his unprecedented incandescent megastar cool squarely within the tradition of squaresville yawneroo white middle-aged plonking mediocrities who came before him.

When you have mastered the rules, break them.

What about the Obama inconsistencies already showing in some policy areas?

Doesn’t matter that the new CIA honcho is open-minded on the virtues of waterboarding. Doesn’t matter that the new treasury secretary who’s gonna stick it to those greedy fat cats who don’t pay their fair share of taxes is a greedy fat cat who didn’t pay his fair share of taxes.

If one night in Bangkok makes a hard man humble, one night in D.C. makes a cool man boring. But it doesn’t matter, because Obama’s so cool even his boringness is hot...

Indeed. Read on.

I have mentioned Dick Holbrooke several times. See eg this early posting about his sheer physical presence. And this later one when Radovan Karadzic was arrested.

Now he has been appointed by President Obama to lead US policy on Pakistan and Afghanistan.

That lot should keep him busy.

I attended a meeting with him at the FCO in 1999 to discuss Balkan issues. Some of his US colleagues sitting next to him were literally twitching with anxiety, lest he turn on them for some mistake and flick them into professional oblivion.

His negotiating style is uniquely aggressive, but with deft and penetrating psychological thrusts.

Back in Moscow in 1995 after dinner at the US Ambassador's Residence I watched as he sat on the sofa studiously winding up my boss Pauline Neville-Jones with some not-so implicit sexistly patronising insinuations. Pauline of course did not rise to the bait, but he knew that she would not do so and enjoyed watching the spectacle of her containing her annoyance, while she in turn seemed to know that he was enjoying that spectacle and so inwardly seethed all the more.

At the London meeting he started to open his briefcase, then rudely took a mobile phone call ("sorry, that was President Obasanjo") to put us in our place.

Continuing with the briefcase he laboriously started to pull out some papers, then began in a deeply phoney woeful tone :

"I'm disappointed. I'm very disappointed. Really. I am. You people are not helping us here. We thought you'd be with us, and you're not..."

And so on, accompanied by all that twitching from the US Embassy people with him.

You needed nerves of steel to hit back hard and well against this sort of thing, which (it must be said) most UK diplomats did and do not possess. At one point I boldly interjected to say that something he had said was just not right, so he promptly changed the subject.

I have often wondered why precisely we Europeans can not produce anyone like Holbrooke to lead our diplomatic effort with bravura and amusing confidence, plus ruthless bullying/intimidation.

Partly it comes from the fact that in the US system a Holbrooke draws his authority directly from the White House, and the White House can pull lhard evers round the world which others just do not have.

But it is also a matter of style. We on this side of the pond seem to think that such a massive can-do and goddammit-will-do American attitude is just a bit ... vulgar? 

Lacking the nerve required to hit a target head-on, we do prefer rather more indirect - shall we say perfidious - methods. We try to make up for our lack of force and raw toughness with exaggerated cleverness. Sometimes ill-disguised with a fatuous eccentricity and/or foppishness to make it seem even more clever.

That said, Holbrooke is pretty unique even by US standards. Here is a shrewd piece written by a US fan:

Richard Holbrooke triggers incredible passion, some of it negative, among foreign policy professionals. He's a Democrat, but many don't understand why he's not a Republican. Dems, some argue, are supposed to be about achieving moral goods in the world along purist pathways of good behavior and enlightened intentions. To some Holbrooke seems to be someone willing to deploy any tools that it takes to achieve his (and America's) ends, and that puts him at odds with many in the so-called global justice community...

If Holbrooke brings some hard-nosed common sense to the 'so-called global justice community' he maybe is not all bad. And as the article points out, it is hard not to see the Dayton Peace Accords as some sort of significant moral victory with Holbrooke as the key driving-force accomplishing it.

Anyway, two people to pity are the US Ambassadors in Afghanistan and Pakistan.

They know what is going to hit them. 

An animated discussion about our financial woes over dinner in Krakow, my colleague and I allocating core blame differently.

He (accountant) blamed technical accountancy practices for allowing exotic transactions which gave paper profits increasingly detached from reality.

I (former civil servant) blamed the government for not spotting the bigger picture trends and taking action to curb irrational accounting - which is after all what they are paid to do, namely set the overall rules (and intrinsic incentive arrangements).

The example given was this. X takes out a mortgage. The bank calculates that over 20 years it will make a profit of £y per annum, totalling £z overall. The bank sells that 'box' of long-term profit to someone else for a sizeable sum. In accounts terms the bank has made a sudden nifty profit for this year's tax return. That asset box in turn can be sold on. And on. And on. 

But what is really happening in all this? The further the financial transactions drift away from the real-life prospects of the person taking the loan, as computers and accountants come up with ever more ingenious ways to manipulate the likely cash-flow, the more the whole system starts to depend on the assumptions in the computer programme.

Those assumptions may be unknown to the people in the transaction chain, or unwise, or both.

In a word, a systemic risk element is growing fast. Until some of the deepest assumptions collide with real life - as they must, sooner or later - and down we all go, like those cartoon characters who cheerily march out beyond the cliff edge into thin air.

This captures it all elegantly:

When we use data to take financial decisions, decide how much capital to keep and so on, we should be aware that the data we use contains some information but that relationships that hold one day will not hold precisely the next day. We should stand back and think conceptually about the risks that financial institutions are taking.

... But who cares about trust and reputation when we believe that everything will be looked after by the regulators or by deposit insurance?

As far as a company is concerned, compliance with regulation has become more important than trust. The market has been allowed to generate crude economic efficiency, but trust has been crowded out by regulation.

Spot on.

Right at the heart of it all is the simple yet profound idea that if you have the power to force through an outcome, your decisions are unlikely to be as sensible as those of someone who has to use persuasion to get results. The notion of so-called moral hazard:

Financial bail-outs of lending institutions by governments, central banks or other institutions can encourage risky lending in the future, if those that take the risks come to believe that they will not have to carry the full burden of losses.

Lending institutions need to take risks by making loans, and usually the most risky loans have the potential for making the highest return. A moral hazard arises if lending institutions believe that they can make risky loans that will pay handsomely if the investment turns out well but they will not have to fully pay for losses if the investment turns out badly.

Essentially, profit is privatized while risk is socialized.

Which is why the etatist, clumsy solutions proposed now by Guardianistas such as Will Hutton will make everything far, far worse.

Because all that will happen is that risk taking will become even more stupid. The state must simply grab more and more, as it flails around trying to solve the problems it has created.

The whole UK government approach run by Gordon Brown for twelve years turns on a Micawberish "something will turn up" bet, which in practice means dumping the costs of Labour incompetence selfishly on millions of innocent people. Namely our children.

These issues are difficult. We should take a strategic view on how we want to manage them.

So here's the (only) question for the public. Do you favour:

A:  Bigger government, more services?   Or

B:  Smaller government, fewer services?

The answer.

A sturdy piece by Harry Phibbs who got to the point about David Miliband's misplaced informality and linked it to Blairish 'anti-stuffiness' before I did:

In a triumph of style over substance, Blair declared a moral crusade against stuffiness in our domestic affairs. Not being addressed as Prime Minister was key to the decision-making process - of a piece with summit meetings on sofas without notes being taken and interruptions to strum on a guitar or change Leo's nappy.

Why does it matter how people address each other? Thus:

Calling someone 'Mr Smith' or 'Mrs Smith' reflects a mindset, a self discipline in the way we regard them, a proper sense of distance and respect.

A revolting habit developed latterly in the FCO and DFID of senior officials archly referring to Ministers by their first names ("Of course I needed to put this submission to Clare, as she and Robin were not sure what Gordon expected of Tony"). In DIFD it reached the point of formal papers being addressed to Clare (Short) - maybe the gruesome practice continues under current management.

It is not easy to put one's finger on precisely why this sort of thing is annoying and stupid.

But perhaps it reflects a sense of treating public life as a sort of post-modern lighter than air team-building exercise, an arrangement rather like a group of friends running a mediocre bowls club, where all they have to do is to sort out their own modest business. It plays down to vanishing point Seriousness and Responsibility.

One further point. In my experience dealing with successive waves of Ministers and MPs visiting the countries where I was posted, 'Old Labour' and Conservative visitors would not make this sort of protocol mistake. Instead it typically was the cynical yet bright-eyed New Labour types who wanted to project a sense of close friendship and solidarity - whether the subject of their informality liked it or not.

Most readers of this blog (I impertinently assume) do not know too much Polish. In Polish most adult people address each other via a strict third person form, even when they have worked as colleagues for years: "Would Madam Maria care for some coffee?" "I can not agree with Sir's assessment of this situation."

This seems bizarre, contrived and old-fashioned when one embarks on learning the language.

Yet it does create a real sense of people treating each other as responsible adults with a higher expectation of mutual good manners accordingly, albeit perhaps at the price of a certain wider collective pomposity.

So, Memo to next government:

Bring back formal titles and traditional courtesies in senior affairs of state. This, by the way, includes making arrangements for senior visitors to government buildings to be met swiftly and politely - another area where FCO performance has crashed in recent years.

Oh, and before attempting to chat to foreign leaders as if they were a friend in a pub, do try to think about the fact that, astounding as it may seem, they may well not be at one with our oh-so-modern comradely British ways.

Here are the entrants for the first Orwell Prize for blogs.

I find myself on the list sandwiched between Charlotte Gore (Reluctant LibDem) and a splendid blog extolling the Greatness of Tony Blair, the rather one-dimensional subject-matter proclaimed with verve and gusto.

Archbishop Cranmer may be hard to beat: stylish, perceptive and energetic.

And there's Innerbrat: female, bisexual, atheist, white, cissexual, honest.

Hmm. Cissexual? Hard to tell from the definition whether it is fun or a problem:

... people who are not transsexual and who have only ever experienced their subconscious and physical sexes as being aligned

The competition is meant to look for both excellence of style and excellence of content. Quite a job for the judges.

President Obama's inauguration speech of course attracted huge interest. And intense analysis.

See eg this breakdown of how often he used the words I, You, They and We.

And this subtle look at it from the point of view of Greek rhetoric, pointing out pathos, bathos, logos and even anaphora ("the repetition of words at the start of neighboring clauses").

On the substance, I liked some lines for their sheer American-ness - ideas shared by Democrats and Republicans alike, which are so hard to hear in Europe:

... greatness is never a given.  It must be earned. 

Our journey has never been one of short-cuts or settling for less.  It has not been the path for the faint-hearted, for those that prefer leisure over work, or seek only the pleasures of riches and fame. 

Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long rugged path towards prosperity and freedom.

Greatness. What a elitist notion. First in that list? Risk-takers. Quite right too.

This is nice:

But those values upon which our success depends -- honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old.  These things are true.  They have been the quiet force of progress throughout our history.

Deftly put:

To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.  (Applause.)

On the other hand, this:

The question we ask today is not whether our government is too big or too small, but whether it works -- whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. 

Where the answer is yes, we intend to move forward.  Where the answer is no, programs will end. 

And those of us who manage the public's dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.

The very idea! Ending state programmes which do not work!

Try stopping the funding of vast banners adorning EU buildings in Brussels proclaiming the glories of the EU, such as Happy New Year greetings in all the EU languages, many stories tall. Who gets the lucrative contract to produce these fatuous things? Why are they in the budget line at all?

The problem is that President Obama is wrong. We do need to keep asking whether government is too big or too small.

Because if government gets beyond a certain scale it stops working well. Some tipping-point effect is surely at work:

I think a threshold or tipping point exists in the ratio between the political power of those who pay taxes and those who consume taxes directly. After that tipping point is reached, those who pay taxes become the economic slaves of those who consume taxes...

... California has ~2.3 million unionized government workers and ~18.6 million civilians. With so many people organized with a laser-like focus on increasing taxes and spending, the private working citizens of California find it nearly impossible to prevent government workers from voting their own paychecks.

In effect, government workers have hijacked democracy. Instead of state employees working for the people, the people now work for the state employees. As far as the state government is concerned, people in the private sector work merely so that they can be taxed for the benefit of the tax consumers. They’ve entered a condition not unlike like that of pre-industrial serfs.

This is the issue for the coming years. And for all his charm and eloquence is President Obama likely to find himself on the wrong side of it?

Titoite Yugoslavia made a cornerstone of its ideology the notion of socialistic non-nationalistic Brotherhood and Unity (Bratstvo i Jedinstvo).

As we know, it did not turn out too well.

Good to see that fine tradition continuing thousands of miles away.

UK Foreign Secretary David Miliband is having a thin time of it.

His visit to India featured several apparent misjudgements (wrong tone on terrorism, ill-judged observations on Kashmir and an inappropriately Nu Labour matey conversational style with senior Indian interlocutors). See this vivid demolition job.

Plus there is a claim that he has offended members of the UK Jewish community:

The word is that, at a meeting last week with a group of senior Jewish community figures, he told them that they should "tell your government" to stop bombing Gaza. 

The has been denied by the FCO, albeit in a curious formulation:

We do not recognise this account of the Foreign Secretary's remarks. He categorically did not say what Stephen Pollard attributes to him. The Foreign Secretary has not questioned, and nor would he, the nationality or loyalties of either Britain's Jewish community or other communities in the UK. As he has said many times, Britain's diversity is its strength.

That to me has a hint of shiftiness about it. He may not have said exactly what Stephen Pollard wrote - but did he say something along the same lines?

Back to that India visit. See here the Foreign Secretary visiting the constituency of Rahul Ghandi. Is this open-necked look the right way for him to dress for going out and about in India, even if one is sleeping in a local mud hut?

It reminds me of the visit by then Prime Minister John Major to war-torn Sarajevo. Bosnians were appalled and insulted to see the UK Prime Minister in a jumper for meetings with the Izetbegovic leadership, talking about it dismissively years afterwards.

The politics of these visits are one thing. But the style is what often makes the biggest impact.

"It's not what you say. It's what people hear."

And what they hear is a lot about what they see, and feel.

In this India case, the Indians 'heard' condescending. The Foreign Secretary appears to have been too 'familiar' with his Indian interlocutors:

The Foreign Secretary has been accused of upsetting his hosts in India with his 'patronising' manner and 'offensive' remarks on terrorism.

Mr Miliband, 43, was said to have referred to counterparts decades his senior by their first names, even though they scrupulously called him 'Your Excellency', as is customary for foreign dignitaries.

There we have it. After all those long years of Labour finger-wagging about Diversity and Cultural Sensitivity, we end up with elementary mistakes like this at a high and important level.

In Labour's case it all wends its way back to Tony Blair's insouciance - the idea that the world's problems could be tackled 'informally' by lots of charm, lying back on comfy sofas rather than sitting upright at a grown-up polished table.

When I left the FCO last year a letter arrived from David Miliband thanking me for my hard work over the years. The letter was on FCO blue-crested paper, but sent in the cheapest possible recycled brown envelope. Thanks.

Is it that at the high levels of the British government they no longer care about projecting good standards of behaviour and presentation?

Have they consciously decided to dumb down standards?

Or is that they simply have never heard of them?

Trundling across Poland's snowy steppes on the train from Warsaw to Krakow yesterday, I missed the Inauguration.

As for George W Bush, Christopher Hitchens' assessment is good enough for me:

... it is the events of Sept. 11, 2001, that explain the transformation of George Bush from a rather lazy small-government conservative into an interventionist, in almost every sense, politician.

... The obvious failures—in particular the increasing arrogance and insanity of the dictatorships of Iran and North Korea - are at least failures in their own terms: failure to live up to the original rhetoric and failure to mesh human rights imperatives with geo-strategic and security ones. Again, it's not clear to me how any alternative administration would have behaved.

And the collapse of our financial system has its roots in a long-ago attempt, not disgraceful in and of itself, to put home ownership within reach even of the least affluent. So the old question "compared to what?" does not allow too much glibness.

Inescapable as it is, "compared to what?" isn't much of a defense. And nor has this column been intended exactly as a defense, either. It's just that there's an element of hubris in all this current hope-mongering...

So, welcome then, President Obama.

I like the sense he conveys of an intelligent awareness of some philosphical problems, such as the ghastly results of 'liberal' social policies on the African-American community in general and the male part of that community in particular. 'Smart' diplomacy sounds good to me. As long as it is smart.

But a massive contribution to the current global mess has been an unhealthy alliance between Big Money and Big Government, and for years the US Democratic Party has been even more stupid and profligate in creating the conditions for that than the Republicans - President Bush's main policy failure lies in not confronting it.

So if Obama is to achieve better outcomes on Responsibility, he must come to terms not only with the fiendishly difficult policy issues but also with the deepest instincts and greedy if not corrupt impulses of his own party.

Maybe a crisis makes it easier to to do that. If he realises that he has to do it, and in fact has the strength to be a true leader.

But that's for tomorrow.

For now as a non US citizen I express my humble and hearty gratitude to the USA for showing the world once again how to deal with powerful leaders. Compare what happened yesterday in Washington with the political wreckage in Zimbabwe, Cuba, N Korea, China, most of the Arab world, Russia and so on.

A leader with huge power gracefully accepted that the end of his rule had come and in a solemn yet light-touch ceremony handed over power to a new man, duly elected to replace him. He now in turn has at most some 416 weeks to lead the United States before he steps down.

This is Civilisation. Playing by the rules, and not making sneaky selfish manoeuvres to change them. A fresh start. Which creates the conditions for some positive Change to complement all that Hope.

Thanks again America.

Back when the Euro was launched, senior US economist Martin Feldstein annoyed a lot of people by warning that the Euro was likely to lead to dangerous new tensions in Europe and between the EU and USA.

Here is a flavour of the argument:

Since there is no major country in the world that does not have its own currency, abolishing national currencies is a major move toward abolishing European national states...

Reducing policy competition among the nations of Europe will therefore reduce the ability of European companies to compete in world markets. The result will be increased trade friction with the U.S. and other countries as Europe attempts to block American and other non-European products on the ground that they are made under "unfair conditions," i.e, in countries with lower tax rates and more flexible labor markets.

All this in turn will be a cause of European conflict rather than the increased harmony that the original proponents of a federal Europe wanted. Governments are already protesting the attempt to harmonize taxes. Future experience with cyclical unemployment and rising inflation will justifiably provoke angry politicians to blame domestic ills on the decisions made by the representatives of other European countries. The frustration over the inability to influence one's own national economic affairs is likely to become an increasingly difficult problem within Europe.

Some of the gloomy Feldstein prognostications turned out to be wrong, at least as far as the following decade was concerned - inflation did not rise in the EU, and the Eurofederalist impule towards greater harmonisation trundled along quite nicely as the Euro-visionaries had planned. 'Conflict' was avoided both within the EU and across the Atlantic.

But all that happened during a period of impressive global economic growth. The real test is what happens now as things suddenly get a lot more difficult and uncertain and the 'deep' assumptions upon which huge systems are based fall to be challenged.

Feldstein remains pessimistic:

The UK and other Western powers are talking about helping stop arms being smuggled into Gaza, to support a ceasefire.

Core Question: when they see likely Hamas arms smugglers heading towards Gaza and ask/order them to stop and they do not stop, are they prepared to use lethal force to enforce the arms blockade? In effect to join Israel in containing Hamas and its supporters?

If so, what is the legal source of the mandate?

If not, the gesture doesn't mean too much?

My first personal encounter with something resembling War was back in April 1986 when the USA attacked Colonel Gaddafi - one of my very first postings described the episode.

That event was, of course, not really War as currently understood - more a one-off action of ruthless retaliation aimed at catching the Libyan leader's personal attention to get him to stop promoting terrorism against US targets.

In the big scheme of things it worked well, culminating years later in Gaddafi renouncing weapons of mass destruction after some brilliant UK/US private diplomacy. One of the unambiguous high-spots of the Bush/Blair policy era.

Another warlike event was the NATO bombing of Serbia in 1999 aimed at stopping Milosevic from oppressing Kosovo Albanians. This was a far wider action, killing several thousand Serbs. It was not an open military aim to kill Milosevic personally (as far as I know) although his villa in Dedinje did take a missile through the front door keyhole.

When does violent military activity move from being a limited action aimed at individual targets to a generalised 'war' in which two sides try to destroy each other 'anonymously' as it were?

I did not like the NATO bombing of Serbia, reasonable as its aims were. There seemed to be a lot of lawyers poring over NATO targeting policy, wittering that attacks aimed at killing Milosevic and other leaders personally amounted to unacceptable assassination/murder outside international law norms. But if international law leads us to kill and maim thousands of hapless Serbian conscripts and not a far smaller number of senior people directly responsible for the whole mess, international law is a ass.

My guess is that here as in many other areas, our policies and norms were drawn up many years ago to deal with quite different problems which were managed in the way they were in part because of the then available technology. The technology has moved on, yet the policies and procedures remain and have grown in luxuriance and complexity, their original raison d'etre long forgotten.

Which is all a long-winded way of urging everyone to read this long but remarkable piece of work about the future of war - and the role of robots in it.

Think about all the wars of the nineteenth century and then WW1 and WW2. Vast armies locked in sprawling mechanised slaughter, primarily because the people who started the conflicts could mobilise these forces for mass carnage and hope to prevail and stay alive.

Now look at the Israeli action in Gaza, such as taking out specific members of the Iran Unit. And maybe the curious absence of urgency in the collective Arab response to it. Arab leaders know exactly what Israel is doing in cutting Hamas down to size man by man, and quietly think that this just fine by them?

In short, War is becoming Very Personal. It is possible to use robot weapons to find and hit individuals who start and drive forward conflict, largely avoiding other unintended civilian casualties on the scale seen over the preevious thousand years.

Will 'war' increasingly merge with the techniques used by states to combat gangsterism - where a small bunch of people grab weapons and hope to compel a wider public to support them?

I expect that it will - and that we urgently need new legal principles to manage this utterly different situation.