Friday, July 29, 2011

I wasn't going to write about the Norwegian massacre because it has rather fallen from the front pages – then I realised that was precisely the point. Had it been the al Qaeda atrocity that many initially suspected, things would've been different. Today's press would've been dominated by commentary about 'Norway's 9/11' and the 'New Nordic Front in the War on Terror'. We would no doubt be told that there was now 'nowhere to hide' from Islamic fanatics.

“Is Scotland next” the red tops would've asked, as they picked over David Cameron's latest security review. We would be told that the Glasgow Airport bombing four years ago should have alerted us to a change in the modus operandi of international terror. Columnists would have been arguing that it is because 'politically correct' countries like Norway are so na├»ve about multiculturalism that they have become vulnerable targets for Islamic fanatics. Rebekah Brooks had she still been a Murdoch editor, would have flown to the scene offering free mobile phones to the victims' parents.

Wednesday, July 27, 2011

We were wrong about Megrahi - for all the right reasons.

Sometimes in life, you just have to admit that you got it wrong. With hindsight it was a mistake to release the Lockerbie bomber Adelbasset ali al Megrahi on compassionate grounds in 2009. The Scottish Justice Secretary, Kenny MacAskill, did the right thing by the tenets of Scots law. He thought long and hard and, on the basis of medical advice that al Megrahi had three months to live, he made the wrong call. So did I, by the way, so I'm not exercising 20/20 hindsight here.

Why was it wrong? First of all, because of the impact on the Lockerbie victims' families, who have had to endure two years of seeing al Megrahi celebrated as a national hero by Col Gaddafi's murderous regime in Tripoli. He has become a potent symbol of defiance by the regime against Western “imperialism”. He was paraded again this week in the latest show of strength by the Libyan dictator. Of course, we didn't know in 2009 that we would be at war, effectively, with Gaddafi but Megrahi has now turned into a major propaganda asset for the enemy.

Damage has also  been done to Scotland's image in America and the rest of the world and it has made our justice system look absurd. Kenny MacAskill took guidance on Scots law on compassionate release, but he was not bound to follow it. In retrospect he should have said that this involved such an exceptional crime, under such extraordinary circumstances, that it would be morally deficient, if legally correct, to release him from jail. Megrahi could have been allowed compassionate time with his family in Scotland, while still a prisoner.

Monday, July 25, 2011

Get over it - the euro is here to stay

 Another week, another crisis in the eurozone. Another last minute deal and another hundred billion or so tossed at the bankrupt Greek government. It's an odd way to run a whelk stall, and makes you wonder how long it can go on. The consensus among the British press and politicians this week is that it can't and that the euro is a busted flush. Ha ha – told you so.

Mind you, British opinion formers have confidently predicted the demise of the euro repeatedly over the last few years and the single currency somehow survives. And if you go abroad this summer you'll find that the euro is not only still around, it's worth a great deal more than the pound. It remains one of the world's reserve currencies, which suggests that someone somewhere still has confidence in it.

So, has anything changed after this latest bail out – the second “final solution” in six months? And should we bother about it anyway, since Britain declined the euro?. Well, I think something pretty fundamental has changed through this sovereign debt crisis, if only because the countries of Europe have looked into the abyss and decided that there is no alternative but to keep the euro almost at any cost. We can't go on basing policy on the complacent expectation that the euro will somehow go away. It won't.

On Thursday, President Sarkozy and Chancellor Merkel agreed once again to save Greece from default by another massive loan. In the financial world this is called “kicking the can further down the street” - i.e. putting off the inevitable Greek default. Though it's a pretty long street and a pretty big can. Greece will now be able to borrow at 3.5% over 30 years, instead of at 16% for 30 months as it does now. Greek bonds now have the backing of France and Germany – two of the greatest industrial powers on the planet.

Sunday, July 24, 2011

Sorry guys: regulation is the only way to restore faith in journalism.

 Throughout the phone hacking scandal, I've noted the parallels with the financial crisis in 2008. The concentration of market power in fewer and fewer hands; the negligence of regulators; the complicity of politicians; and the ultimate crisis of a conglomerate that was “too big to fail” - for Lehman Brothers read Rupert Murdoch's News International. The banks cut corners, out-sourced risk, relied on dubious practices conducted by third parties in the so called “shadow banking system”. Sound familiar?

Rupert Murdoch's people had followed the same path – explosive growth, moral abdication, using shadowy underworld figures to hack phones and blag information from official sources. Murdoch's halting appearance before the Commons select committee this week even reminded me a little of the octogenarian former head of the US Federal Reserve, Alan Greenspan, when he faced Congress in 2009 and admitted that he had been humbled by a crisis he failed to foresee.

No, I'm not apologising for Rupert Murdoch here, nor suggesting that he is to be equated to a central banker. His defence that he knew nothing about how his own newspapers acquired their greatest scoops, echoed by his son James and former Sun and News of the World editor, Rebekah Brooks, is patently ridiculous. As ridiculous as bankers like Fred Goodwin of RBS not knowing about sub-prime mortgage bonds. But I make the comparison because a number of commentators have been saying that the hacking scandal is trivial compared with other grown up issues, like the debt crisis sweeping Europe right now. I don't think it is trivial because it is a product of the same complex of lax regulation, political hypocrisy and naked self-interest.