ANewNATO

Yesterday many leaders from around the world attended the G20 summit meeting in London.

Prime Minister Gordon Brown was roundly praised for his energetic and well-conceived groundwork plus excellent negotiating skills.

President Obama was even more warmly applauded for being President Obama. But there were reservations expressed. Most of these came from the non Anglo Saxon economies that have taken it in turn to fire broadsides of criticism at the USA and UK for their previous financial indiscipline that they state caused the entire global economic problem.

Today President Sarkozy of France is hosting President Obama and the other leaders of NATO in Paris. It will be interesting to see if the French and Germans in particular, can take criticism as well as hand it out.

France recently re-joined NATO as a full member but like the other “allies” in this organization they do more talking than fighting in Afghanistan. While the UK and USA do the hard fighting the majority of the Europeans in the alliance mainly just supply technical and moral support but when it comes to their forces using force, they demonstrate everything that is hypocritical about their countries. They simply don’t and won’t fight.

This is not meant to imply that the servicemen and women from those non-fighting European allies are cowards or are in any way deficient. Their governments have forbidden them to engage the enemy under almost all circumstances.

Despite all of the NATO allies agreeing that they would fight for democracy against the theocracy of the Taliban most of the allies avoid actual fighting.

This is a disgrace and makes you wonder if allies like these are worth having. If push came to shove and we really needed our NATO allies to save our own countries could we rely on them to help?

I think this proves that we could not rely on them for anything other than kind words, if we were lucky.

Even more disgraceful the government of Afghanistan is enacting Taliban inspired laws against the rights of their own women. President Hamid Karzai was roundly condemned by internal and external groups for signing into law legislation that effectively legalizes the rape of a wife by her husband and prevents women from leaving the house without a man's permission.

This law clearly undermines hard-won rights for women enacted after the fall of the Taliban's fanatical Islamist regime. Ask yourself why our soldiers for democracy should potentially risk their lives to enforce laws such as these.

The controversial law _ which many claim was not debated in parliament _ is intended to regulate family life inside Afghanistan's Shiite community, which makes up about 20 percent of this country of 30 million people. The law does not yet affect Afghan Sunnis.

The law stipulates that the wife "is bound to preen for her husband as and when he desires."

"As long as the husband is not traveling, he has the right to have sexual intercourse with his wife every fourth night," Article 132 of the law says. "Unless the wife is ill or has any kind of illness that intercourse could aggravate, the wife is bound to give a positive response to the sexual desires of her husband."

One provision of the law does seem to protect the woman's right to sex inside marriage, saying that the "man should not avoid having sexual relations with his wife longer than once every four months."

Critics claim that President Karzai signed the legislation for purely political gain several months before the country's presidential election.

The United Nations Development Fund for Women said the law "legalizes the rape of a wife by her husband."

"The law violates women's rights and human rights in numerous ways," a UNIFEM statement said.

The issue of women's rights is an ongoing fight between the country's conservative establishment and the relatively more liberal members of society. The Taliban government that ruled Afghanistan from 1996 to 2001 banned women from appearing in public without a body-covering burqa and a male escort from her family.

There are two big questions that have to be answered.

One is whether we should continue to support a government that seems to be morphing into a pale imitation of the Taliban maniacs it is there to replace.

The second question is what kind of alliance is NATO, and why are there two levels of membership?

These are hard questions that all the members of the organization must answer.

G20TheResult

Yesterday’s G20 summit resulted in an additional $1 trillion (£679bn) being made available to boost the world economy.

President Barack Obama claimed that the summit will signal a "turning point" in the pursuit of economic recovery and made progress in reforming a "failed regulatory system".

"By any measure the London summit was historic. It was historic because of the size and the scope of the challenges that we face and because of the timeliness and the magnitude of our response," he said.

There were some other headline initial results when World stock markets skyrocketed and a man caught up in the protests surrounding the event died.

The long anticipated violence broke out but was closely controlled by an overwhelming and well-drilled police operation that swamped the area. There are the usual repercussions that always seem to happen after huge police operations like this in Britain, with accusations flying about. But the general consensus from the watching world media was that the policing was fair, well conceived and executed.

Prime Minister Gordon Brown was a very relieved and happy man when he said the new extra funding would shorten the recession and save jobs. It follows what he described as the "new consensus" reached by heads of state on taking united action to deal with economic crisis.

"This is the day that the world came together, to fight back against the global recession. Not with words but a plan for global recovery and for reform and with a clear timetable," Mr Brown stated at the conference centre in London's Docklands close to the new financial centre at Canary Wharf.

Speaking at a press conference to mark the end of the summit, Mr Brown said G20 leaders had concluded "that global problems require global solutions" and that they will "do what is necessary" but that there are "no quick fixes".

President Obama is known to have played a key role in brokering the agreement, resolving differences between France and China on tax havens.

Another G20 summit will be held later this year to check on progress.

French President Nicolas Sarkozy said that the conclusions of this G20 summit were "more than we could have hoped for".

The $1 trillion injection includes $250 billion (£170.2bn) in International Monetary Fund special drawing rights - available to all IMF members. This is a $150 billion increase on what had previously been suggested in order to help get trade moving again.

The "unprecedented fiscal expansion" already under way will mean a $5 trillion (£3.4tn) injection by the middle of 2010, he said, helping to save or create millions of jobs.

Six pledges were made by leaders - to restore confidence, growth, and jobs; repair the financial system to restore lending; strengthen financial regulation to rebuild trust; fund and reform international financial institutions; promote global trade and investment and reject protectionism and finally to build a sustainable recovery.

A new "financial stability board" will "ensure co-operation across frontiers and to stop risk to the economy" and provide an early-warning mechanism, he said. And for the first time, there will be a "common global approach to how we deal with impaired, or toxic, assets".

Central banks had agreed to "maintain expansionary policies as long as they are needed using the full range of options available to them".

Mr Brown affirmed there were no splits at the talks, saying: "The issues that people thought divided us did not divide us at all. There was substantial agreement on the need for us to do whatever is necessary to return to growth."

Countries had also restated their commitment to the millennium development goals and to helping tackle poverty, he said, adding the summit had agreed measures totaling $50 billion (£34bn) to assist the poorest countries.

Brown added: "This time of financial crisis is no time to walk away from our commitment to the world's poorest. We will not pass by on the other side."

Mr Brown said, “After the Wall Street Crash in 1929 it took 15 years for the world to come together and address the problems.” That delay was unforgivable and disastrous.

The Prime Minister continued: "Our priority right through this summit has been the jobs, the homes, the businesses of hard-working families in this country and, indeed, every country.”

He added that world leaders have agreed to meet again later this year.

The UK and US emphasized the need for public spending to ease the crisis while France and Germany were obviously keener for tougher financial regulation.

Mr Sarkozy had threatened to walk out of the meeting if it did not yield concrete results but this had been largely discounted as gesture politics aimed squarely at his own electorate. Like everyone else he wanted to put his own country’s spin on this event.

Germany’s Chancellor Angela Merkel also praised the outcome.

She said the new measures would give the world a "clearer financial market architecture" and the agreement was "a very, very good, almost historic compromise" and it is clear that it did not oblige any country to launch any further economic stimulus packages.

The truth is that no one knows how well this package of measures might work, but we do know that the time to judge it will come in the months and years to come, not here or now.

We can all agree that this package is promising and perhaps, just perhaps we have seen the end of the beginning of our current crisis.

PremiereAvril

The G20 summit takes place tomorrow in London. Already the great and the good are arriving here with their retinues. Some times it is hard to remember that the Roman Empire is history, especially when one sees the size and majesty surrounding these political leaders.

President Obama has 500 people traveling with him, of whom 200 are security personnel. However I don’t know how necessary his French dessert taster, Monsieur Premiere Avril, is in the democracies of today.

Does he really need Guiy de Maupassant Rabinowitz as his fan bearer, or is he compelled to listen to his personal Chicago back up singers even if they double up as his ostrich feather fan bearers?

The 3 people surrounding Prime Minister Brown is modest in comparison, but as is well known he does have a great deal to be modest about. His retinue contains an information guy who tells him why the public in the UK want to string him up and another two guys who tell him to ignore the first chap.

President Sarkozy of France has announced that he will refuse to sign any agreement with which he doesn’t agree. I feel this is a trend that could take hold since I can announce that as from today I shall also refuse to sign any agreements that I don’t agree with.

Chancellor Angela Merkel of Germany smiled in the direction of the small but perfectly formed French President, and said something along the lines of, I’ll have whatever he’s having and send it to my room. I am confident that rumors stating that she was seen buying underwear from Victoria’s Secret in London are false. It can also be discounted that she entered the Chinese embassy by a side entrance and left some hours later looking disheveled but happy.

The Chinese Prime Minister later stated that his country remains ready, willing and able to inject the necessary liquidity wherever necessary. Roughly translated his statement read, “We’ve been getting it for a very long time, it’s payback time.”

The Japanese smiled and said nothing at all, except they were seen to snigger when asked their view on bailing out the Western economies.

President Obama and Prime Minister Brown went to Saville Row for fittings of their Superman suits but this writer is not entirely sure they are going to fit.

TakingABreak

I am taking a break from writing these articles for a few days, it’s a kind of a blog writers “gone fishing”. Except I can think of nothing I would like to do less. Actually I can. What would be worse is to attend the G20 conference in London next week to listen to the man who was created in a lab when Tony Blair took all the worst aspects of Socialism and conjoined these with the most scabrous parts of Capitalism to create a Frankenstein monster called Gordon Brown.

What did the UK do so wrong to deserve this man?

Brown’s week was enlivened when he delivered his speech to one of the most boring and creepy centers of world government, the European Parliament in Strasbourg.

In response to the Brown presence a British backbench Conservative Member of the European Parliament for South East England, Daniel Hannan delivered an eviscerating condemnation directly to Brown who can be seen trying to smile his way through the attack. In doing this the young Tory has touched a nerve around the world, with approximately a million hits on You Tube in just a couple of days.

Brown looked on helplessly while gritting his teeth, smiling mirthlessly, he shook his head as the Tory caricatured him as a 'Brezhnev era apparatchik' who is ' pathologically incapable' of accepting any of the responsibility for his role in the financial crisis.

The video of MEP Daniel Hannan delivering this no holds barred but measured verbal assassination of the Prime Minister and his gross mis-handling of the economic crisis instantly flowered into a surprise hit on the Internet.

The 37-year-old MEP, who was the youngest British member elected to the European Parliament in 1999, yesterday received plaudits for his tongue-lashing.

Major Broadcasters - including the BBC – totally and abysmally failed to report Mr Hannan's onslaught despite giving full coverage to Mr Brown's most pro-European speech to date and having been forewarned that Hannan was going to respond.

But the world of the old-fashioned broadcaster having the ultimate control over what we are allowed to see is now gone with the advent of almost universal access to the Internet, twitter and mobile communications.

So the speech by the young Conservative firebrand was quickly posted on You Tube and news outlets from Australia to America seized on his comments.

The clip lingers on Prime Minister Brown looking on with a frozen smile, while Hannan warned how Britain was entering the recession in a 'dilapidated condition' with an 'almost unbelievable' deficit.”

It’s time more responsible people took up this battle and said what needs saying. The Emperor, Gordon Brown, has no clothes, he is being transported around the earth in borrowed transportation, shouting to anyone who will listen, “look at my wonderful clothing!” but he is as naked and feeble as the day he was born and it is our duty to tell him until he is forced to listen.

In the meantime I shall be doing something completely different as the G20 convenes in London to the inevitable riots of protesters finding any excuse to misbehave like anarchists in the name of democracy. Whilst inside the hallowed halls of diplomacy a bunch of small well padded boys and girls pretend to be serious politicians and economists who know the economic answers and do their best to avoid another Great Depression.

Let’s just hope we get lucky because nothing, so far, makes me believe our leaders have a clue what to do.

TheJuryIsOut

President Obama retains a great deal of his victorious feel good factor. Almost everyone, even his political foes need and want him to succeed if for nothing more than enlightened self-interest. He, unlike Gordon Brown retains a feel good aura; a ready smile and the appropriate words that make us believe he might have the right answers.

But does anyone really have the required knowledge to navigate these uncharted and dangerous economic storms?

Gordon Brown became Britain’s Chancellor of the Exchequer as part of then Prime Minister Tony Blair’s first government, a dozen years ago. His first action was to divorce the Bank of England from his own direct control. The reason he gave for doing this was so that the Bank of England would set interest rates in order to control inflation independent of any political considerations.

Now Gordon Brown is Prime Minister I would bet big money that he wishes the Bank of England were still in his own direct control. Last night the Governor of the Bank shook the government to the tips of its toes when he said that finance deficits were already too high and therefore there is no room for the Prime Minister to engineer either big tax cuts or any further spending increases to spark life into the economy.

The timing of the Bank Governors intervention couldn’t have been more embarrassing or unfortunately timed for Brown. It comes a few weeks before the next big budget, on April 22 and more or less simultaneous to the Prime Minister making an impassioned pro financial stimulus package to the European Parliament in Strasbourg. He has been touring the world promoting his ideas of a global stimulus package prior to the next G20 summit of the world’s economic superpowers, which he is hosting in London next week.

Mervyn King, the Governor of England’s central Bank, doesn’t believe the country can afford any further stimuli. Gordon Brown believes we have to find a way to afford to stimulate the economy.

An auction in government debt in the UK failed to achieve the target sum for the first time in 7 years. A major warning sign we would do well to heed.

Brown believes that we must be prepared to do what is necessary to resume the growth in the economy achieved by the fiscal stimulus strategy promoted by President Obama and Brown, This includes quantitative easing and extraordinarily low interest rates and effectively means spending our way out of the recession.

The current European President, the Czech leader, believes that the road to hell is paved with the President Obama fiscal stimulus plan.

This is possibly the most important economic argument ever to be fought in the world since the Great Depression and the implications for our future well-being are enormous.

Although it is pleasing and somewhat cathartic to castigate and condemn the wrongdoers and criminals in the financial sector who cost us all so much with their stupidity and greed it is not the most important of the tasks that must be conquered.

Neither should we focus too much attention on more regulations when all we ever needed to do was enforce the regulations that already existed. In fact there is a very good argument to reduce regulations, and make the markets simpler.

Of equal or possibly even more far reaching consequence, we have to consider the future of markets that have operated more like bookmakers. We should eliminate shadow markets and return to a world where financial instruments must be real and paid for.

Right now the battle for the hearts and minds of the G20 leaders is under way and during the next week they will decide whether we spend our way forward, hopefully out of the recession or, as I think is equally likely, we move into a Japanese style decade of stagflation. The jury is out.

Recovery

The announcement of the plans released by the US Treasury Secretary, Tim Geithner seems to have excited the market in Wall Street. The main indexes rose by 6% whilst the banks roared ahead by 15%.

The fundamental underpinning of the plan is that America is committing $1 trillion to buy huge amounts of toxic debt. The idea behind this is that this will unplug the capital markets and credit will again be available in a more normal manner. Like it used to be. But the sad fact is that it isn’t going to ever be quite like it was before.

As the American housing market seems to be picking up a bit, and a chink of sunlight is soothing the incipient panic in the US banking sector the German GDP is expected to fall between 6 to 7% during this year. China is taking progressively more defensive measures and the eastern European countries, formerly part of the Soviet bloc are on the edge of the financial precipice.

No one knows how our collective vulnerability will show itself next. Will the bigger economies have to bail out more of the second and third world countries, and do they have the firepower to do so?

The new emperors of the universe come from Asia and Arabia but it is a very flawed power.

The Chinese continue to live with a paradox. A relatively capitalist economy that is centrally managed by an underlying Soviet type politburo be it political or military. Their controlling fingers are in every pie. But now the global economy is in chaos at precisely the moment China is about to assert itself as a superpower. Is it tenable for China to keep the lid on personal and political freedom whilst energizing and possibly liberalizing their economy and that of the world around them?

There must be a huge temptation for the fairly geriatric Chinese leadership to totally withdraw from the international disaster. However there must be an even more compelling temptation to use the country’s huge reserves for maximum strategic leverage. Will China tear itself apart because of the contradictions of its system or survive and go on to become the pre-eminent global superpower?

The oil rich Arab countries wealth is almost entirely due to their oil revenues and reserves. This is not a sound basis for long-term stability. At present these countries desperately need to create structure and broaden their resources.

As I have written before, you write America off at your peril. But the first shoots of recovery are still a very long way in the distance.

But it has become obvious that the old order is dead and will never come back.

LossOfTrust

Our society operates on the base of faith and trust. Lose this and we experience misery and possible anarchy.

The basis of what makes things tick is economic. If the oil of money is not in the engine it will seize up and that is precisely what’s happening. Once the money vanishes we are left with a future of damage control.

Everything else starts to fall apart without money. Taxation must rise, but the government take decreases as businesses and individuals make less profit, if they profit at all. There will be less cash available for public works and consumers have less money to spend. Even if they have money they lack the confidence to spend when there is growing doubt that they will keep their jobs. The people are suffering from an enormous confidence deficit and an almost total lack of faith in our system.

There was never a time in modern history when our banks held enough cash to meet a potential run on the bank. These institutions, even at their most prudent and solid, never held a dollar or a pound for each pound or dollar deposited with them. It was more like 10% to 15%. It all worked pretty well when no one questioned the solidity and credit worthiness of our banking giants.

Similarly governments work because of the acquiescence of a compliant and law abiding population. The deal being that we shall abide by your laws as long as we feel they’re reasonable and not too far from our notion of fairness. When laws are seen to be unfair there are many examples of the furious reaction of the people. Revolutions and civil wars have started huge bloodbaths because of perceived injustice.

Fundamental questions like this must be asked when the rulebook is being torn up and thrown away. A contemporary large-scale survey amongst young people in Germany found that this group, although largely apathetic about political parties in general, reserved their largest support for the far right. In Austria more than 30% of the general electorate now vote for the Fascist parties. The same trends are becoming evident for a growing swathe of Europe.

Over the last few days I have been conducting a straw pole. I asked an entirely unscientific group of people, here and in the USA a question. They have no link other than me as their common denominator.

The question is this: -

“If you were now to see a person come on your television and say that he is a banker, taking deposits, to be guaranteed by the government 100%, and this guarantee is backed up by a government spokesman. The banker offers a return of 7.5% per year, starting immediately. Will you invest your money with him?”

Well, what do you think?

The banker received a 100% rejection.

Not one person I questioned was prepared to invest their money with my fictitious banker.

This proves that our faith in banks and bankers has totally vanished, and it will be a very long time before it can be recaptured. There is no more important task for our leaders than to reverse this.