‘He laughed at accidental sirens that broke the evening gloom
The police had warned of repercussions
They followed none too soon
A trickle of strangers were all that were left alive’

 

I appreciate that writing about COVID-19 is a long way from this column’s raison d’etre of Brexit, however the scope has broadened over time to consider issues such as nationalism, austerity and populism, which are all part of the overall Brexit issue.

This week I want to consider populism in the light of the crisis and how this might be an opportunity to use its lack of ideology to deliver the unorthodox and create real change.

Everyone has been quick to voice opinions on how governments are handling the situation,  we must accept that we are in unchartered waters, therefore no one knows what is right until after the event.

With this is mind, whilst I am no admirer of this government, I believe they are doing a reasonable job in very difficult circumstances.

‘we have a new phrase, ‘Whatever It Takes’’

And, following hard on the heels of ‘taking back control’, ‘let’s get Brexit done’, and ‘levelling up’, we have a new phrase, ‘Whatever It Takes’.  It’s reassuring that not even a pandemic gets in the way of the spin doctors!

The financial packages announce by the Chancellor are likely to get the UK through this Crisis with far less collateral damage than we ever expected.

Whilst, they may not be perfect it’s a big step towards stability, delivering what is required, i.e. protecting the economy and the population from financial uncertainty through the crisis.

This support is a step-up on what is currently being considered in the US, which was highlighted by Bloomberg: ‘Since the 1980s the US has equated economic health with a rising market and ever-increasing corporate profits. They are necessary to a healthy economy but are ultimately just a means to an end. The end is the welfare of citizens.’

This could have been written about Trump, like all populists he has no fixed ideology, but is simply a ‘chancer’ grabbing what he sees as opportunities, and looking for scapegoats to brandish in-front of the electorate should things not work out.

He has long nailed his political colours to the success of the US economy, focussing on a rising stock market to make the electorate believe they are ‘rich’.

This explains his initial reaction to the crisis a ‘hoax’, as he feared the impact on the stock market and his own re-election prospects.

He then moved on, stating that infections were ‘going very substantially down, not up’, finally promising millions of testing kits would be easily available to Americans.

‘the fact that the virus originated in China is manna from heaven for Trump, like the good populist that he is’

Of course, the fact that the virus originated in China is manna from heaven for Trump, like the good populist that he is, he will undoubtedly use the Chinese authorities as the scapegoat.

Assuming the virus is under control and political rallies are allowed, you can just imagine the crowd chanting ‘nuke ‘em’ as he whips them into the usual frenzy.

Perhaps, this might explain the surge in sales of guns in the country: the owner of one of the country’s largest gun shops, Hyatt Guns in Charlotte, North Carolina, told the Guardian that the scenes of mass buying at his store were virtually unprecedented. ‘This is only the second time in my 61 years of business that we’ve seen anything like this,’ he said, adding that the first occasion was the aftermath of the mass shooting at Sandy Hook elementary school in Connecticut in 2012.

Hyatt said that the type of guns being bought was reflective of the fear prevalent among customers. There was almost no interest in hunting rifles. Instead, people were opting for target guns and there was big demand for AR-15 semi-automatic assault-style rifles.

Maybe they have taken Trump’s warning that Americans are under attack from the ‘invisible enemy’ of a murderous virus to heart and plan to shoot it with their assault rifles?

Whereas we Brits are made of sterner stuff, it’s loo roles all the way; Smith & Wesson wiped out by Andrex!

 

‘Please Mr. Gunman
Don’t be an inconsiderate prick’

 

Guns aside, why is it that the Americans never cease to disappoint me?

Over the weekend it was reported that the US president offered German biopharmaceutical company CureVac ‘large sums of money’ to gain exclusive access to their work, reported Die Welt.

‘Guns aside, why is it that the Americans never cease to disappoint me?’

According to an anonymous source quoted in the newspaper, Trump was doing everything to secure a vaccine against the coronavirus for the US, ‘but for the US only’.

The German government was reportedly offering its own financial incentives for the vaccine to stay in the country and fighting off the aggressive takeover bid.

The German health minister Jens Spahn said that a takeover of the CureVac company by the Trump administration was ‘off the table’. CureVac would only develop vaccine ‘for the whole world’, Spahn said, ‘not for individual countries’.

‘COVID-19 is already a health crisis; it is set to be an economic crisis too’

Globally, central banks have acted in a big and bold way, but there must also be coordination.

Situations such as the row between Russia and Saudi Arabia, two of the biggest oil producers, and China and the US embroiled in a trade war need to be overcome.

Also, governments making a’grab’ for vaccines for their benefit only, is unaccpetable.

The pandemic has highlighted the need to work together for both public health and economic stability reasons. COVID-19 is already a health crisis; it is set to be an economic crisis too.

 

‘This ain’t no party, this ain’t no disco,
This ain’t no fooling around’

 

Politicians are not only using the language and policies, of wartime, they are also adopting the language and policies of the left: the need for social solidarity, the importance of intervening to help struggling firms, the urgency of bailouts for hard-hit industries.

In a battle for economic survival the constraints of peacetime must be ditched. As the chancellor, Rishi Sunak, acknowledged this is not time for free-market ideology or orthodoxy, the size of the budget deficit is now irrelevant.

Central banks have done what is now the norm cutting interest rates and quantitative easing, but many commentators are calling for the supposed unthinkable, helicopter money.

‘many commentators are calling for the supposed unthinkable, helicopter money’

Milton Friedman said that governments could always prevent a slump if they were prepared to load helicopters with money and rain it down on us, the idea being that if the cash doesn’t have to be paid back, spending will increase lifting the economy out of recession.

There are concerns about this course of action, one is that it brings into question central bank independence.

The second is the fear of hyperinflation, for example, Germany of 1923. I believe both can be discounted, this is a one in a lifetime situation, and the unorthodox should be embraced.

Continuing with the example Germany there is also an example of how might happen if we don’t resort to this tactic. In 1932 the failure of orthodox policies in Germany, where there were 6-million unemployed, led to the rise of fascism.

Take your pick? Personally, I don’t believe a bit of inflation is a bad thing after the last 12-yrs.

My fear is that the slew of bankruptcies caused by over-leveraged companies who have gorged on cheap debt being unable to refinance will mean that even helicopter money won’t lead to run-away inflation.

A similar idea was suggested by Jeremy Corbyn, in 2015, when he flirted with the idea of People’s QE, using the money created by the Bank of England to support a green transformation of the economy. Not surprisingly it was dismissed as being irresponsible, now it is being suggested in ‘high’ places:

 

  • Jim O’Neill, a former Goldman Sachs chief economist and minister under David Cameron, said there should be cash handouts so people can feed themselves and pay their household bills during the crisis. And what did he call it? People’s QE,
  • Hong Kong has decided to give all residents a cash handout,
  • Donald Trump wants to do the same in the US.

 

This interventionist approach is not without precedent, after WW2 Labour was elected on a similar interventionist programme to that used during the war years.

This is the same, we are fighting against the spread of the virus and economic collapse. It is this fight that provides the opportunity for real change.

Since the 1980s, governments have been told to take a back seat and let business steer and create wealth, intervening only for the purpose of fixing problems when they arise.

The issue being that waiting for the systemic sharp shock before acting means that insufficient preparations are made. An example of this is the NHS where there have been cuts to public health totalling £1bn since 2015, are left weakened.

Also, business has been given too influential a role with the so-called public-private partnerships, which appear to prioritise the interests of business over the public good.

‘move away from fixing market failures when they arise, to actively shaping and creating markets that deliver sustainable and inclusive growth’

For example, research and development favours ‘blockbusters’ instead of less commercially appealing medicines, this includes antibiotics and vaccines for several diseases with the potential to cause epidemics.

The opportunity the crisis presents is to move away from fixing market failures when they arise, to actively shaping and creating markets that deliver sustainable and inclusive growth.

Partnerships with business involving government funds must be driven by public interest, not profit, E.G. research and development aimed at addressing public health goals and solving major health problems.

Finally, we need to learn from the mistakes of 2008 when the banks were bailed out ‘for free’; this time conditions should be attached to any hand-outs, for example, focussing on a green strategy, lowering carbon emissions, investing in workers, and making sure they can adapt to new technologies.

‘doing it properly might also deliver ‘levelling up’!’

In summary, we are living through dark times, even Brexit isn’t mentioned. However, there is light at the end of the tunnel, there always is.

Johnson has dined out on not being part of the establishment, and much has been made of Dominic Cummins being the anarchist of Whitehall, now is their time

The challenge is to revaluate how the country operates, to consider the unorthodox and make lasting change, that would really be getting it done. And, doing it properly might also deliver ‘levelling up’!

It is likely that Brexit will be delayed, an already a tight timetable now appears to be an impossible one.

With time for reflection perhaps ‘leavers’ realise that standing alone leaves us vulnerable in times of crisis and being a ‘good leaver’ is preferable to No Deal?

 

Finally, stay safe and think of others, too.

 

 

‘’Cause life is just to die.
But, anyone who has a heart
Wouldn’t want to turn around and break it
And anyone who ever played the part
He wouldn’t want to turn around and fake it..’

 

 

OK lyric spotters with things seemingly accelerating at warp factor 9 towards certain oblivion, we are extremely fortunate and grateful to have Philip’s assessment of the Coronavirus crisis; it is heartening that through all the darkness he sees reasons for optimism once we come out the other side – as we surely will.

Just seven short days ago, Boris’ strategy of herd immunity was still considered a credible solution; however, since the quants crunched the numbers and realised that mass graves may not be be seen as a triumph for populism, things have changed dramatically with pubs, clubs and restaurants all closed to those that had previously been flaunting their youth and vitality.

Because of the requirement for social distancing, no entries will be accepted via the normal channels this week; claims can be prominently displayed outside a contestant’s front door to be noted by adjudicators in lieu of the automated solution we hope will be in place next week.

However, if you fared as badly as me, you’ll have little to shout about – aside, perhaps, from the fact that you have become acquainted with some cracking tracks – and all totally relevant in these uncharted waters.

First up – and we should have known he’d be in there – ‘a great track from a great album’ 3-pts if you got David Bowie with ‘Panic in Detroit’

Next ‘the lyrics are too perfect! Perhaps the band Nirvana never were and always wanted to be?’ Fully 5-pts if you got to Mudhoney and ‘Please Mr Gunman’ – new one to me, but great Seattle sound, and one for some more research.

Third-up! its not Cameo, but its an absolute treat –  ‘my favourite song from this band’ and what a pearl – just the one point if you get Talking Heads and ‘Life During Wartime’. That’s certainly how it feels isn’t it – but I defy anybody not to be cheered up by the video!

Lastly, ‘these guys were just the greatest, one wonderful song after another. The perfect pop song’. Not a word of dissent here 3-pts for the superb Velvet Underground (please see featured image) and ‘Sweet Jane’.

Enjoy – and please stay safe.

 

 

Philip Gilbert 2Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

 

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