22 August 2019

Aidan Reid

22 August 2019

Good morning,

In the middle of a morning of celebration for Labour following the party’s 1997 general election triumph, the new prime minister, Tony Blair, took a call from his fellow social democratic leader, Bill Clinton. On being offered congratulations, Blair replied: “Yes, well you showed the way”.
 
In Clinton’s realignment of Democratic party policies in 1990s America, Labour felt it had found its model for governing from a central base with a socially just conscious. The ‘third way’ espoused by Blair’s acolytes followed Clinton’s ideological footsteps, and the presentation of Blair up to and following the 1997 election was presidential, focusing on his individual qualities as well as the party’s policies.
 
Now, as the Democratic primary season hots up in the US once again, is it the Democrats who now look to Labour for their blueprint?
 
Following Labour’s own disavowal of its electorally successful former leader, Bill Clinton also finds himself largely ostracised from his party, for ideological reasons as well as an increasingly tainted view of his time in office. With the individual, so the ideology he pursued has now been abandoned.
 
Looking to the primary season thus far, campaigns run by charismatic individuals like Corey Booker and Beto O’Rourke that attempt a balancing act between core values and the need to compromise for power have received short shrift. Instead, candidates like Bernie Sanders and Elizabeth Warren point to the collectivist ground support swelling under them and present themselves as the beneficiaries rather than the explicit leaders of a movement, offering policy platforms tailored to the wishes of party members.
 
This is the kind of campaign Jeremy Corbyn ran during the Labour leadership race in 2015, and it was one that ultimately separated him from his more centrist rivals like Andy Burnham, who proved unable to match Corbyn’s appeal to the membership.
 
Based on polling and the current trajectory of the Democratic primary race, the compromise candidate of Joe Biden may face the same fate as Burnham. He leads a crowded field with 29.8% in national polling, but that is with 19 other candidates competing. With Kamala Harris gaining support by criticising the policy compromises Biden feels he must make, Sanders and Warren look placed to challenge with unapologetically radical policies (for American politics) such as a wealth tax and Medicare for all.
 
In 2015, following Ed Miliband’s failure to find any sweet spot between radicalism and centrism, Labour plumped for a full-on radical willing to offer policies that represented the base. Now the Democrats, following the defeat of their own ideologically compromised candidate in Hillary Clinton, may be heading the same way. I can’t help but feel that the implications of any such move would extend beyond the party’s immediate chances in the next presidential election, to a sea change that would realign American politics for the foreseeable future.

News

Following bilateral discussions between Boris Johnson and Angela Merkel, the latter callled on the UK to identify an alternative to the Northern Irish backstop within the next 30 days. The comments were seized upon by the prime minister, who claimed there was “ample scope” for a new deal, although those hopes may be quashed in talks today with French president, Emmanuel Macron, who is not anticipated to be as open to new proposals.
 
Meanwhile, the deputy prime minister of Ireland, Simon Conway, emphasised that there would be no individual deal between Ireland and the UK in the event of a no-deal Brexit. He also indicated that it was likely the Northern Irish parties would begin to govern from Stormont again ahead of the UK’s exit date from the EU on 31 October.
 
The new transport secretary, Grant Shapps, has announced an independent review of the HS2 project. It will consider whether the project is the best way to deliver improved connectivity between London and the north of England, and will make a final pronouncement by the end of the year.
 
New regulations announced by the US Government will potentially see child migrants suspected of illegally crossing the US southern border detained indefinitely, by scrapping the current limit of 20 days. It is expected the proposals will be challenged on human rights grounds.

Business & Economy

The High Court in London has ruled in favour of Ryanair pilots proposing to strike today and tomorrow. It is expected the airline will limit the impact of this action by drafting in pilots from other EU countries, although delays are expected. It comes as Ryanair considers efforts to cut up to 900 of its pilots and cabin crew staff in a cost-cutting drive.
 
The minutes of last month’s meeting of the Federal Reserve’s Monetary Policy Committee have revealed division among the committee over interest rate cuts. There was a cross section of views expressed, with some members keen to go further than the settled upon 0.25% decrease by implementing a 0.5% cut, as well as those who rejected any cut.  
 
The Argentinian treasury minister, Herman Lacunza, has announced his government will use its US dollar reserves to shore up the country’s currency. It comes after it lost value due to the recent primary elections ahead of Argentina’s upcoming presidential election, to the extent that markets expect the country to default on its debt.
 
Annual figures from the Government Expenditure & Revenue Scotland (GERS) have been published. They found that Scotland’s spending deficit fell by 1.2% in the past year, in part due to increased tax revenues, to £12.6bn. This spending gap represents seven per cent of Scotland’s GDP.

Markets

What happened yesterday?

The US markets saw gains on the whole in the face of growing pessimism over a possible upcoming recession. This was largely attributed to the interim results of large retailers Target and Lowe’s. Their positive figures were taken as a sign that consumer spending continued to remain at high levels, with the S&P 500 rising by 0.8% and the Nasdaq and Dow Jones Industrial Average indexes going up by 0.9%. There was, though, briefly another inversion in value between the yields on long term debt compared to short term, which is assumed to be a sign of an upcoming recession.
 
In the UK, the pound continued its decline amid fears of a no-deal Brexit, falling by 0.4% compared to the dollar. In contrast, the London stock exchange saw significant gains, with the FTSE 100 up by 1.1% and the FTSE 250 rising by 1.05%. One of the drivers of this rise was travel firm, TUI, which saw a 3.73% increase in its share price as it benefits from a good summer season.

What's happening today?

Finals
Arcontech Group    
Ashley(laura)
Rank
 
Interims
Anglo Pacific
Antofagasta 
CRH   
John Laing   
Macfarlane Grp.
Playtech        
Premier Oil

TAGMs
BLP
Oakley
 
Final Ex-DIvident Date
Berkeley Group       
Park Grp.      
Ramsdens Hldgs
Stagecoach  
Walker Crips
 
Int. Economic Announcements
(13:30) Initial Jobless Claims (US)

Columns of Note

Stephen Bush of the New Statesman indulges in some soothsaying on whether a likely snap general election would see Jeremy Corbyn’s Labour make a comeback in polling similar to 2017. There are arguments offered for and against this, largely centred on whether Boris Johnson’s brand and popularity within his party survive contact with the electorate. He also argues that the Liberal Democrats will take votes from Labour nationally but seats from the Conservatives locally, while suggesting Conservative gains from 2017 in Scotland are likely to fade. (£)
 
Roger Boyles in The Times challenges assumptions among Angela Merkel’s political opponents that her decision to receive more than one million refugees into Germany has not had a positive impact. While acknowledging an electoral price has been paid by her party, the Christian Democrats, recent employment figures have indicated refugees are paying into the system and taking up jobs, boosting the economy at a time when it lurks perilously close to recession. The positive impact this influx into the workforce has had on the average age is also felt to be crucial for a nation meeting the challenge of an ageing population. (£)

Did you know?

It is estimated there are now 50 million kangaroos in Australia.

Parliamentary highlights

House of Commons
In recess until 3rd September.
 
House of Lords
In recess until 3rd September.
 
Scottish Parliament
In recess until 2nd September.