In 1994 Robert Mugabe, President of Zimbabwe, was made an honorary Knight Commander of the Order of the Bath by Queen Elizabeth II.  This means he can put the letters KCB behind his name, but cannot use the title “Sir”.  Since then, Robert Mugabe has gone from freedom fighter and leader of a liberation movement to dictator, despot, thug and tyrannical leader of one of the most brutal and murderous regimes in the world.

His economic mismanagement has ruined a once-prosperous country.  Hyperinflation and, on conservative estimates, a 60% decline in real GDP are but two indicators of the massive decline in living standards suffered by the vast majority of the population.  Poverty and malnutrition have exploded.  Life expectancy has collapsed beyond even what could have been expected because of the regional incidence of HIV/Aids. Millions of Zimbabweans have become refugees, many of them in South Africa, where their arrival has caused large-scale riots by poor native South Africans who view them as competitors for jobs and housing. (more…)

French President Nicolas Sarkozy has blamed Peter Mandelson, the EU trade commissioner, for the Irish ‘no’ vote in the referendum on the Lisbon Treaty.  I yield to no one in the strength of my belief that the EU commissioners have super-human powers.  Even so, Sarkozy’s has to be an unusual mind to reach that conclusion. Why not blame the French and Dutch voters who in 2005 rejected the Treaty establishing a Constitution for Europe?  Without their ‘no’ vote there might not have been any need for a Lisbon Treaty - and it would have been such fun to have a referendum in the UK. (more…)

I am pleased to be able to bring you another wonderful piece of writing by Uwe Reinhardt.  In some ways it is a a sequel to his earlier piece on this blog “I hate mom (and the government too)”, but it also stands very well on its own.  This article was first published in The Daily Princetonian, on Tuesday, April 29th, 2008.  The marine referred to in the column is Uwe’s youngest son, Mark (aka Hsiao Hoo or Little Tiger).  I knew him as a tiny tot, when he used to hang around the pool and fountain next to the Woodrow Wilson School at Princeton University. (more…)

In his open letter to the Chancellor of the Exchequer, Alistair Darling, Mervyn King, Governor of the Bank of England, has given his explanation of why inflation in the UK has increased since last year. The open letter procedure is a useful part of the communication and accountability framework of the Bank of England. It requires the Governor to write an open letter to the Chancellor whenever the inflation rate departs by more than 1 percent from its target (in either direction). In that letter the Governor, on behalf of the Monetary Policy Committee (MPC) gives the reasons for the undershoot or overshoot of the inflation target, what the MPC plans to do about it, how long it is expected to take until inflation is back on target and how all this is consistent with the Bank’s official mandate. The current inflation target is an annual inflation rate of 2 percent for the Consumer Price Index (CPI). With actual year-on-year inflation at 3.3 percent in May 2008, it was time to sharpen the official quill and write an open letter.

I am distinctly underwhelmed by the Governor’s explanation of the reasons for the increase in CPI inflation. In the intermediate undergraduate macroeconomics courses I used to teach, his would have been a failing answer to the question: “What caused inflation to rise in the UK during the first half of 2008?”

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Dear Chancellor,

There it is: 3.x%, with x > 0. What can I say? As that great philosopher Forrest Gump said: “shit happens”.

I won’t insult your intelligence the way both of us have at times seen fit to insult the intelligence of the British public - by claiming that the rising world prices of energy, food and other commodities lie behind the increase in the rate of inflation in the UK, the USA, the Eurozone and most of the rest of the world. When the currency floats, as is the case for sterling, central banks make inflation. To be even more precise, whatever else drives inflation in the short term, central banks can drive inflation towards its target level in the medium term. Short run price level and inflation blips are beyond our control, but over a horizon of more than a year or so, the buck (or should that be the quid?) stops at Threadneedle street. (more…)

The voters of the Republic of Ireland have rejected the Lisbon Treaty (officially the Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community) in the referendum held on June 12. According to the rules of the EU, as found in the Nice Treaty, this means that the Lisbon Treaty cannot come into effect, as the unanimous ratification of the Treaty by all EU member states is required for this.

No point moaning that 4 million Irish cannot be permitted to thwart the will of 490 million other Europeans. That argument is bogus and dangerous, even if the 8 remaining EU member states that have not yet reached a formal decision on the Lisbon Treaty were to ratify it - something that is by no means a done deal. The rules for ratification of the Treaty were clear. To change the rules when you are losing is a violation of the rule of law. Respect for the rule of law is even more important than the fate of the Lisbon Treaty. (more…)

On June 11, I went to a presentation at the London headquarters of BP of the BP Statistical Review of World Energy, June 2008, by Tony Hayward, Group Chief Executive of BP and Christof Rühl, the Chief Economist. Nice presentations, good documents, until the Chief Executive extolled the unique virtues of Cap & Trade and the Chief Economist jumped in by asserting that Cap & Trade was, unlike the taxation of carbon emissions, an efficient way to deal with the environmental externalities of greenhouse gas emissions. This assertion deserves a one-word label: baloney.

Cap & Trade is an efficient way to deal with the environmental externalities of greenhouse gas emissions because it is equivalent to a tax on greenhouse gas emissions. (more…)

48 hours that is.  The UK’s gutless House of Commons has just consented to the most serious assault on a free society and on our essential liberties this country has seen for at least a century.

It will now be possible for persons suspected of terrorist crimes to be detained without being charged for up to 42 days.  This is a major step on the road to a police state in the UK - a horrifying encroachment on human rights.  If the government believe there is a war on, let them declare a state of emergency and assume emergency powers.  This introduction of state-of-emergency-instruments and powers during ‘normal’ times, is a constitutional outrage. (more…)

The UK Treasury is considering the creation of something I shall refer to as an FSC (for Financial Stability Committee/Council) to advise/assist/overrule the Governor of the Bank of England and the other four executive members of the Bank of England’s Monetary Policy Committee (MPC) who currently deal with and decide on financial stability matters.

This could be a good idea or a bad idea, depending on how it is implemented. (more…)

“The first casualty of war is truth,” said US Senator Hiram Johnson. Truth is also the first victim of political partisanship. Not surprising, really, as the true believers in any political cause view their campaigns as wars. The second and third victims of political partisanship are, respectively, one’s sense of humour and the ability to write in proper English.

Those who doubt the truth of these propositions are invited to take a look at some of the self-righteous nonsense, often expressed in bad English, that poured in in response to my blogs on Senators Obama (here & here)and Clinton (here).

In the latest kerfuffle, it was supporters of Senator Clinton who got their knickers twisted. The statement of mine that caused such apoplexy among the Clintonistas was the following: “Senator Clinton has lost. She deserved to lose. She ran an ugly campaign. Just one vignette. When asked (again) on the CBS show 60 Minutes whether she believes Obama is a Muslim (a ludicrous rumour spread by right-wing bloggers and media in the US), she replies: “No, no why would I - there’s nothing to base that on - as far as I know”. She said this with a strong emphasis on the last ‘I’.” (more…)