At last a choice.

I have been getting a little too one-eyed recently and allowing my dislike of New Labour and the sleaze around them to miss some important choices coming up ahead. The Tories and New Labour are beginning to split away in how to deal with the economic crisis. Up until now Brown, and Blair before him, have been following the economic ideas of Milton Friedman who inspired Thatcher and Reagan. This did not give David Cameron much room to maneuver. John Maynard Keynes, pictured, and his ideas were consigned to the dustbin of history. Now it's beginning to change. As Brown starts to look for Keynesian answers to the crisis Cameron has stayed true to Thatcherism.

As much as the Tories would rather not get tied down on policies before the election, and many of the voters will let their dislike of New Labour control their vote, the election will have an enormous effect on the standard of living of most British voters. Now I cannot pretend to be an expert on economics, but seeing that the experts have got it so wrong recently I will try and explain what I feel is the difference between the parties policies and the results this might give.

I will start with the Tories as this is the easy one. It's now clear that David Cameron will not try and spend his way out of the recession/depression. This is the pure laissez-faire much favoured in the past by the likes of Thatcher and Enoch Powell. Companies and banks in trouble will be allowed to fold. As less people are at work and able to pay tax, social services will be cut. The government will rely on charities to support the weakest. We will start to see deflation and a depression like that of the 1930's will occur. We will see strife on the streets. Those with considerable cash savings will benefit although house prices will tumble as more default on their mortgages. In the end the middle class will be hurt along with those underneath but the very rich will get away without too much pain. This will be explained by Cameron as not allowing future generation to be saddled with the enormous debt.

Now to New Labour. Brown and some of the others seem to have had a road to Damascus moment and are seeing the dangers in a Thatcherite answer to the crisis which following those ideas has led them into. It might be that some of these New Labour ministers can't bring themselves to break from old ideas and there are rumours that Alistair Darling may resign if forced to keep on spending. So what is the Keynesian response to the crisis? Basically it is to spend our way out of the recession. It will need money printed and acceptance of inflation to work. What they are attempting is to buy growth. This was how FDR pulled the US out of the depression, although the war may have contributed also.

What effect would New Labour's policies have? Well because of inflation, unless interest rates rise fast, those with cash savings will see the real value decline. It will be hard to see this policy propping up housing prices, or at least the real property value after inflation, but the fall could be less than that with depression and deflation. If we get the desired growth, then those in the middle class and lower may see a smaller drop in their standard of living than otherwise. Inflation will of course make the government debt smaller in real value. The danger is stagflation where we have the inflation but no growth which is a possibility as the damage to the economy is already so great. That could put us into a pre-war German-like situation. One of the problems that could lead us in that direction would be if the government was forced to protect the exchange rate or get finance for the government debt by raising interest rates.

So we are caught between a rock and a hard place and a decision will have to be made. The Tories would much rather we didn't think about the outcome of their policies while Labour has no guarantee that theirs will work. I know what way I'm leaning, but I suspect that Brown and Blair have created such a bad smell that it will make no difference.

Guilty Men

Guilty Men was published in 1940 naming and calling for the retirement of those politicians responsible for the policy of appeasement with Hitler's Germany. Within weeks it had sold over 200,000 copies. It would be interesting today to see who would be named for responsibility of today's economic crisis.

James Crosby, pictured right, would be an easy target. He was in charge of HBOS during its most badly managed period and managed to fire the compliance manager who tried to warn the bank of the problems it was getting into. Yes the bankers are responsible but they couldn't have done what they did with the help of the politicians. Both in the UK and the US politicians from Maggie Thatcher and Ronald Reagan through to the Blair/Brown and GW Bush have done all they could to remove regulation that controlled the worst of the financial industry's scams and frauds.

Gordon Brown must carry some of this blame, but I suspect we will never hear him say he's sorry. He will continue to say it was an international problem outside of his control. Crosby was his favourite banker and Brown made him 2nd. in command of the regulators, the FSA, that should have been monitoring what the banks were up to. Now making a poacher the gamekeeper is fine and often works but it does rely on the poacher knowing that poaching was wrong. For the promotion and honours given to James Crosby, Brown should at least apologise.

For being a bad driver you can be sent to prison even if an accident wasn't intentional. Let's see some bankers in prison for the bad management they gave while driving the country into this economic crisis.

Brown and Blair were not the first.

Gordon Brown, and Tony Blair, were not the first Labour leaders to continue Thatcher-like policies after they replaced a Tory leader. In fact Thatcher-like policies didn't start with Thatcher but were a throwback to a much earlier age.

For some reason UK TV is going through a period of re-examining Doctor Richard Beeching's destruction of the postwar nationalized British railways. It's about 45 years since his first report that started the axing of so much of the railway infrastructure. The Wilson government of 1964 continued his policies although in their election statements they said they would save the axed lines.

Beeching was a appointed as the highest paid UK civil servant of the time, 1961, by the conservative Minister of Transport and crook, Ernest Marples. Marples had interests in road building companies that he moved into his wife's name while as Minister of Transport, he did his best to increase road transport and decrease that on rail. He had to live the last few years of his life in the tax shelter of Monaco on the run from the UK tax authorities and various court cases started against him. He was a typical Thacherite conservative long before Thatcher's takeover of the party came about.

The person who most resembles Marples today is actually the US vice-president. I wonder if Dick Cheney will spend the last few years of his life in the tax shelter of Dubai, the new head office town of Haliburton, on the run from the US legal system?

The lesson from the Beeching reports, which led to the closure of 25% of the UK's railway mileage and 50% of the stations, were not learnt by governments up until this day. If you close basic infrastructure for purely economic reasons without taking any public need into account, it is very hard to get it back later. Whether it's railways or national health services, profit should not be the governing force. The needs of the public should have the highest priority.

Maggie a State Funeral?

Like the newspapers I'm getting my obituary column ready early. It seems that in government and at the palace there is talk about giving Maggie Thatcher, Hilda to her friends, a state funeral with all the trappings that Churchill got.

Now I don't want to throw cold water on that idea but I have a much better one. How about a new national holiday instead. We could have this on the first day of May. If the first was either a Saturday, Sunday or Monday we could then have an extra Tuesday off to add to the May Bank Holiday making a very long weekend.

Now what to call this new holiday? Depending on your political allegiances it could be Thatcher Day, Bloody Maggie Day or just plain May Day, its old name before she changed it.

This is what you get for the money!

I couldn't let the British Airways Heathrow Terminal 5 story go by this week without a comment. I live in a third world country where two years ago they moved from one airport to another 25 kilometers away overnight and still had passengers flying with their baggage the next day. So why couldn't British Airways, and maybe the British Airports Authority (BAA), get it right?

Well you would have to go back to 1981 with British Airways when Maggie Thatcher put John King, later Lord, in as chairman of the company to set about privatising it. Two years later he brings in Colin Marshall to run it and from then on you have a history of job losses, bad labour relations and crooked dealings. While the Tories held up British Airways as what could be done by privatisation, experienced travellers avoided the airline like the plague. If it hadn't had its sinicured atlantic flights out of Heathrow it would have died years ago.

I suspect I could make a similar case about the now Spanish owned BAA. How did British Airways hope the move would work out when the staff-management relations are so very poor. Where was the needed enthusiasm from the labour force meant to come from. The whole Thatcherite policy on privatisation needed a beaten labour force to make these companies succeed without state support. The chairmen of these companies were picked to do the job. You only have to think back to bringing Ian MacGregor in as head of the coal industry.

So which of the many companies privatised have worked out as successes. Sure there has been some success for asset strippers and those that hold a near monopoly position in their industry, but for the customers and staff there has not been an overall benefit. Will train commuters in the UK claim they are better off. I suspect not many of the remaining small shareholders feel particularly happy. Those in British Airways should demand a change in management at the very least. How about those who invested into the Channel Tunnel. I guess the then Tory cabinet didn't put anything into that one.

Read Diamond Geezer, he was there.

Maggie Thatcher

First thought on today's walk was about Maggie Thatcher. Don't know why this came up.

The only thing I think I ever liked about Maggie was she thought she was as good as any royalty, including the queen. I have never been very fond of the Windsors, (really the Saxe-Coburg-Gothas). Queen Victoria's grandchildren fighting like spoiled kids, led to the millions who died in WW1 and we should have got rid of them. Even if most people don't want a republic, we could at least change dynasties and get a better crowd in. We have done it in the past.

Anyway back to Maggie. I think she always wanted to be compared with Churchill or the first Elizabeth, but looking back she was more like Henry VIII without the balls. He, after moaning about Rome, was crazy enough to walk out and start his own religion which has been the cause of so much grief later. Maggie was either not crazy enough or lacked the courage to walk out of the EU, thank god!