Posts Tagged ‘UK’

Independence Party Makes Inroads in UK

Sunday, January 5th, 2014

Same thing, only different…

It’s been nearly two decades since it was established, but the U.K.’s Independence Party(UKIP) isn’t going away, and indeed, it has begun to make inroads, particularly at the local level.  The larger reason for this opportunity may be that the establishment Tory party, long considered the UK’s “conservatives,” have abandoned conservative policies in favor of progressive ideas.  If that sounds familiar to you, it should, because in many respects, our own Republican party, long-portrayed in media as virtually synonymous with “conservative” has been behaving like liberals.  Of course, the Tories in the UK have always been more slanted to the left than had been our Republicans, but lately, they’ve all but abandoned any pretense to conservative thought.  As this has happened, it has had a curious effect on the Independence Party, swelling its ranks lately and giving it a real foothold in local elections.  UKIP seems to understand this is a fight over the long run, and not a battle to be won in an election cycle or two.  Their leader, Nigel Farage, made clear in an interview with Foxnews what is the UKIP’s aim:

“We want to take back our country, we want to take back our government, and we want to take back our birthright,”

If this sounds familiar to Tea Party activists, it should.  Just like the Republicans here, the Tories have begun to fully embrace National Healthcare, and all sorts of left-wing ideals, including liberal immigration policies, and the whole slate of liberal policy preferences advocated and advanced by their Labor Party. the U.K.’s equivalent to our own Democrats.  The largest strategic difference between the Tea Party and the UKIP is that rather than seeking to influence the Tories, the Independence Party is in direct competition with them.  They are not trying to work on the party from within, but instead making a full frontal assault on the establishment “Conservatives.” While not precisely like the Tea Party in all respects, in terms of a movement, it is quite similar in its grass-roots orientation.

Naturally, they are dismissed as “racists” and “kooks” and all sorts of demeaning labels by both the traditional parties, but that isn’t stopping them from moving ahead.  Dishonest labels only work so long, as does the attempt to define the whole of the party by the bombastic or outrageous statements of a few individuals within it. More, the UKIP has focused on an issue that seems to a majority of voters across party lines: Membership in the EU.  UKIP opposes it while both Labor and the Tories favor it, despite the fact that a clear majority of the populace stands in favor of withdrawing from the EU.  With this on the table in 2014, UKIP stands to make further inroads as the only party pushing in the same direction as the populace.

This is in many respects like the arguments on two issues we face domestically. The first is Obama-care, and the second is immigration.  In both cases, the US population is opposed by strong majorities to any sort of amnesty and continuance of the health-care law.  While there are still some Republicans who are opposed to amnesty, and a few more in favor of repeal of Obama-care, the fact remains that a large number of Republicans in both houses of Congress are in favor of an amnesty deal, and distinguishing by their votes, have been only too willing to fund and thereby continue Obama-care.

If UKIP manages to pull off some electoral victories, it may offer a hint to Tea Party activists in the US: It may be time to put up its own slate of candidates, completely independent of the Republicans, and it may be time to formally register as a political party.  The sorts of clear issues in which the American people are at odds with both major political parties may be reaching a climax, at which one party or the other must disappear.  This is what happened to the Whigs one and one-half centuries ago, and it may be the end in store for the Republicans if Tea Party activists can get their act together.  Like more and more voters in Britain, Americans may discover that they have no need of both a conservative party and a fake conservative party. If this comes to be the case in the U.K., it  may evince hope for a resurgence of the Tea Party, perhaps under a new banner independent in all respects of the Republican Party.

It may be time for the Tea Party to take that leap.

Running on Empty: Petrol Panic in UK

Monday, April 2nd, 2012

Could We Face the Same?

I recommend my readers check out this piece over the UK Telegraphon what is going on with our friends across the pond.  They’re experiencing a fuels shortage to the extent that the government is being urged to begin an emergency program of rationing.  The issue began when a union of truck drivers who deliver fuels threatened to go on strike, and a government official, Francis Maude, a Cabinet Officer advised people to fill up their tanks and store fuel in storage containers.  Quite naturally, the people responded by doing just that, emptying filling stations everywhere.  While telling the people not to panic, the British government incited a panic, and the resultant run on fuels, in a shortage so severe that first responders there are having difficulty finding fuel to run their ambulances.   What we should learn from all of this are at least two important lessons, and I hope my readers will take note:  Governments cause panics by their actions, but more importantly, our fuel supply is more vulnerable than most people think, because of the structure of the supply chain.

If you drive to your favorite filling station, most days there will be no problem.  You’ll simply dispense the fuel, pay and depart, and there’s no fuss about any of it.  What most people don’t realize is that the amount of fuel out at filling stations is based on the expected, ordinary quantity demanded, and while there may be some small amount in surplus, it’s really not much more than a day or two extra under ordinary conditions.  Fuels are dangerous to store in large quantities, and EPA regulations have made the job harder, but most important is the notion of just-in-time inventory management which means retailers don’t keep more on hand than they will immediately sell under normal conditions.

The reason this matters to consumers is that it means that any small fluctuation upward in quantity demanded can quickly lead to a shortage. As we should have learned in the aftermath of hurricanes Katrina and Rita, anything that causes a shortage at the margins in one locale can quickly spread to others.  If there’s a run on fuels in just a few key locations locally, it can spread like a wildfire as displaced customers shift their demand to other locations, driving those to shortage, and thus pushing the shortage around.  As the shortages spread, panic takes hold, so that people descend on every location for fuel they can find.

This tells us a little bit about the psychology of the market and why such shortages can materialize for no apparent good reason, looking at the matter on a macro scale:  Is there enough fuel for immediate demands? Had people simply gone on with their ordinary purchasing patterns, would there have been a serious market-wide shortage?  No.  The problem lies in the fact that people can be moved by fear and uncertainty regarding the immediate future.  The notion that some days in the future, tanker drivers in the UK might be on strike, and might cause a shortage, was enough to cause a government official to make remarks that started a panic.  Even if the strike never materializes, it will take days or even weeks for the UK to restore things to the normal flow.

What this also should remind us is that on-hand supplies at retail outlets is never nearly what the whole market might demand at once.  At any one time, the capacity of every filling station is just a small fraction of the total capacity of every vehicle’s tank.  When everybody goes to fill up at the same time, the situation is made evident, because the on-hand retail supply can in no way match the condensed time frame of such a move by consumers to tank-up.  In the UK, they’re openly talking about rationing now as a way to restore the normal flow.

The more interesting part about this problem is the human psychology implied: When faced with potential shortages, we tend to horde in response, and this can clearly add to the problems.In the US, where we are much more dependent on fuels to maintain the course of our daily lives, commute and travel distances being so much greater, we’re especially vulnerable to panics generated by short-run, geographically-limited marginal shortages. For this reason, the US can be subject to very small-scale shortages turning into regional or even nationwide problems.  It doesn’t take much.  If a few gas stations over a metropolitan area run short, it can ripple outward and spread like a virus. People begin panic-buying almost as soon as they hear that there is a shortage somewhere nearby.

This is why our current situation is actually so precarious.  It doesn’t take much but a day or two of delayed replenishing in distribution to cause a serious problem.  This is also another reason we should seek to increase not only the amount of oil we produce domestically, but also to increase our refining capacity. The situation underway in the UK  is small compared to the impact such a panic could cause here, primarily because the geographical expanse of our country means that public mass transit isn’t economically viable in most areas.  In short, we need our fuel, and our lives have evolved to depend upon it.  It’s bad enough when governments do idiotic things like start a panic, but what’s worse is when they’re so utterly unprepared when they happen without government prompting.

The American people should be made aware that panic hoarding only worsens the problem and increases the span of time before a situation driven by natural disasters is resolved.  The goal in such a situation should be to delay purchase as long as possible, but that’s so counter to our nature that I don’t expect many people to react in perfectly rational ways.  The other problem we face is political, in that too few Americans understand just how fragile this system has become, and with it, all the dependencies upon which it relies.  If more Americans understood just how reliant they really are on an energy supply to maintain their standard of living, they might bring more pressure on politicians to get out of the way.

European Union Headed For Collapse?

Monday, October 24th, 2011

Beginning of the End?

In the UK’s Parliament, David Cameron is trying to stave off a revolt of the conservative party, as at least 60 members are aboard with the idea of putting up a referendum on leaving the EU.  As a way to head them off, Cameron is hoping to exact some EU treaty re-writes that will return some autonomy to the UK in the matters of social laws and employment.  At the moment, he doesn’t seem to be making any headway, and a revolt against his proposal seems likely.  At the same time, French President Nicolas Sarkozy has told Cameron that he’s sick of the UK telling the rest of the EU what to do, since the British “hate the Euro.”  If you haven’t figured out what’s at the root of all of this, let me help to explain:  The EU is on the brink of complete and utter destruction, and the Eurozone is likely to fails, since neither Greece(immediately) nor Italy(just over the horizon) seem likely to stave off default on their sovereign debt.  Yesterday, I related to you the story of Angela Merkel of Germany chastising Italy over its debt-to-GDP ratio, as she’s looking over the immediate horizon and can see the trouble brewing in Italy, but now France has joined in the pressuring of Italy.  The EU is in deep trouble just now and it looks like the beginning of the end.

Some see this as empowering the US, but any such bubble will be short-lived, as while power in Europe is likely to become decentralized in the short run, in the US, a collapse of our markets and our banking system may not be too far away as I reported Saturday and Sunday.  Our current state of economic and financial affairs leverages strongly against any lasting leadership role, because we’re in debt very nearly on par with Italy, and if we fold, the rest of the world will follow.  The problem at the moment for the US is that we’ve stuck our necks out on behalf of the Europeans via the Federal Reserve and the International Monetary Fund to an extent that we are now firmly tied to their fate.  If they fall, so will we, but the question remains: How far, and how fast?

If we had wise political leadership, they would demand that we stop sticking our neck out on behalf of the Eurozone.  Yes, if they fail, it will hurt us too, but the more we increase our stake, the greater our eventual losses, and the greater the damage will be here at home.  If the EU winds up dissolving at some future date, it will be a potential boon to American economic might, but in the short run, it will have dire effects on our capital markets.  The point to be understood is that I can’t imagine a way that Europe fetches this one from the fire, as the UK’s reluctance signals.  If the British do not wish to stick their necks out, I can’t imagine a reason on Earth that we should be so-inclined.

Domestically, we have weak leadership in the only House in government that would be able to stop any of our further involvement. John Boehner’s not going to stick his neck out in opposing what’s being done with the European derivatives from the Bank of America and JP Morgan, just as he wouldn’t stick his neck out over the debt ceiling negotiations.  In the end, Boehner will capitulate to the Democrats just as he did in July, and much like David Cameron is having to do with members of Parliament in London, Boehner will be trying to herd his members in Washington DC who can see the elections of 2012 directly in front of them, and know they cannot support these kinds of deals any longer.

What all of this is likely to mean on Wall Street at the open on Monday is anybody’s guess, but one thing’s for certain: The volatility we’ve been seeing these last several months is likely to continue, and one of these days very soon may be the worst day on Wall Street in 80 years.  I’m not trying to instill fear or panic, but I want you to know what’s going on in the world around you.  With Europe on the brink, the Middle East ablaze, and our own nation in a severe downturn, it’s only natural to wonder when the bubble will burst.  Washington has been trying to conceal all of this from you for so long that I think they may have forgotten it’s fake.  You can’t support the markets with direct injections of cash as was done through TARP, the bail-outs, and QE2 without eventually arriving at the day when it all goes belly-up.  Having been linked to Europe so thoroughly, we are more vulnerable than ever. Our political leaders have neither the competence nor the will to extricate our nation from the grip of a global calamity.  In the case of at least one individual, I believe it’s being engineered.  Prepare, ladies and gentlemen, prepare.