From the monthly archives:

August 2011

London riots (Peckham)

I happened to be in London last week for the riots. I was there when my old hood in East Dulwich got smashed: the Londis, the Post Office, the Palmerston, a pharmacy and a launderette, all done in.

The consensus was that it would have been worse if ED offered anything the rioters wanted. Being mostly a place of maternity and health stores, it didn’t give the looting opportunities of other areas.

Things were worse on nearby Peckham high street: Burger King, Clark’s, Ladbrokes, etc, all raided; Greggs, the baker’s, completely burnt out, front to back.

The riots were enough to produce a kind of hysteria among East Dulwich’s shop-keepers. Told that a mob was already tearing up Forest Hill and coming their way, the whole of Lordship Lane closed down in 10 minutes — at 2 in the PM.

The rumour turned out to be completely wrong, but it showed what panic can do. You don’t even have to have an actual mob to make people skittish.

But what were these riots? What caused them? How come a sleepy place like East Dulwich was affected?

There have been plenty of explanations: from police cuts and Britain’s softly-softly policing style, to festering youth alienation and lack of opportunity. People have blamed the financial crisis and expenses scandal for lowering the moral bar (as in, if they can steal and cheat, why shouldn’t I?). They have decried Britain’s consumerist culture, the boredom of the summer holidays, and the lack of better things to do.

My own feeling is that all the above have some truth to them — especially the last. There was not much better on offer in August, that’s true; smashing up things is fun; and there was an opportunity with police understaffed. Chuck in the organising influence of technology and you have yourselves a dangerous mob.

The images that stayed with me were both from walking around Peckham on Tuesday morning. The first, overhearing a “youth” of about 15 excitedly tell his friends about the “madness” of the night before, a big smile on his face; the second, a normal-looking couple at the back of Greggs, reaching into a garage that had been smashed, and filching a couple of bags from inside.

The riots, which ignited over serious police brutality, became nothing more than entertainment: an excuse for madness. Once started, they created opportunities for others to get involved, as the couple did the next day in Peckham. My bet is they were not the sort of people who would normally have looted a lock-up at 11am, with dozens of people around.

What annoyed me in the aftermath was to hear so many people use the moment to push their own agendas. There are the obvious cases, such as Ken Livingstone drawing attention to Boris Johnson’s foppishness, or Ed Miliband drawing attention to the government’s cuts. But other more subtle ones as well: from the academic who called for more money for youth research (presumably benefiting herself, as much as the youth), to religious groups calling for a return to church, to activists like Naomi Klein (see here) describing the riots as a protest against capitalism. (Strange how the riots were both consumerist and anti-capitalist).

The danger is that such discussions become about all sorts of issues that people want to push, rather than about the thing itself — i.e a series of fairly disorganised youth disturbances. Theoretical and political explanations can be useful, but not if they distract from the basic data — which to me points to something more banal. Unified explanations aside, it could be that the riots were about very little at all.

(Image: J@ck!)

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S&P’s judgement

August 6, 2011

I’m no expert on the financial implications, but the S&P downgrade is damning on the US political class:

• More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

• Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

Hard to disagree: who wouldn’t be pessimistic about Congress and the Administration?

Hopefully, though, this will strengthen Obama’s hand to reach the “balanced” deal he wanted, i.e one including tax increases. S&P is so gloomy partly because of Republican resistance on taxes:

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.

So far, Obama has been reluctant to let the Bush tax cuts expire, preferring (for political reasons) that Republicans agree to new increases instead. Perhaps, he’ll now have the balls. And, perhaps, the Republicans will have less power to resist.

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the capitol

So, Congress has passed a bill to raise the federal debt, the US isn’t going to default, and armageddon has been avoided.. well, put off for a few weeks.

After all the tension, and all the rage directed at D.C recently, we’re in for a period of rejoicing. In the next few days, markets will surely bounce, borrowing costs will no doubt fall, poll ratings will surge, and Congress, and Obama, will be praised for coming together in a moment of crisis. The people, meanwhile, will default to a generally positive view of their country as an example to the rest of the world.

There is little to celebrate, though. First, it is a bad deal. It takes money out of the economy at a time when the US should be spending, not cutting. And it takes from the poor, in the shape of spending cuts, while maintaining tax cuts for people who should be asked to pay a share.

Second, it is not really a deal at all, in the sense of resolving the main arguments. By farming out the difficult decisions to a bipartisan committee, the players are simply re-arranging the problem in a different form (OK, getting 12 people to agree to $1.5 trn of cuts will be easier than two houses of Congress, but the possibility for stalemate remains).

What the debt deal shows – or rather what the lack of a real debt deal shows – is a deeper dysfunction in US politics, where the needs of democracy and governing are out of whack. The US system of divided government is rightly praised for providing checks and balances. But in the age of “hyper-partisanship”, it is leading to gridlock, and a lack of clear direction. At a time when the US has big decisions to make, it is either putting them off for later, or failing to get bills through both houses. Hundreds of important pieces of legislation now die each year in the Senate, unable to overcome the 60-vote barrier (necessary to avoid a filibuster). And even mid-level government appointments have trouble getting confirmed, as opposition parties exploit every angle, sometimes over what seem relatively minor issues.

If the Congress couldn’t agree on a proper deal when the US was facing a calamitous default and government shutdown, there is not much hope for legislation proposed during normal times. Generally, the system is incapable of somehow adjudicating or mediating the extreme differences between the parties. In the old days, reasonable men disagreed, but eventually compromised. Now, they simply disagree and put the problem off for another day.

Having three centres of executive power, as the US effectively has, is no way to run a country. Either it should do away with one or two of those branches (not really an option) or seriously reform Congress, so that the party that wins an election can actually carry out what it was elected to do. Checks and balances are all very well, but ultimately decision-making should take precedence.

(Image: Imagined Reality)

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