Thursday, 26 March 2009

The devalued Dan Hannan

Dan Hannan, polemical Telegraph journalist turned polemical MEP, journalist and blogger is the hero of the hour for the right-wing blogosphere for his rant against Gordon Brown. (The text can be read here, as well as the YouTube video).

I note three interesting things about this:

1. Many people got many things wrong about this crisis. I have yet to find anybody who was quite so extravagantly wrong as Dan Hannan. Let us not forget Hannan's paean of praise to the prosperous, deregulated Eurosceptic utopia that was Iceland: a model for Britain and us all.

Hannan loves Iceland dearly, having spent his stag night there to celebrate the fact that it had stayed out of the EU. (His best man, Tory ppc Mark Reckless, had been desperately keen to go to Greenland, as the only territory which has seceded: obsessive just doesn't cover it).

But I suspect the Hannan YouTube clip might be playing slightly less well in Rejkyavik now despite Hannan's 2004 Spectator piece 'Blue Eyed Shiekhs'.

In the ten years that I have been travelling to Iceland, I have watched an economic miracle unfold there ... Today, Icelanders are absolutely rolling in it. A people two generations away from subsistence farming have become international tycoons.


Look at the City of London, for heaven’s sake, which Brussels is doing its best to asphyxiate with its financial regulations.


Icelanders understand that there is a connection between living in an independent state and living independently from the state. They have no more desire to submit to international than to national regulation. That attitude has made them the happiest, freest and wealthiest people on earth.

So Dan Hannan surely ought to be the most devalued commentator or politician in Britain, Europe and beyond.

(Michael Lewis has a really interesting piece of reportage on the psychology of the Icelandic boom and crash in Vanity Fair).

2. The truly impressive YouTube numbers have been driven by this going viral through being made the lead by Matt Drudge, Rush Limbaugh and the US right-wing blogs (whose help Hannan generously acknowledges). Since the US right have not had much to cheer them up since Sarah Palin, we ought not to begrudge them this entertainment. Though the absurd right-wing attack blogger Paul Staines, who calls himself "Guido Fawkes", says that Hannan is now leader of the 'dittohead' wingnuts: "It is the speech that many Republicans wish they had someone to deliver to Obama"!)

3. If the right will take Hannan's popularity as further evidence that it has the blogosphere cracked, does it matter that all of their energy is on the anti-ProgCon right?

Hannan is perhaps the most strident Eurosceptic, no regulation, as little state as possible voice in the Tory party. (Though note that Hannan is very confident that David Cameron is privately much more Eurosceptic than anybody has realised, and campaigned for him to be leader on that basis. And Hannan won his vocal campaign against betraying the pledge to leave the EPP: after a heated internal argument, Cameron has divorced the parties of Angela Merkel and Nicolas Sarkozy in Europe).

So Hannan's new found online fame will not help David Cameron persuade his party not to bang on about Europe. It is leading to questions about why Cameron does not himself turn into Mr Angry and just let rip too.

Are there shades here of the Bennite insurgency within the Labour party? At the risk of starting another Trot-off with Mr Luke Akehurst, isn't Dan Hannan something of a Tory Trot?


John said...

What a poor quality blog this is proving to be. I had hoped that this insight into the Fabian Society would help me form my political views better. Is this really the best that Fabianism has to offer to the curious ? I tend to agree that the left doesn't "get" web 2.0 if this blog is about as much as you can get blog-wise of the Fabian movement that has been ones of the prime drivers of left-ish thought in the UK for the last 100 years.

Jonathan said...

I got to this blog via a link from the Guardian referencing this as a "dismantling" of Hannan's speech. Fair enough, I thought, let's have a look.

lol, hardly!

I assume the Grauniad assumed no one would follow it up.

ciarĂ¡n said...

I too followed the link and don't quite see the problems suggested by the two comments above.

"Web 2.0"? Really? We're still talking like this? A blog is just a publishing tool; how one chooses to use it is entirely up to the individual. Does it not count because there's no Twitter feed down the side? Or because it's on Blogger not Tumblr?

And as for the argument, seems a pretty good one to me (someone who praised the City & Iceland is not really the best placed top lecture anyone on what went wrong).

That's not to say that Brown is innocent in any way, but I think it's a perfectly valid point to make to discredit Mr Hannan.

Mootinator said...

"And as for the argument, seems a pretty good one to me."

An ad-hominem is neither a valid argument nor an "easy dismantling" of a valid argument!

Mark said...

So you say he is devalued because in 2004 he failed to predict that Gordon Brown would label Icelanders as terrosits and subsequently cause a run on the krona.

Wow, aren't I a muppet for agreeing with his speech?

Sunder Katwala said...

Thanks for responses, hostile as well as the rare supportive one!

I think ad hominen is a silly point. Thanks to Ciaran for also pointing that out. Hannan wants to be an overnight sensation for blaming it all on the Prime Minister. This isn't a serious analysis at all. Apart from a brief suggestion that he supports the economics of Herbert Hoover, how much of substance is there really to engage with? It is surely relevant to point out that Hannan himself was championing less regulation (national and international) and the utopia of Iceland, when too little regulation was the failure and problem. That is a failing of all governments, and of the UK Labour government, and Hannan was considerably more wrong still. That is about his ideas, not his personality. (He is an articulate advocate for the most eurosceptic politics possible).

Mark, In my humble opinion, you really are woefully misinformed if you seriously think that was the cause of Iceland's economic difficulties (and are not just trying to score a political point). Of course, that was seen as an unpopular lack of solidarity as the whole house of cards came tumbling down. But the scale of unregulated speculation was the problem, not what the UK government felt it should do to protect its assets. No serious economist would agree with you. If you read the Michael Lewis article linked, you will find lots of informative analysis of why it all went wrong from Icelanders, from ordinary citizens to the Prime Minister, head of central bank and former bankers.

Taghioff said...


The point about Iceland is well made, this is an ideological point, and is part of how the Tories are trying to talk of this as a "debt" (i.e. public spending) rather than a de-regulation problem.

The reason why the public spending was so expensive was that it was effectively privatised. Countries with bigger governments and higher shares of GDP spent on publci spending, such as Sweden, as doing far better through this crisis.

The point within the speech is that he starts by saying Amen to free trade, and then starts to Blame Brown for the results of deregulation.

Surely some contradiction there?

Pete Wass said...

The desperation of the left to bend a crisis to their agenda gets ever more pathetic. The collapse of the british economy is not a de-regulation problem, as that would have required de-regulation to have happened. The problem with the financial services secxtor was not a lack of regulation, but a whole raft of exceedingly bad regulation.

The misregulation of financial services here, along with government interference in mortgage practices in the USA are the prime motivators, and the excess of debt exacerbated it. Gordon Brown and arack Obama's solution to the massive debt is to whip out the credit card and rack up a bit more. Quelle surprise.

Taghioff said...

Dear Pete

Never underestimate the power of Denial. You have had Republicans in office for 8 years, they have captured all 3 houses, and re-regulated the financial services industry extensively, and somehow the American collapse is a problem of the left? Why exactly should we be desperate, it is your laissez-faire ideology that has tanked. Publically and massively and to the detriment of all.

Jo Stiglitz is now part of the effort to clear up this neo-liberal mess. He points out that poor regulation of this kind is widespread, and the answer is tighter regulation. Where did this porr regulation come from? Was it the left?

No, it was Reagan and Thatcher who first floated the idea of freeing up finance from the restraints of government. Since then income distribution in the US has become as unequal as during 1928, during the Great Depression, and that is before this crash.

Nope, you on the right are desperate, which is why people like Rush Limbaugh picked up this video. Time for the conservatives to pick a new Orthodoxy to defend, seems like the old one is broken...

But first you need to get over your collective denial, therapy often works.

Three Headed Monkey said...

There is a difference between unrestriced trade (or free trade) and unregulated trade. Gordon Brown and the US both share responsibilty in promoting the latter. Daniel Hamman is advocating the former.

A small point, but makes the debate a lot clearer.

Taghioff said...

True, but unrestricted trade can be as bad as unregulated.

It was the lack of restrictions (and not regulations) on capital that lead to both the Asian and South American collapses.

There is a fairly strong REVERSE correlation between implementation of Structural Adjustment in Africa and Economic success. Meaning that the unrestricted trade regimes which they advocated were not good for weak economies.

The historical record is that unrestricted trade works for, and so not surprisingly is advocated by, the strongest economies of any given time.

What is new about this current crisis is that the lack of restriction in Financial instrumentation (and where you draw the line in this case with lack of regulation and lack of restriction, accounting has become such a creative business it seems...)
collapsed one of the most powerful trading blocks.

So Daniel Hanaan is still barking up the wrong tree, whichever way you spin the semantics of regulation.

Thatcher's Child said...

What a very poor retort of a good speech. Obviously Dan is wrong because he thought Iceland was a good business model and that is why we shouldn't agree with his speech telling Brown exactly how much of a mess he's made of the UK?

What a moronic debating style you must have!

Firstly, do you know what Free Trade actually is?

The financial system is not free trade, or unregulated or anything of the sort.

If you are in a free trade industry, such as IT, you can set up a business tomorrow, with no qualification, no experience, and no skills, sell your goods to someone else anywhere in the world. You can charge whatever you want, and, if your customer agrees to pay your prices, you can make whatever profit you want. That is Free trade.

Can I set up a bank tomorrow? Can I offer financial advice to anyone I like? Can I decide who my customers should be? Can I decide what my price should be? No I can't - there are regulations to stop me doing any of this.

This recession has been caused by a lack of enforcement of regulations - not because there were no regulations.

If you understand this, you may be a step closer to being able to create an argument - rather than just using Google news and pointing at something that hindsight informs you is wrong.

Anyway - I like reading interesting debate, both for and against ideas I believe in. I won't be coming back here, because you don't do interesting debate!

Sunder Katwala said...

Even in such a short speech, there is a plenty of nonsense on the facts. He appears to say that the car industry has been nationalised.

More significantly, the whole point of the speech is Hannan's assertion that Britain is in the worst economic position of the G20, specifically on the issue of public debt.

Is he right? There are eight rich countries in the G20, with incomes per head over $35,000 per annum. (The others are middle income or developing, ie Saudi Arabia, South Korea, Russia are the next three) Of the comparable developed group of economies, Britain has the seventh lowest level of public debt as a proportion of GDP of the eight countries. Is this compatible with Hannan's claim, which was that others have the scope to take action while the UK does not? I don't think so.

Public debt as % of GDP
Australia 15.4%
UK 47.2%
USA 60.8%
Canada 62.3%
Germany 62.6%
France 67%
Italy 103.7%
Japan 170.4%

The government is now running a larger deficit because it has a policy of fiscal stimulus. That is necessary and sensible, but Hannan opposes it. Hannan also opposes quantitative easing (which his own frontbench agrees is necessary).

Zio Bastone said...

Quantitative Easing isn’t a Keynesian fillip to demand. It comes out of supply side thinking. Whereas 80s monetarism attempted to reduce the ‘velocity’ of money relative to that of goods and services in order to reduce inflation, QE aims to adjust that same relationship upwards. The justification for 80s monetarism was that money finally measures ‘stuff’’. So if you wanted a currency that retained either its domestic or its international purchasing power or both it was best to bring the two things into line. Where ambitions ran beyond that technical purpose (and they did, enormously so) it was a bit like taking some of the mercury out of the thermometer in order to tackle climate change.

The Japanese experience of QE was a poor one. Our experience of trying to squeeze more mercury into the thermometer is quite likely to be worse. Maybe vastly worse. For a start, it is difficult to see why one would want a currency NOT to hold its value except to welsh on one’s debts. Secondly, since a prime cause of the present crisis was that financial institutions created bogus assets through deceptively packaged bad loans, it is difficult to see how the creation of false money and the demand that banks pep up their lending at the government’s behest can do anything but harm. Or do we not now believe in Gresham’s Law?