Europe is one of the issues we talked about way too much in the bad old days.  But there is a progressive and compelling case against membership of the Single Currency and it was put quite nicely by the peerless Paul Krugman in the New York Times last week.

In his piece, he suggested that the plight of the Spanish economy is largely brought on by its membership of the Eurozone.  To quote Krugman:

“So what happened? Spain is an object lesson in the problems of having monetary union without fiscal and labor market integration. First, there was a huge boom in Spain, largely driven by a housing bubble — and financed by capital outflows from Germany. This boom pulled up Spanish wages. Then the bubble burst, leaving Spanish labor overpriced relative to Germany and France, and precipitating a surge in unemployment. It also led to large Spanish budget deficits, mainly because of collapsing revenue but also due to efforts to limit the rise in unemployment.

If Spain had its own currency, this would be a good time to devalue; but it doesn’t.

On the other hand, if Spain were like Florida, its problems wouldn’t be as severe. The budget deficit wouldn’t be as large, because social insurance payments would be coming from Brussels, just as Social Security and Medicare come from Washington. And there would be a safety valve for unemployment, as many workers would migrate to regions with better prospects. (Wages wouldn’t have gone up as much in the first place, because of in-migration).

The point is that this has nothing to do with a spendthrift government; what’s happening to Spain reflects the inherent problems with the euro, which now more than ever looks like a monetary union too far.”

I have always been surprised that the progressive left have been taken in hook, line and sinker by the Euro argument.  This is, after all, the same body that Nye Bevan described as “a vehicle for rapacious capitalism.”  In effect, the Euro has taken away many of the key economic instruments that Governments used to have and the Spanish Government is finding its hands tied by Euro membership.  At the same time, the single currency has locked national governments into neo-liberal policies around debt and deficits, with insufficient scope given to policies aimed at tackling unemployment.  The levels of unemployment in Spain, Ireland and Portugal, robbed of national policy levers and thrown into a one size fits all monetary policy, make a very strong progressive case against the UK ever joining a single currency.

Roger Helmer M.E.P has surpassed himself.  This year he has shown grotesque, open and public disloyalty to the Party leadership.  He has written an offensive blog piece, stating that “homophobia…describes something which simply does not exist.  “Homophobia” is merely a propaganda device designed to denigrate and stigmatise those holding conventional opinions”   Just when you thought things could not get any worse, he publishes an article on Conservative Home that is breathtaking in its absurdity and nastiness.  Astonishing is its declared intent to see Conservatives reduced to an inward looking, dogmatic rump, characterised by a small-minded failure to come to terms with modern Britain, resulting in what would become permanent opposition.  Why on Earth does he want to reduce our great party to that?

Mr Helmer gazes across to the Atlantic, where “Republicans are reacting against wets and liberals and leftists standing as Republican candidates.”  He points out that a bunch of zealots on the Republican National Committee would like to set an ideological litmus test for GOP candidates.  He proposes a similar ideological litmus test for Tories in the UK.  In doing so, he ignores the historical diversity and pragmatism of our views and advocates turning a Party on the verge of regaining power into an intellectually pure rump.

What he fails to point out is that the act of outrageous self absorption by Repuplicans in New York’s 23^rd District, to which he refers, led to the Democrats capturing the seat for the first time since the Civil War.   Many long serving and loyal Republicans are facing being driven out of the Party by the doctrinal purity brigade – marching round the GOP like the Bennites in the early 80s on trucker’s speed.  As the Telegraph noted, “Senator John McCain of Arizona, the party’s presidential candidate last year, would almost certainly fail the test, along with at least 40 other Republicans in Congress.”  Do we really want the same thing to happen here?  I think not.

We have recaptured our electoral verve as a Party because we have recognised that elections are won on the middle ground, where the majority of the British people are.  We have recovered our verve because we understand that the British people dislike ideological zealots and prefer pragmatism and ‘what works’.  Helmer seems to want to throw away our electoral advances for the sake of purity.  He wants everybody in the party to have the same views as him.  That is absurd and dangerous.

Helmer’s politics truly is the politics of ‘no compromise with the electorate’ and a stubborn failure to come to terms with the modern world.  It is the politics of the smug purity of a special interest group, rather than the realistic pragmatism of a successful political party.

The House of Lords seem to be waving their privileged sabres in today’s newspapers about the proposed Queen’s Speech.  Peers are apparently threatening to ‘block’ measures being proposed in the Queen’s Speech.  They have NO BUSINESS to do any such thing and should be very careful about using such language.

It is remarkable that the Lords is using such language – given that it has zero democratic or political legitimacy.  Indeed, it normally reserves this kind of language for the only time when the Upper House gets generally excited – the preservation of their own sports and pursuits.  It sets a dangerous constitutional principle for the unelected, undemocratic House of Lords to be threatening to “block” and “veto” legislation proposed by an elected Government and supported by a democratic chamber.

I dislike this Government and I dislike much of this Government’s putative programme.  But the House of Lords should remember its constitutional position.  It is an amending chamber and NOT a blocking chamber.  If the people’s chamber supports legislation, the unelected chamber should not stand in its way.

Reform of this anachronistic institution is long overdue.  This Government has failed to produce radical reform of the chamber and I hope that the next Government will take up the challenge.   The Lords should be careful about abusing their constitutional position – however much they dislike what the elected House is proposing.

The Sunday Times reported yesterday that bankers at RBS are set for a bumper bonus round this year.  Apparently, RBS will be paying out £5million in bonuses this year, with people in the investment banking arm taking home an average of £240,000 each.

Let’s be quite clear about this.  If true, this is completely outrageous.  It would be totally unacceptable if RBS used OUR MONEY to reward themselves with big bonuses.  Without Governmental support, RBS would have gone the same way as Lehman Brothers.  An absurd business model almost brought one of Britain’s oldest banks to its knees.  The Treasury had to pump £20 billion into the bank to keep it afloat.  This absurd, high risk, irresponsible business model was a major factor in triggering the recession that is still having devastating consequences, in terms of unemployment on ‘main street’.

Just over a year after the bank was put onto life support using public money, it is shocking that the bank’s instinctive reaction is to embark on a champagne fuelled bonus spree using OUR MONEY.  This at a time when the rest of us are having to tighten our belts and we are facing a public sector deficit of record proportions (in large part because the state had to step in to rescue private banks from their own folly last year).  This at a time when unemployment is approaching 2.5 million.  These bonuses, if true, reveal a lack of human decency and a lack of shame for the carnage that the bad decisions of bankers let loose on the economy.

Sure – bonuses can work as an effective incentive model, when the bonus is a share of profits.  It is entirely up to private sector companies what they do with their own profits.  However, bonuses should be used as an incentive for success not a ‘reward’ for failure.  Sky high bonuses should not be paid using public money.  Bankers are acting like the House of Bourbon – they have learned nothing from recent history.  Seemingly, they do not understand their debt to wider society and the need for self restraint.  This round of bonuses is completely unacceptable and counts as a scandalous waste of public money.

Two examples over the past few days of how the internet and new media has changed everything.  With it should change the behaviour of politicians.  Firstly, the hidden filming of Alan Duncan, which ended up being placed on a blog site and then rifled around media outlets before anybody had a chance to blink.  And secondly, the appearance of Dan Hannan on the ever irritating Fox News, which has ended up creating a phenomenon on Twitter.

In Hannan’s case, I think the key question is – ‘what the hell does he think he was doing?’  He has some interesting ideas but his views on health care are not amongst them.  Did he really think that it would be a shrewd move to appear on the TV shows of two deranged extremists (Beck and Hannity) badmouthing the British health care system?  Why was he openly speaking out against Conservative Party policy on an overseas TV station?  Bearing in mind that UK viewers can watch the toe curling spectacle of Fox News through their Sky dish, did he really think that nobody in the UK would notice?  Had he forgotten that the internet and social media that had his name all over the place a few months ago could also be used against him?  And next time he goes on a tour of self promotion, can Mr Hannan please give some thought to how it will affect Conservatives back home who have a General Election to fight within a year.

What these two examples show (and Con Home picked up on this today).  The ever excellent Tweetminster has pointed out that the Hannan affair could mark the coming of age of Twitter in UK politics.  New media and social networking are transforming politics at a rapid rate.  Our politicians will have to adjust their behaviour equally rapidly.  For the lesson of the past two days is that bad news travels quickly in a new media age.