Britain and America

David Cameron champions free trade, praises John McCain

Speaking at Davos last night, Conservative Party leader David Cameron warned against protectionist tendencies shown by India, China, and US presidential candidates on both sides:

"As politicians, our actions must match our rhetoric. No buying off domestic opinion with subsidies and barriers. At a time of global and economic uncertainty and of financial instability we must not pander to people's fears by peddling false hopes of protectionism.
 
In years to come, the world will look back at this period, and there will be heroes and there will be villains. The heroes will be those who held their nerve and stood up for free trade. The villains will be those who tried to push us over this tipping point and down the dangerous path of protectionism."

He singled out Republican candidate John McCain for praise in this respect, for arguing that protectionism would not bring back lost industrial jobs. The Telegraph's Rosa Prince, a former Daily Mirror journalist, seems to read too much into this by saying Cameron was breaking diplomatic convention and overtly backing McCain for president.

He may not be openly advocating his selection but he certainly seems to be the Republican of choice amongst Tories now, who are delighted that he has come full-circle in the polls since he spoke at their naitonal conference. The Independent's Pandora column wrote this on Tuesday:

"Quiet ripples of excitement among young turks at Conservative Central Office, as the Vietnam veteran John McCain edges into pole position to become the Republican Party's presidential candidate.

Junior aides have been informed that it is "taken as a given" that some of their number will be heading across the Atlantic should the Arizona senator get his name on November's ballot for the White House. Those selected will be able to cut their teeth in an election environment. The jostling for plane seats has started.

McCain and the Tories already enjoy a cosy relationship. The American visited Westminster in 2005 as a guest of Michael Gove, now shadow Schools Secretary, and spoke at the Tory conference in Bournemouth the following year, at the invitation of the shadow Chancellor, George Osborne."

Also worth noting is that whilst McCain spoke in glowing terms about Cameron in January 2006, by March 2007 he was saying that he felt decieved by Cameron about his stance on Iraq, after Cameron opposed more US troops in Iraq.

Our poll of thousands of Conservative Party members last June put McCain at a very distant second to Giuliani. We'll repeat the poll soon so it'll be interesting to see if they have switched places since then.

Britain and America's shared economic interests

This website tends to major on the shared geopolitical interests of Britain and America.  But economic factors also bind our nations together; in addition to very important shared interests in defence and intelligence.

Here are some relevant facts from the website of Britain's Washington Embassy:

• "The US is overwhelmingly the UK's biggest foreign direct investment partner and vice-versa. The UK has more investment in the US than any other single country, with total assets in 2004 valued at $252 billion. The US is the single largest investor in the UK, with net assets worth over $179 billion (also in 2004);
• US investment flows to the UK in 2004, at $23 billion, accounted for approximately 25% of total US investment in the European Union as a whole that year;
• More than 7,000 British companies have established offices in the US More than 5,000 US companies are based in the UK.
• Affiliate employment between the U.S. and the UK provided jobs for more than 1 million workers in both the UK and the U.S. in 2001;
• Sales from U.S. affiliate companies in the UK alone exceeded aggregate sales in Latin America in 2002;
• In 2004, U.S. exports to the UK totalled about $36 billion, while U.S. imports from the UK stood at roughly $46 billion."

A Thatcherite Republican?

Following on from the post below, it was interesting to read some of Oklahoma Senator Tom Coburn's remarks today:

Sen. Tom Coburn (R-Okla.) said Congress’s deficit spending has become a moral issue surpassing abortion because it saddles future generations with massive debt before they’re born.

“The greatest moral issue of our time isn’t abortion, it’s robbing our next generation of opportunity,” Coburn told reporters at a breakfast meeting Thursday at the National Press Club. “You’re going to save a child from being aborted so they can be born into a debtor’s prison?”

Senator Coburn also questioned Congress' legitimacy owing to its abysmal 11 percent approval rating and explained why he was holding up some 200 pieces of legislation.

This concentration on economic issues above all, while still maintaining a conservative stance on social policy, should be recognizable to British readers as the Thatcherite stance.  It has certainly raised eyebrows here in the States, but it might just be the way for Republicans to reinvigorate themselves.  The divides over social policy and national security identified below are indeed important, but the relative insignificance of the old-fashioned big government liberal candidates in the Democrat field and the disquiet with Republican performance on spending in the GOP field suggest that spending and the deficit could be fruitful ground for policy-makers in the near future.  To that degree at least, British and American politics might be converging again.

-- Iain Murray

Republican and Democrat supporters continue to see the world very differently

This week sees the beginning of a regular YouGov/ Polimetrix poll for The Economist.  As well as headline numbers on the race for the Democrat and Republican nominations, The Economist has also confirmed some big differences between the worldviews of the supporters of the two main parties.

None of the findings are surprising but they do suggest that - although GOP supporters are much more socially conservative on abortion, gay marriage and the origins of life, - the supporters of the two main parties are much more likely to be divided on the Iraq war and on tax cuts.  Over 80% of Democrats believe that it was wrong to invade Iraq.  Not even 20% of Republicans agree.  Nearly 80% of Republicans want to see George W Bush's tax cuts made permanent.  Only 20% of Democrats think the same.

The Economist has published a full PDF of its findings here.

My guess is that British (and European) voters from different parties wouldn't be anywhere near so divided on these issues.  Speaking at a recent meeting of London's Adam Smith Institute, Peter Kellner of YouGov said that there were no bright lines between Britain's political parties anymore.  Perceptions of competence and character were increasingly important in this policy-blurred political environment.

Growth is beautiful

Unemployment down from 6.3% in 2003 to 4.5% now.  Tax revenues up 11% on the same period in the previous fiscal year.  2007 set to be one of the best budget years for four decades.  The stock market up by a half since 2003.

In normal times an economic record like this would produce dizzyingly good satisfaction ratings for a president.  These are not normal times, of course, but a time of war and a war that is not going well.  When George W Bush's presidency is evaluated, however, US economic growth - ignited by tax relief - will greatly boost the positive side of the ledger.

The data in this post is taken from a recent article by James C. Capretta for National Review Online.

Giuliani promises fiscal conservatism

The Bush White House has upset conservatives on many issues but a lack of spending control is at or near the top of the list of complaints.  In an article for TownHall.com, Republican frontrunner Rudy Giuliani draws on his experience in New York to suggest that if he gets into the White House there'll be a lot more fiscal conservatism:

"Washington needs a hefty dose of fiscal discipline. To restore accountable and effective leadership to America, government needs to run more like a business.  That is what I did in New York*. My administration inherited a $2.3 billion deficit. We responded by imposing fiscal discipline. We cut programs. We cut taxes. And we got results. We turned the deficit into a multibillion-dollar surplus. We cut bureaucracy by 20,000 workers - while increasing cops on the street and teachers in the classroom. And we cut taxes 23 times, all while working with a Democrat-dominated city council. Every year - in good times or bad - I required city commissioners to propose cuts in their own budgets. I wanted to keep my managers focused on saving taxpayers' money, while spending it more effectively."

Mayor Giuliani goes on to promise that his prosperity agenda will be built on "four pillars":

• Reduced spending growth: Without sacrificing his priorities of greater energy independence, homeland security and "a stronger military to win the war on terror or, as I call it, "the terrorists' war on us"", he adovates a smaller, smarter government and US$21bn annual savings in wage bills by possibly "permanently retiring just half of the potential retirees" from the federal government.
• Lower tax rates and "the dealth penalty" for the death tax.
• Regulatory reform must be a priority and "heavy-handed regulators, laws such as Sarbanes-Oxley and an environment of hyper-litigation and shareholder lawsuits" must all be pruned.
• Sound monetary policy: "The Federal Reserve Board is the ultimate, independent arbiter of monetary policy. It is essential that its appointees are highly qualified individuals who understand that stable, low inflation is an input - not an impediment - to durable economic expansion and stronger economic growth."

A commitment to fiscal discipline is just one of the ways in which Mayor Giuliani is appealing to conservatives.  Earlier this week the Wall Street Journal noted that his views on climate change have been "quite sensible": "He has questioned the extent to which global warming is caused by man-made activity, saying the science "is not in" on the issue, and has advocated nuclear power as a means of creating clean energy."

* "That is what I did in New York' -  voters will be hearing that message a lot from 'America's Mayor' as he promises a return to competence.

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BritainAndAmerica.com will be posting later on John McCain's major speech on Iraq.