The Problem With UKIP And Other I I P's

By: Andrew_McKillop

IIP's or The Instant Independence Parties
Before the howls arrive on my doorstep accusing me of personality assassination of Nigel Farage, I will clearly say Nigel Farage is a nice man who is probably kind to animals and small children. He is also opposed to Scottish independence because it would be “the wrong political and economic flavour” for him. It would be Statist and Taxist (which is a word I offer him). It would increase national debt. It would fritter away the oil and whisky and other things, and its national money would go down the tube. It would be a Nanny State truly at home in the EU. It would be bureaucratic and meddling. It would probably start losing football matches, but that one is not yet on Farage's “No” list.

If you can imagine the opposite of all those things, and have no plan at all to bring those opposites into the real world, you have the UKIP.  Welcome to Wonderland.

The IIPs, especially in Europe are a definite growth industry, due to economic decline and other kinds of decline and they all have a Wonder List of “No's” like Farage's UKIP which for example says that France's National Front IIP is a “No”. The National Front, which can't be faulted for its long list of instant-fixes for everything, is bad company for Farage, Most of all, like any IIP, the National Front's so-called “economic plans and programs” are absolutely not concerned with the real world, but in its case it also has a racist platform, like some other IIPs, and Farage doesn't like that.

Keep the fantasy clean! For the UKIP  and self-described “constitutional” IIPs, racism is off the menu and the party's job is to draw up a long-long list of “what doesn't work” and then imagine and say the exact opposite. Done deal!  Asking them to do it is also not on the menu, one reason being that a lot of the IIPs, exactly like UKIP, either can't win seats in their own parliaments, or don't want to, and prefer to get seats in the EU Parliament in Strasbourg. When nicely ensconced there with their aides who are rather well paid by European taxpayers, they say the EU Parliament serves no purpose except to defeat democracy and should not exist. Nice business model!

The Magic World of Instant Independence
Plenty of IIP policy makers and intellectuals have an intimate conviction that Adam Smith and-or David Ricardo defined the Good Economy once and for all. The IIPs usually call themselves “liberal leaning” (unlike Scotland's SNP and a few other IIPs) and one major difference between today and the times of Smith or Ricardo was that in those times there was no EU Parliament for IIP politicians to have a seat, and get paid to say the EU Parliament should not exist!

One reason the IIPs are “surprisingly acceptable” to mainstream political parties, especially the Conservative and Deep Blue fringes, is not only their no-competition tiny number of EU Parliament seats. Their economic and social plans and programs are often plain magical and the mainstream parties are always looking-out for things to add new enticing spin to their drab No Alternative platforms. For example Marine Le Pen's National Front would not only pull France out of the EU and dump the euro money, but would also set up tariff and trade walls – not only for France but the whole of Europe – after quitting the EU! Plain magic.

For various reasons the times and notions of Smith and Ricardo seem cozy to many IIPs,  a jump back to well before Karl Marx and not long after the French Revolution. In brief, the IIPs seem to offer a cozy middle class revolution in cozy and mostly little new nations, after which “things would be better”.The tourists will love the new road signs in strange new (or old) languages.

The French Revolution was in fact light years away from “cozy petit bourgeois”. In the first six months, only in Paris, there were possibly 5000 public decapitations by the then-newfangled and dreaded guillotine. ISIS has really serious competition! In the single much smaller city of Nantes, probably 4000 persons were publicly drowned in a couple of weeks, for “counter revolution”.Some of them were Swiss or English or Italians or Spanish – dangerous foreign races, so they were killed. It was very exciting and uplifting for the French at the time.

IIP intellectuals will tell us about “The Wealth of Nations” and what they glean from it, but in the times of Adam Smith, his own native Scotland had several “local nations”, with local mints producing local moneys.  “Natives” were anybody from any one of them. They had a “nation”, and its money, and the “nation” was de facto independent even if it wasn't de judere independent.. This of course goes straight off the top and over the heads of IIP intellectuals, because they want Magic Transformation...

Long March Back to Independence
Whatever happens after the Scottish “No” vote there will be more so-called Devolution. For my part, I was impressed by the number of “Yes” kamikaze voters – millions of them including a straight majority for the Yes vote in Glasgow and about 71% of Yes votes for under-20s in Scotland- for the arguments of Scotland's very own IIP, the SNP.

Being unkind to the SNP, it basically says that for as long as the oil holds out and the whisky stills keep turning, we can finance a Welfare State. Things like national debt are purely political and concern the duplicitous English more than us. The Union of 1707 was an unequal treaty greased by English gold. It was a central bankers' plot.

The Catalans and Bretons and Corsicans and Sardinians (and France's Le Pen) say almost the same thing. In fact the Mafia of Italy often said the same thing. We haven't yet heard that from ISIS (terribly busy with its public execution program) but it is almost certainly coming because they are now on $2 million-a-day of revenues from stolen oil.  The IIP party platforms often get Red-colored when it concerns banks, and they nearly all say they want a national central bank all to themselves, but they don't want any debt.

Many IIPs (but Nigel Farage stays carefully ambiguous on this one) would in theory repudiate national debt when or if they get power. They would create their own central banks rather fast. How “the markets” so beloved of Adam Smith will react to that situation is an interesting subject. The markets handling public debt and government bonds, as well as FX foreign exchange markets would obviously become “rather febrile”. This would reveal the existence of de facto and known Independent Parties  - called the central banks. They would have to slug it out with the shadowy New Nations thrown up by the Long March of the IIPs. Don't cry for me Argentina!

The healthiest result of “bringing the dirty washing out in public” will be the forced acceptance that something serious has to be done about national debt, and not the central banker imbecile theory of what should be done. This was certainly a key undercurrent theme in the Scottish referendum debate due to neither Scotland's nor England's public debt being possible to pay down. With the “No” vote this scary subject can be tucked back in the closet for a while, but not forever. Political independence – in theory – should mean monetary and economic independence- but to do what? The central bankers are already highly independent, and that is a fact.

Little Nations and Big Debts
We can imagine David Cameron and his ilk saying “Phew, that was a close one! We almost got forced to talk about the debt!”. The IIPs don't like talking about the subject, either, but when they do it is a great subject for pure fantasy. Marine Le Pen, if ever asked to say something about public debt either avoids answering with anything coherent or refers to the strange rantings of her father, who talks about  France's debt problem starting in 1963 with the Algerian war being lost by France. Perhaps that means any debt since 1963 is “illegitimate”? He says the war was lost by France because of “foreign bankers” but if France had kept Algeria as a part of the nation, his IIP says that no immigrants from Algeria will be allowed into France – their own country!

Fantasy stuff is always available from the IIPs, but when it concerns those big debts the IIPs are in the Little League. Taking only the four-largest central banks in the developed world – the US Fed, ECB, Bank of Japan and Bank of England – they have printed up and issued about $11000 billion of “new money” since the start of 2009, and are still going strong! For the approximate 850 million total population of the USA, the Eurozone-18, Japan and UK that makes about $12500 of “new money” for every single man woman and child since 2009.

Simply calling for “a debt freeze” and possibly “a new national money” which are common IIP platform material, is absolutely a case of shutting the stable door after the horses ran away. When they get into the “deep insights” mode, at press conferences, IIP leaders like Nigel Farage will say they can “turn the economy around”. They will relaunch and reform and restore, but the problem is the mainstream parties say exactly that, also. This is drastically unrelated to the real economy – of stagnation – for the UK of course if you don't believe the spin-doctored numbers on the economy. For most other EU countries their leaders don't even make the pretence any more. Just let the ECB print and forget. So one day or another it will happen. The IIPs in one or several countries will get power and then we will have a real firework show - like those independence celebrations the Scottish decided not to have, this time around! Not yet enough debt, perhaps?

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2014 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.