Checks, please

This past weekend, I found myself sitting at a social dinner opposite one of the country’s most senior civil servants. It is not often that one meets a “Sir Humphrey” (If you don’t remember the brilliant sit-com “Yes Minister”, this reference might be lost on you) and even less often one dressed in jeans and a jumper and full of Crozes-Hermitage. Evidently it would have been inappropriate to ask certain questions but we did speak at some length about the invisible Scotsman who abolished the boom and bust cycle and who saved the world.

Having worked with Tony Blair, with the aforementioned Scotsman and with the current Cameron administration, the gentleman in question had much of interest to add to our understanding of the personalities of the respective prime ministers and it was in respect of the middle one of the three that the most interesting observations came to light.

My dinner partner suggested that the Scot was like a man on a mission, that he had a phenomenal belief that what he was doing was right and for the best and that – and this was the crux of what was said – he would have been prepared to employ all means, fair of foul, the achieve his ambitions. He failed to understand that if others could not share his vision, rather than to question whether their scepticism might be soundly founded, he would contrive to flatten them and to pursue his aims, irrespective. This, it appeared, was not some small-minded political malevolence but an unshakable belief in the “mission”.

Having listened to the gentleman with the greatest of interest, I looked at him and asked whether there might not be some comparison with the late Richard Milhous Nixon, 37th President of the United States and one of the most reviled in its history. He hummed and agreed that that was not a view he had previously considered but that there might be some merit in that line of thinking.

However, the key theme which held the conversation together was the one of checks and balances and how, had these not been in full working order, the respective presidency and prime ministership could have ended in abject disaster. Although it never entered into the dinner conversation on Saturday, the current impasse in Washington could quite easily have become a part of the exchange.

The new Nixon?

Again it is about checks and balances, a concept which is heaved around with gay abandon but the meaning of which, as far as I can tell, very few people ever stop to consider. Checks and balances, checks and balances, checks and balances! I heard a very incisive comment on the wireless this morning during which the speaker – I sadly missed who it was – reminded that if President O’Bama cannot bring enough of his opponents to agree that his course of action is valid and correct, it therefore does not hold water and ought to be abandoned. The speaker was prepared to concede that this is not at all the received wisdom in respect of the fiscal stand-off but that it was, nevertheless, correct. I cannot disagree.

The President has made much of the manner in which, in his words, he is being held to ransom by Congress. No. The process of checks and balances is alive and kicking and although we might not like the effect which they are currently creating, they are doing what they were meant to do – to prevent law which cannot command majority support from being implemented.

Like it or not and irrespective of how odious the opinions and actions of some of the right-wing Republicans may appear to be, the system is working in the manner in which it was designed to do and it is incumbent on the players to accept that. That the Republican faction in the House is losing popular support and might quite possibly crumble is more due to lousy PR than, as is broadly believed, a break-down in the political process.

The President appears to be nearly as willing as would have been Richard Nixon or the Invisible Scotsman to permit the end to justify the means and the fact that the battlefield on which the two sides are meeting happens to be one which holds the global economy and global markets in suspense might, in the fullness of time, be seen by constitutional historians as more than co-incidental than it is key.

Meanwhile, today is Columbus Day in the US and bond markets join the government in being closed although equity markets do not take this as a holiday. We, here in Europe, can only wait to see what Wall Street will decide is the way to trade the latest slings and arrows of the political process while the backlog of unpublished economic statistics grows by the day.

Closer to home, Mutti Merkel is still busily trying to find a governing coalition. Bit by bit the SPD has conceded ground and it now looks likely that she will meet her target of announcing a new government by the week-end.

One bone of contention remains the finance ministry which the SPD would dearly like to have. SPD leader Peer Steinbrueck was finance minister himself in the last grand coalition from 2005 to 2009 and we must therefore face the possibility of the highly respected Wolfgang Schaeuble becoming a very prominent victim of the political bargaining process.

To me, that will be an event which is to some extent more relevant to future dynamics in the eurozone than the spat over the debt-ceiling will be to that of the US of A.