The week in politics: Hanging, hacking and hysteria

Feeling flustered? The markets returned to panic mode this week.
Feeling flustered? Tghe markets returned to panic mode this week.

Just when you thought the future might not be a post-apocalyptic wasteland after all, the markets go and let you down again.

By Ian Dunt

The hysteria began on Thursday afternoon. Living under the influence of the market is like being held hostage by a paranoid schizophrenic with the biggest gun in the world. It's as if the planet is run by people who occasionally realise that no-one knows who is running the planet and proceed to suddenly panic.

We have nothing to fear but fear itself, as Roosevelt once said. Well, there was plenty of fear itself to go round as investors looked at Washington and Brussels and decided that, all things being equal, they did not constitute a reassuring sight.

The irony is that this might play into the hands of the government rather well, in that it makes sterling more attractive and seems to vindicate some of its economic decisions. That only works to a point though, as without growth in America or the Eurozone, you won't see much growth in Britain. George Osborne started the week by celebrating an IMF report that said whatever you wanted it to say. It was the financial assessment equivalent of buying 'his and hers' mugs for a wedding gift. Things got a little edgier when campaigners pointed out that at least 2,000 charities would lose funding due to local council spending cuts. That made David Cameron's perpetual and increasingly mad 'big society' rhetoric seem superficial, to say the least, but if objective reality was going to have any effect Downing Street would have given up on this agenda months ago.

The hammered living standards of lower- and middle-income families did little to prevent prominent Conservatives thinking that the 50p tax rate should be cut for high earners. Danny Alexander suggested the idea was mad over the weekend and Vince Cable later made it quite clear that it's politically impossible. But Osborne and Boris Johnson are intent on showing the Tory grassroots how indelibly right wing they are in preparation for a 2020 leadership battle, so it will probably happen sometime in the next couple of years. Watch out for the gifts Lib Dems get in return. Capital gains tax? VAT U-turn? Lower income groups taken out of the tax system? It'll probably be the latter but you never can tell.

None of it mattered by Thursday, when we were all back to staring at our computer screens, feeling the icy touch of chaos lapping at our heels as the markets tumbled. "Stock market falls," one journalist tweeted. "Can someone who knows about these things explain if we're all doomed or not? I want to know if I should panic. Specifically, when does it turn into The Road? How far are we away from that?"

With ministers on holiday there was no-one to take charge. But their absence had another curious effect. With nothing going on, the Westminster village continued to work itself into a fit, but over nothing at all. The particular kind of nothing it chose was capital punishment, which was expected to lead the field among the new e-petitions system. The initiative triggers a Commons debate once a petition gains 100,000 signatures. Right wing blogger Guido Fawkes wrote up a dirty ditty on bringing back hanging, everyone reacted with outrage and then it proceeded to gather, well, no support at all really. In fact, a counter-petition calling for the law to stay exactly as it is easily outstripped it. Given that even if the petition reaches 100,000 signatures it would be nigh-on impossible to turn it into law, the whole debate managed to show up the Westminster bubble for what it really is: an army of people who like arguing regardless of whether there's a reason to do so or not. It gave you some idea of how foxhunters must feel when they replace the animal with a scent.

What would a political week be without the phone-hacking saga providing a bit of background music? Key points this week: News International deleted a bunch of emails, but we might get them back. Former News of the World and general editorial human shield Stuart Kuttner was arrested. Jonnie Marbles got six weeks for throwing foam in Rupert Murdoch's face (reduced to four on appeal). And Piers Morgan, who is considered a national treasure in a parrallel universe where the Germans won the war, found himself increasingly connected to the whole grubby business following a Newsnight interview with Heather Mills. Reports that he'd been let go from his job at CNN proved ill-founded, but there were worrying signs that he may have to return to the UK to answer select committee questions, a fate once treated with condescension but which now carries some weight. It is a strange and marvellous world we live in. Enjoy it while you can. Financial Armageddon should be all good to go by Monday morning.


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