Wednesday, February 5, 2014

Lord of the Pounds: The Twisting of His Words.

For anyone reading this blog, if you know me then you know I despise liars, especially when the liars try to manipulate people out of fear of the unknown. I'll endure until I reach a point where I have to speak up. There is only so much bullshit a person can listen to or read before it pisses him or her off, after all. Better Together, the campaign to keep Scotland in the UK, crossed that line last week.

Last week, after a meeting with the First Minister of Scotland (Alex Salmond), the governor of the Bank of England( Mark Carney, who should be very familiar to my Canadian friends out there) released a statement. This apolitical statement would go on to have ripples in the political sphere, but not for the reasons the Governor may have assumed it would.

So a little bit of background is in order here. For those not up to speed on the British political scene, you may have some difficulty following this, but bear with me! 
This September, there will be a referendum in Scotland to decide if people living there wish to become an independent country. Vote yes and the country splits from the rest of the UK in 2016. Vote no and the country stays part of the UK. Simples. As with any political referendum though, it gets increasingly partisan as time goes on, with both sides calling each other out over everything from rhetoric to economic matters. There are numerous issues that need to be talked about should Scotland decide upon an independent path from the rest of the UK. One of those issues is currency.

The Scottish government wishes to enter into a currency union with the United Kingdom in event of separation in order to continue using the Pound Sterling currency. The Yes campaign mostly follows the line of the Scottish government word for word, so they support this idea too. The opponents of independence, lead by the group that campaigns for the continuation of the status-quo, Better Together, dispute this. They claim that it wouldn't be possible for Scotland to enter into a currency union with the UK, therefore if Scottish people and businesses wish to continue using the same currency as their counterparts in the rest of the United Kingdom, then they must vote against Scottish independence.

This is where Mr Mark Carney, the governor of the Bank of England comes in.

As with all endeavors such as this. The best way of finding solutions to problems that may arise is to talk about them. With the goal of finding a solution to the potential currency problem, Mr Carney met Mr Salmond in Edinburgh. We will likely never know what was actually discussed at the meeting, but we can get a fair idea from the statement released by Mr Carney afterwards.

The statement is far too long to post here, so check the link above for it. I'll try and sum it up though.

 The Scottish and UK governments need to come to an agreement over the terms and conditions of a currency agreement and the Bank of England will implement whatever monetary policy that is decided upon. Sharing is a good idea because it helps lower economic shocks and lessens uncertainty in the financial markets, however Scotland must be aware that it must be able to accept some losses to its fiscal sovereignty should such a union come about, and a banking union must be considered to make sure that a situation like what happened in Ireland in 2008 can't happen in Scotland.

All in all, a fair, detailed analysis that neither points out both the possibility that a currency union is possible, but also the consequences of such a union. In other words, the most logical scenario.

Both sides of the debate immediately came out with all guns blazing claiming this as a complete vindication of their stance on the issue when in reality it was a vindication of neither side..

The comments by Alistair Darling, the leader of the Better Together campaign, are quite interesting though. 

"This is a detailed speech but make no mistake, the governor's judgement on currency unions is devastating for Alex Salmond's currency plans.
"Why? Because the whole point of independence is to break the fiscal and political union that makes monetary union possible."
Mr Darling added: "The governor has spelled out in stark terms the problems of a currency union - above all it needs people living in the rest of the UK to agree to something they have never been asked about." (source BBC)

Why do I say interesting?  I don't want to insult the esteemed Mr Darling's intelligence here, however he makes the claim that to have a monetary union, you must have a fiscal and political union. The EU would like to have a word, Mr Darling. The EU was able to form a monetary union without either. You'd think that for someone with Mr Darling's education, he'd be able proof his own argument against the biggest elephant in the room, but I digress.

Now, If we read Mr Carney's statement again, it's very clear that a banking and fiscal union is needed along with a monetary(currency) union to give it the stability that the Euro never had. Neither of which require a political union to function. As Mr Carney said, what is required is an agreement for the Scottish government to cede some of its fiscal sovereignty, which is pretty much the same as what is currently going on with the fiscal integration in Europe. Wake me up when we see a country called Framentaly appear in the middle of Europe.

Finally, if Mr Darling had actually listened to what Mr Carney said, and understood how governments worked(shocking! given he was chancellor in the last Labour administration) then he might not find himself uttering such falsities. An agreement between countries does not involve the people at all. The people, for better or worse, have no say in what governments decide, other than at the ballot box, where tribal loyalties run highest. If there is an agreement post independence(should it happen), the people won't be asked, therefore the last point is a moot point.

In an interesting turn of events that day, the man who actually seemed to have best understood what Mr Carney said was none other than Mr David Cameron:

"A spokesman for Prime Minister David Cameron said that it was of no "great surprise" that on technical issues the governor of the Bank of England would want to set out his views.
He explained: "The issue around currency is an important part of the debate that is currently going on in Scotland. It hardly seems a great surprise at all, on the technical issues, that the governor of the Bank of England might want to set out his views. 
"I'm sure the people of Scotland will want to be as well-informed as possible." (source BBC)
Again, nothing political at all. Kudos to Mr Cameron there.

The Better Together currency saga does get quite murky fairly quickly after this.  The day after the meeting, the Better Together campaign released this particular press release:

source: Better Together.

I don't think it needs to be pointed out that within this statement lies a false dichotomy, but I'll do so anyway. 

"Yesterday was a turning point in the referendum campaign. The governor of the Bank of England's message was perfectly clear. You can have independence or you can have the pound. You cannot have both."
If we reread over what Mr Carney said, there is no basis for this blatantly false statement. The governor clearly states that if Scotland does want to keep the pound in the event of independence, then it would have to cede some fiscal autonomy to the Bank of England / rest of the UK. A fiscal union is currently uncharted territory(however the EU is moving towards that), but its not an unworkable solution if all sides are willing to suck up their pride and work together. Better together makes it sound as if there is a stark black and white choice when its clearly not the case, akin to George W Bush's now infamous 'You're with us or against us' speech. Nothing this complex is black and white, no matter how groups try to paint it. By setting up a false dichotomy like this, Better Together are in effect, arguing against a strawman. They are misconstruing their opponents, thinking that the people are too stupid to understand Mr Carney's speech.

It does get better though. As mentioned in the press release, Better together has begun distributing a pamphlet to continue arguing against their strawman. This folks, is that pamphlet:

After searching around the internet, I came across this on a nationalist website. Not the best source for unbiased news, but the pamphlet itself does seem to check out, so the source should be irrelevant in this (it's only mentioned because its good academic form to reference where you find your materials and quotations (journalists, please take note!)).

I don't know about you, but when I saw this leaflet for the first time, this is what I thought of:
Source:   ThinkProgress 

The pamphlet starts on a false claim that the Governor of the Bank of England criticized the First Ministers claim that its possible to keep the pound. As has been thoroughly discussed above, that is an entirely possible scenario provided the Scottish government is willing to cede some of its fiscal independence in exchange for political independence. Not the scenario that they wanted over at the Yes campaign, but not a total loss for them. Again, the Governor was completely unbiased in his analysis. Both sides battleships were hit, so to speak. One thing he did not do though was criticize. The only person doing any criticizing in the aftermath of that meeting was Alistair Darling, the head of Better Together. The logic gets a bit circular at this point. Mr Darling criticizes his opponents in the aftermath, then his team use those criticisms as proof that the Nationalists are wrong. Why do those criticisms have weight? Because the Governor meant to say them. But how do we know that the governor meant them? Because Alistair Darling said so. A confusing mindfuck.

Trying to understand the logic behind the pamphlet results in this. Don't try this at home.
Now that that is out of the way, we are left with what is essentially a strawman argument. The very same strawman that has been floating around since 2007, or possibly even 1999. The rest of the pamphlet after the second paragraph is dedicated to beating on and urinating upon the said strawman. Eww. It's a classic argument against an empty chair in the form of scaremongering about a non existent threat to your way of life.Its a red herring meant to distract people from the real arguments (again because whoever made this leaflet and OK'ed it for production thinks the entire population of Scotland is too stupid to understand what was actually said by Mr Carney) that should come from a positive point of view. If Better Together wants to convince people that independence is a bad thing, then they have to do it by pointing to the benefits of the union. Trying to fearmonger by misconstruing the words of the Governor of the Bank of England and misattributing your own leaders opinion as that of the Governors in order to support your own agenda is quite frankly deeply offensive and shows a sickening level disdain for the intelligence of the people. It shows us that such an individual is nothing more than a liar.

Final, closing remarks:

I would agree that any agreement to keep the pound would need to encompass a fiscal union of some sort and that was the case that was made by the Governor. A political union is a whole different animal though and not one that the Governor brought up. That was an interjection by Alistair Darling based on his interpretation of the statement, and that interjection was treated as if those words were the golden words of the governor himself. That's one of the main things I take issue with. It is not cool to make a circular argument and then pass it off as the argument of someone with authority. Its childish and unbecoming of the leader of one of the sides in this debate.

With regards to the idea of a political union being needed, It is a subject that could be debated, and it would probably be a worthwhile use of resources if Better Together actually researched that and then argued that case, rather than making an assertion about it and passing it off with a misattributed appeal to authority (and then...arguing with the chair). There is no basis to argue that point within the scope of the governors statement, and such an argument therefore would need to find reference somewhere else.


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