Tom Arms’ World Review

Mahsa Amin’s death

They are burning their headscarves and police cars in Iran. Persian women are fighting back against the mullahs’ morality police. The catalyst for their anger is the death in police custody of 22-year-old Mahsa Amin. The Iranian authorities claim she died of a pre-existing heart condition. Rubbish, say her family, there was nothing wrong with her heart. She died, they claim, because she was beaten in the police van on the way to the station. Ms Amin was arrested because she was wearing her hijab or head scarf improperly. That is common offence which the morality police monitor along with the wearing of tight trousers and leggings, holding hands or kissing in public.

Iran is not the only Muslim country with morality police. Afghanistan has probably the most severe. Iran probably holds the number two slot. Others include Nigeria, Sudan and Malaysia. Then there is Saudi Arabia where the ruling family’s adoption of Islam’s strict Wahhabi sect led to the establishment of the notorious Committee for the Protection of Virtue and Prevention of Vice. Better known among Saudis as simply “The Committee.” Crown Prince Mohammed bin Salman, however, has been circumscribing the morality police to the point of near extinction. The backlash in Iran may force the Mullahs to follow suit which can only undermine their wider claim to political legitimacy.

Another lurch to the right in Europe

Europe is taking another lurch to the right. This month two national parties with links to a fascist past have either come to power or are poised to do so.

Sweden has been known as Europe’s most tolerant country towards cultural diversity. But this month the rabid anti-immigrant Sweden Democrats emerged as the second largest party and is forming a government with the centre-right Moderates.

In a disturbing echo of Donald Trump, party leader Jimmie Akesson declared it was time to “Make Sweden Great Again.”

Georgia Meloni, leader of the Brothers of Italy has an equally upsetting motto which links her party to its fascist past—“God, family and fatherland.” Ms Meloni is expected to emerge as Italy’s prime minister after Sunday’s vote. Her party is Eurosceptic, anti-immigration, anti-gay, anti-abortion and has expressed doubts about NATO membership.

Italy and Sweden join Hungary, Britain, Czech Republic, Slovakia Austria and others who have lurched rightwards. There are differences between them but the one common element is the disturbing trend to portray their country as a victim.


I have just returned from Iceland and can report that the isolated, sparsely populated land of fire and ice is just as worried as everyone else about Ukraine.

The main reason is its strategic location. Iceland straddles what is known as the Greenland-Iceland-UK-Gap (or GIUK). Through this gap Russia’s deadly submarine fleet and deadlier underwater drones must pass to reach the North Atlantic.

The GIUK Gap is the reason Iceland is a member of NATO even though its population of 370,000 is unable to support any military. NATO needs Iceland as a base from which to monitor Moscow’s undersea activities and Iceland needs a NATO umbrella.

In 1951 Iceland and the US signed a defence agreement which committed America to its defence in return for a monitoring base at Keflavik. At the height of the Cold War there were 5,000 Americans based at Keflavik Air base.

Then the Cold War ended. The planes, helicopters and soldiers were needed in Afghanistan. In 2006 the American flag was lowered, the troops disappeared and their facilities were sold to Icelanders at bargain basement prices.

Russia’s resurgence, however, has caused a rethink in Washington and some troops and surveillance aircraft have returned. But there are problems with a return to the good old days.

The party of the current highly popular Prime Minister Katrine Jakobsdottir wants to pull out of NATO and most of the Keflavik facilities are no longer available. To solve the latter problem Washington is looking at Northwest Iceland for a completely new base. For the second they are being very quiet about returning in order not to upset Iceland’s domestic political apple cart.

One thing the Icelanders do not have to worry about is the energy crunch. Ninety percent of their energy is geothermal. The remaining ten percent is mainly hydro from Iceland’s many beautiful and dramatic waterfalls. The geothermal energy comes from the hot springs heated by roughly 130 active volcanoes whose molten lava turns the water into scalding steam which turns the turbines in five major geothermal plants. So much hot water is created by Iceland’s volcanic geology that it is pumped directly into people’s home radiators, through under-pavement pipes to keep them ice-free in the winter and into public swimming pools. There are even plans to export their geothermal energy. In the meantime they are just enjoying their low heating bills while the rest of Europe sweats it out.

Markets slump after UK “mini-budget”

The markets delivered their verdict on Britain’s “go-for-growth” mini-budget even before Chancellor of the Exchequer Kwasi Kwarteng finished his speech and sat down.

The FTSE 100 plummeted by two percent as investors dumped UK assets. The pound plunged against the dollar to $1.11, only six cents above its all-time low of $1.05 in February 1985.

This was the exact opposite of the reaction Prime Minister Liz Truss expected. Her plan is to fight inflation, low growth and low productivity by lowering taxes so that rich people and companies spend more in Britain. It is the Truss version of Ronald Reagan’s trickledown economics.

A plan to raise corporation tax to 23 percent has been cancelled. It is staying at 19. Banker’s bonuses are no longer capped and the top rate of income tax (45% for those earning £150,000 or more) is scrapped. The 31 million people (Kwarteng’s figure) at the bottom of the pay ladder will be £3 a week better off which doesn’t even cover the cost of a pint of beer.

Those at the bottom of the top end of the pay scale earn about five times as much as those at the bottom but will be 50 times better off when the government’s budget takes effect next April. They will be able to buy a bottle of vintage champagne every day.

The tax cuts are being accompanied by up to £120-150 billion of government borrowing to subsidise a cap on energy prices. This at a time when the Bank of England is expected to raise interest rates by half a percent.

The hope is that the newly richer will spend the extra cash and stimulate the economy. But trickledown economics have never worked in the past. Neither markets or most economists think they will work in near-future Britain, especially when the government is borrowing two percent of its GDP.



* Tom Arms is foreign editor of Liberal Democrat Voice and author of “The Encyclopedia of the War” and the recently published “America Made in Britain". He has a weekly podcast, Transatlantic Riff.

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  • Steve Trevethan 25th Sep '22 - 8:24am

    Might we help our country if we were to clearly reject Neoliberal Economics which is the cause of many of our socio-economic problems?

  • Martin Gray 25th Sep '22 - 9:28am

    @Martin …
    After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, “it is hard to think of another utopia to have been as fully realised…

    A quote George Monbiots book – How did we get in this mess ….Worth a read as regards Steve’s point ..

  • @martin…
    It’s a quote from George Monbiots book – how did we get in this mess ….
    As I said, it’s worth a read as regards the point Steve is making…
    A significant number of Social Democratic parties have been on the decline in Europe over the years…
    As being one – maybe we should ask ourselves why ?

  • nigel hunter 25th Sep '22 - 11:11am

    The rich business men get the money.They will put it in the bank and not invest it in the country cos to invest and get a return they need a stable economy.At the moment everything radiates uncertainty so that money will not be invested in the economy.That does not lead to growth.
    We used to have wages rise with inflation. Whilst it was not ideal people had money to live and spend.Today inflation rises ,wages do not. Those who WOULD spend the money have not got it.The economy therefore suffers from those with money not investing and those who WOULD spend it not having money to spend.A recession ensues.

  • Peter Martin 25th Sep '22 - 11:14am

    @ Martin,

    You are correct to suggest that Truss and Kwarteng’s policies are well outside the Maastricht guidelines. They’ve understood, perhaps from MMT, that they don’t need taxation revenue to spend on the rich! They probably haven’t understood the inflationary implications, though, as many, including some from a MMT persuasion, have pointed out to them.

    Neoliberalism and Ordoliberalism are valid terms though. Their Wiki entries seem OK to me but anyone who disagrees is free to edit them.

  • A plan to raise corporation tax to 23 percent has been cancelled. It is staying at 19.

    So not a tax cut.

    Banker’s bonuses are no longer capped…

    Performative; banks merely raised basic salaries to compensate.

    …and the top rate of income tax (45% for those earning £150,000 or more) is scrapped.

    Restoring it to what it was under the last Labour government. Since it only raised £2bn it’s hard to see why it was ever raised in the first place.

    This at a time when the Bank of England is expected to raise interest rates by half a percent.

    Not nearly enough. The real base rate is currently below -7%.

    …trickledown economics have never worked in the past. Neither markets or most economists think they will work in near-future Britain,…

    ‘The hysterical over-reactions to the Budget betray ignorance of history and economics’:

    The problem is that many observers – including Left-leaning economists in the US, in financial institutions and international bureaucracies – don’t understand what Mr Kwarteng is trying to do. Their economic understanding is too narrow and conventional, their models faulty. He is a supply-sider, not a Keynesian: he wants to boost incentives to increase investment and work. Mr Kwarteng and free-marketeers believe that it is the job of the central bank to control inflation, and the role of the state to drive growth via reforms.

  • This type of budget has been tried before and has failed before, to keep on revising these policies in the vain hope they will work this time around is totally naive ,and constantly inserting quotes from the ” Torygraph” will certainly not convince me otherwise! My historic memories do not fill me with confidence either.

  • Steve Trevethan 25th Sep '22 - 12:11pm

    For those who are unsure about the existence of Neoliberal Economics might start by reading “23 things They Don’t Tell You About Capitalism” by Ha-Joon Chang and “Debunking Neoliberal Dogma: Simple Responses to 20 Common Arguments for the Omnipotence of the Neoliberal God” by Gavin N. Karr.

  • Steve Trevethan 25th Sep '22 - 12:14pm

    Might it also help if the people running the U. S. A could be persuaded to stop trying to dominate the whole World for their benefit?

  • Peter Martin 25th Sep ’22 – 11:14am:
    They probably haven’t understood the inflationary implications, though, as many, including some from a MMT persuasion, have pointed out to them.

    Inflation is unlikely to be a danger in the current situation. Most of the ‘tax cuts’ are actually just the cancellation of planned rises (Corporation Tax) or a roll-back to previous rates (National Insurance / top rate Income Tax). The tax burden is still at an historically high level. The intervention to reduce energy prices is expected to reduce the CPI by 5%. During the Barber Boom of the early 70s and the Lawson Boom of the late 80s, the money supply was allowed to get out of control, as was pointed out at the time by those of a monetarist persuasion. The BoE’s ‘independent’ Monetary Policy Committee with a clear target for ‘inflation’ and further Quantitive Tightening should prevent that. An extensive programme of deregulation and supply side reform will also help to reduce inflationary pressures.

  • The planned increase in corporation tax was to 25%, not 23%. That’s significant as it would have raised the UK rate to above the US rate (including state taxes) for the first time in living memory. That would have resulted in an exodus of skilled jobs (that in turn attract corporate profits) from the UK to the US & elsewhere, and almost certainly would have actually reduced the overall corporate tax take in the UK. So a really dumb idea. That’s why successive govts (Lab, Coalition, Tory) resisted such a move and it was Rishi Sunak who was the outlier.

    I don’t have a lot of time for the other measures Kwarteng announced in his fiscal event, but reversing the massive corporation tax rise was eminently sensible.

  • Julian Tisi 26th Sep '22 - 2:18pm

    Another lurch to the right in Europe:
    While noting the similarities with Trump and the UK in the move to the right in some countries in Europe, it’s worth pointing out a key difference: in these other countries there are proportional voting systems and coalition is commonplace. Thus the far right parties which we worry about won’t necessarily have it all their own way. This need for coalition is a moderating influence we don’t have here with one-party government the norm.

  • Julian Tisi 26th Sep ’22 – 2:18pm:
    This need for coalition is a moderating influence we don’t have here with one-party government the norm.

    Both Conservative and Labour governments are effectively coalitions – formed before being elected rather than afterwards.

  • Julian Tisi 26th Sep '22 - 4:10pm

    @Jeff “Both Conservative and Labour governments are effectively coalitions – formed before being elected rather than afterwards.”
    I’m not at all convinced that the various wings of Labour and the Conservatives moderate their parties once in government. The right of Labour had little influence over Corbyn; the left and centre of the Conservatives aren’t holding back Truss. But the Lib Dems definitely held back the Conservatives from their worst extremes during the coalition, whatever our opponents (and some of our internal critics!) might say.

  • “The pound plunged against the dollar … This was the exact opposite of the reaction Prime Minister Liz Truss expected.”

    I’m not so sure. Credit her with knowing that, if there is to be any growth generated by this fiscal loosening, it will come from the drop in the value of sterling. That will boost exports and promote domestic products that are alternatives to increasingly expensive imports. Of course, Truss will claim that any growth was from the trickle down following the tax cuts for the wealthy, not from the fall in the value of the pound, and will ignore the fact that the growth generated will not be sufficient to offset the increased cost of servicing the UK’s ballooning sovereign debt, but from a “generating the appearance of growth” pov, a fall in the value of sterling is probably what she was aiming to generate. Do you not think so?

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