What a difference a week makes.

In what was surely one of the finest party conference speeches for years, David Cameron, Leader of the Conservatives, showed Gordon Brown how it should be done.

In place of last week’s straining for effect and amateur theatricals, Cameron produced a professional performance of flair and depth of character shot through with real passion. It was also politically and philosophically coherent.

To compare him with Tony Blair — regarded by some as “the master” — is to judge serious accomplishment against fraud and artifice.

No, Cameron must now be viewed as the genuine article, a fully-fledged Prime Minister-in-waiting.

He even managed a rousing peroration, conveying hope and excitement — and more than a few tears from an ecstatic audience in Birmingham’s Symphony Hall.

In a way it was eerily Thatcherite. There was the same scalding sense of challenge and mission, this time social as well as economic. After a period of “detoxifying the brand”, Cameron has moved rapidly onto traditional Conservative territory, daring to contemplate tax cuts while artfully not budging an inch from his earlier concerns.

He promised “sound money”, an end to political correctness, the health and safety neurosis, and, eventually, lower taxes.

A fierce attack on the educational establishment clearly resonated with the audience: there would be an end to the practice of “all shall have prizes” and of deliberate dumbing down. This was heady stuff. A catharsis after eleven years of poisonous frustration.

The Tory theme of the broken society was rehearsed at length. Old-style punishment was blended with concern for the causes of criminality. The work of former leader Ian Duncan Smith was well in evidence.

The speech was compelling not just because of the competent delivery but for its refreshing outlook, and the complete absence of the counter-intuitive nostrums of the Labour government that often sound as if they are made up by half-witted fantasists.

It was noticeable that the biggest rounds of applause greeted the most straightforward expressions of disgust with the present government’s worldview.

I imagine the Prime Minister is feeling rather bruised right now, especially after the tentative improvement in the polls last week.

On this showing, David Cameron can look forward to an even bigger bounce in coming days.

All he needs now is a General Election.

In the days of sail, when ships were built of wood and were vulnerable to hostile warships and pirates, each ship had many bulkheads to isolate parts of it that were hit.

In the later days of giant ocean liners made of iron, wealthy passengers demanded large ballrooms and restaurants so the bulkheads disappeared. One of the first of these new vessels was the Titanic. It hit an iceberg and the rest needs no retelling.

We’re having our own Titanic moment now in the world’s financial system, where the bulkheads that protected us have mostly been removed. In the 1930s, America had the Great Depression, but Britain was comparatively unscathed. In 2008 we share the pain.

As David Brooks puts it in the New York Times, “We’re living in an age when a vast excess of capital sloshes around the world fueling cycles of bubble and bust. When the capital floods into a sector or economy, it washes away sober business practices, and habits of discipline and self-denial. Then the money managers panic and it sloshes out, punishing the just and unjust alike.”

Globalization is not new. The 250-year British Empire was a globalized trading system, depending on the might of the British Royal Navy — which had 50 percent of the world’s warships and most of its merchant fleet. It had the muscle and authority to protect its own national interests. That has been lost in modern times.

Transnational private-equity capital, almost all of it borrowed, has swept in and bought up most of our major corporations — on both sides of the Atlantic. These highly-leveraged buyouts seem benign in times of rampant expansion. However, it only takes a small twitch in the markets for the dust-thin financial structures to become sickly.

That also applies to banks that have followed suit and lent much more than their capital should allow. When the assets on their books are impossible to value because of the extent of toxic debt, the game is over.

The biggest question we will have to answer once the financial system has been stabilized, and the toxins isolated like nuclear waste, is: how much should we retract from globalization? In the age of the internet, is that even possible or desirable?

There’s no doubt that Britain’s membership of the European Union has degraded the country’s ability to be itself — a quality that has always paid off in the past.

On the other hand, staying out of the euro currency has shielded us from lower interest rates than we needed during the boom times. It also leaves us free to set optimum rates instead of relying on blunt fiscal instruments as the Irish, Spanish and Italians are having to do. This is one bulkhead that has more than proved its worth.

The EU’s decision to adopt the Basel 2 accounting standard of “fair value” or “mark to market” is having a devastating effect on our banks, whose diminishing capital is daily undervalued by the system, especially in hard times. The standard is as toxic as American mortgage securities.

While the U.S. is planning to ditch Basel 2, the EU’s directives will take years to repeal, and would need 27 countries to agree to it. Britain, should, as a matter of urgency scrap Brussels’s hold over our financial markets.

On some estimates, 84 percent of British laws are now made in Brussels. Most of them are counter-productive in a British context, obsessively bureaucratic, prescriptively inefficient and despised by the population. This heedlessly dispensed-with bulkhead is deeply desired and its absence bitterly resented. We should restore it as a matter of urgency.

I suspect that globalization has passed its peak. Without descending into full-blown protectionism, most nations will consider rebuilding some of the bulkheads that gave them their national characteristics, while minimizing restrictions on free trade. With tariffs low across much of the world, there is no need for global institutions to gum up the works with legalistic complexity.

Much of globalization is unnecessary and faddish, urged on us by old international Marxists and student Trotskyists like Gordon Brown and New Labour. They should be rejected.

America too should beware of whom it is electing to office in November.

It’s time to return to simplicity, fleetness of foot, and self-reliance. We would be much better nations if we did. And happier too.

John Evans

Related Stories
Depression looms like a yawning abyss
The Great Harvard Sausage Scandal 2008
Silicon Valley and the credit crunch
Insurers crumble as financial structures fail

Update: The U.S. House of Representatives has rejected the Treasury’s $700 billion rescue package. The Dow is down 770 points as I write.

Around a year ago Syntagma was among the first to use the word “Depression” in relation to the trajectory of Western economies.

Today, Monday 29 September, the word is on everyone’s lips.

Despite the rescue package now going through Congress, U.S. Treasury officials are in wild panic mode as truth finally dawns: there is nothing they can do to halt the steep declines in credit issuance that will deliver the most virulent bout of debt-deflation the world has known since the 1930s’ Great Depression.

We are hearing that officials close to Henry Paulson are privately painting a much bleaker picture of the fragility of the global economy than that of President Bush last week.

A Republican is quoted as saying that the message from government officials is that “the economy is dropping into the john. We could see falls of 3,000 or 4,000 points on the Dow. That could happen in just a couple of days.

“What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.”

A spokesman for BNP Paribas said, “Money markets are imploding. If no action is taken very soon, there is a significant risk that the global economy will collapse.”

But what action can be taken now? Imagine a palatial building across many acres eaten through by hordes of termites. Builders rush in to replace a pillar or two hoping to stabilize the structure. But architects shake their heads knowing that nothing can save the rotten edifice from collapse.

The U.S. Federal Reserve fears an “adverse feedback loop” with terrifying consequences. The “liquidation” of failed banks policy that led to the Great Depression is alive and well and raising its head in the Republican party. That may give them a short-term bounce among very angry voters, but the result could be catastrophic.

John McCain, who seemed to be coasting to victory just a few weeks ago appears to be undermined by his own side. His chances of the White House get slimmer by the day.

Central banks in Britain and Europe are maintaining their high-interest rate policy, despite the need to loosen up credit. Libor — the rate at which banks lend to each other — rose again this morning, regardless of the $700 billion U.S. package. They need to cut and cut again despite their genteel anxiety over “moral hazard”.

We are witnessing a slow-motion shipwreck, caused partly by panic, by different officials working to rigid, uncoordinated targets, and by the lack of anyone competent enough to take overall charge and impose a coherent escape route on the entire system.

The politicians have imploded, the bankers have failed, and the markets are reflecting that turmoil in the only way they know how.

How very fragile are the pillars of our civilization.

John Evans

Related Stories
The Great Harvard Sausage Scandal 2008
Silicon Valley and the credit crunch
Insurers crumble as financial structures fail
Fannie Brown and Freddie Darling

We at Syntagma always knew that Sarah Palin was a force of nature. Now it’s clear she’s won the alien vote too.

This hockey mom sure grows on you.

Via The Inquisitr