Oh, and let’s not forget Leetle Teetch Sarkozy, pictured in the same article warmly welcoming Gadaffi to the G20 summit. Absolutely no truth whatsoever in the crazy rumours put about by the desperate sex-crazed dictator (Gaddafi, not Sarkozy) that someone put funny money into the 2007 French election campaign.

Here's Gaddafi with his mate Berlosconi and one of his 40 virgin female bodyguards - 39 if Silvio had anything to do with it

Gaddafi may have had a head start in the race for the hotly-contested title of most bonkers, loathsome and sociopathic oil-glutted dictator in the Middle East, but he was arguably given a leg up when Ronald Reagan bombed his tent in 1987 and killed his wife, kids and relatives in a vintage example of liberal intervention. Since that time, he took every opportunity to piss off ‘The West’, supporting terrorists of all stripes and persuasions, the nuttier the better. Funny he would react like that.

The rank hypocrisy of his ‘rehabilitation’ has already been discussed in my 2009 article (Oil, money, BP, fear that it might come out in the wash that Libya was at best a bit part player at best in the Lockerbie outrage plus the fact that he was a psychopathic loony). Since he was canonised by Tony Blair Gaddafi may have stopped supporting terrorist groups targeting western interests but he murderously arsed around in Africa with impunity. Moreover, the current Tsunami of cant surrounding the reasons for bombing democracy from 35,000 feet into Libya stands violently at odds with the blind eye shown to last week’s incursion by Saudi soldiers into Bahrain, killing rebels (not freedom fighters?) opposed to the weak-chinned Sheikh presiding over western interests in that boozy  Gulf bastion of R+R and general jiggery-pokery. Complicated? Not really. File under SNAFU (Situation Normal. All Fucked Up).

John J Kelly.

Mandy is worried about wonky cross dressing.

Yesterday, unlike ‘Lord’ Mandelson, I saw George Osborne deliver his case for the Tories as the party of ‘Progressive Politics” at centre-left Demos think tank HQ. The hounhymns were confounded. Phil Collins – no, not the former drummer of progressive rock group Genesis but the former speechwriter for failed prog rock singer, Tony (Ugly Rumours) Blair – introduced Osborne’s speech as the latest attempt at Tory ‘wordgrab.’ He concluded by thanking Boy George and telling him that he’d be pleased to relay his advice on policy to the Labour war room. Later, on national TV news, a rattled ‘Lord’ Mandelson, snidely referring to Osborne as his ‘old friend,’ accused him of ‘political cross dressing’ and called the whole schtick a ‘sick joke.’ Today, the ever-loyal Guardian published Mandelson’s ‘withering’ response as its lead story, but not the Osborne speech, together with a shrill, biased commentary from a Guardianista (middle) class warrior called Allegra Stratton. Outside wonkworld, nobody cares much about who ‘owns’ the right to be called ‘progressive,’ so why was Mandy so outraged? Surely political stereotype identity theft can’t bother an unelected peer, returning to run the country after a subsidised holiday as a guest of the Rothschilds  - don’t worry, citizens, the Business Secretary didn’t talk business, he and his fellow guests apparently sat around talking about the ‘celebrities they knew.’ Besides, we all know that his week-long stay on the Russian oligarch’s yacht last year had absolutely nothing to do with Deripaska’s purchase, then dumping, of LDV Vans. He’s bigger than that, as his contempt for democratic process clearly demonstrates.

Mandelson would never resort to cross dressing for political or any other purpose. After all, he's Gordon's willy.

No, Mandy was pissed off because Boy George has had the temerity to come back from the dead. As the architect, with Blair, of the highly effective vote winning strategy of stealing the middle class centre from the Tories with pinkwashed versions of Thatcherite ideology, he has every reason to fear its use as a weapon of mass destruction against his own beleaguered, corrupt and morally bankrupt regime. It was doubly galling that the latest body blow was delivered by the whippersnapper to whom he gave a lesson in realpolitik in the Deripaska ‘Yachtgate’ incident (Thus passim) almost exactly a year ago. Many observers, including myself, saw Osborne as the weakest link in the Cameron front line. Yesterday he gave a credible account of himself and pulled off a tricky piece of wonky jiggerypokery with aplomb. Besides, the Tories are the stupid party. This was all too . . . .freaky, man . . . .

Demos, home of much of the New Labour “Third Way” malarky, deserves much of the credit for the New Tory legerdemain. Under its latest director, liberal Blairite Richard Reeves, it  launched the Progressive Conservatism Project in January this year. Osborne’s ‘Third Way’ proposes a ‘progressive’ review of the role of government in the funding and delivery of education, healthcare and other costly social services. He argued that the choice facing the next UK government, faced with public sector spending of between 56-60% of GDP and rising, lies with cutting services and/or dramatically improving efficiencies. Labour claim they will not cut public spending, and neither will they reform their statist intervention in just about everything. The Tory solution involves identifying large savings by further privatisations, this time of the education sector, and proposing that alternative private sector or  ’third sector’ social entrepreneurs will thus be able to maintain or improve existing standards, which have fallen under Labour despite huge financial outlay, at lower cost.

A third way love-in before Tony became a neocon hag and Bill discovered girls and cigars.

Osborne cited Bill Clinton, Jean Crétien and Paul Martin (Canadian Liberals) and Göran Persson (Sweden) as examples of left-leaning centrists whose reforms transformed public finance deficits, whilst (allegedly) improving the state provision of public services. He correctly pointed to the fact that Labour has tried (with mixed success) to introduce a mixed economy in the provision of state education through its Academy schools (favoured by Tory shadow education secretary, Michael Gove, also present yesterday). The New Tory wonks thus turned the tables on (Old) New Labour: if they criticise the part-privatisation/academy opt out choice in education, they stymie some of their own policy. Likewise if they object to private finance initiatives. Moreover, Clinton, Martin and the saintly Swedes were and are poster boys of liberal centrist Blairites. Were it not for Mandy’s pantomime hissiness, conspiracy theorists might conclude that the New Tories were natural inheritors of the Blair project and that they were in this thing together.

While it is hardly progressive for the Tories to advocate prising away the dead hand of the state and to advocate more privatisation, by Tory standards, it is progressive to do so under the banner of an ideological duty of care to society and preservation of the welfare state (in contrast to Thatcher’s ‘there is no such thing as society’). Osborne is right about one thing: under Labour, state spending has recklessly ballooned out of control. We hear nothing about Gordon Brown’s celebrated ‘golden mean,’ whereby balanced expenditure would deliver prosperity allied to economic progress. But it would be truly progressive to question whether privatisation has indeed delivered real benefits to the population at large, as opposed to getting large items of capital expenditure off the treasury balance sheets. Thatcher and Reagan, whom Osborne cited as true progressives at the end of his speech, left legacies of huge budget deficits and social carnage in the form of institutionalised unemployment. Whoever inherits the record deficit left by Brown and his crossdressing puppetmaster will not only inherit a mountain of unemployment, but will also exacerbate the problem by taking a scythe to the bloated public sector. During Persson’s reforms Swedish unemployment soared to 16%, for example.

All of which leaves Demos wonks with plenty of work to do over the next few months. Make sure they aren’t passing your ideas over the fence, though, boy George.

John J Kelly

Tony says Gordon must go and I agree, says fat Charlie

Last Sunday BBC political commentator Andrew Marr asked Gordon Brown whether he would consider stepping down as PM if it were the majority view of the Labour Party that it would be in its interests for him to do so. Characteristically, Brown replied “No.” He had a job to do, cleaning up Parliament and saving the economy. Today, his options are somewhat more limited. Twice-disgraced and tainted by the expenses scandal, ‘Lord’ Mandelson is Deputy Prime Minister in all but title. His job is to save what’s left of the Blair Reich. Olympics Minister (yes, that’s her job), the stupid but thick-skinned and loyal Blairite Tessa Jowell has rejoined the cabinet, in another move designed to show that there is no room for corruption in the Brown government.

In a last throw of the dice, Vinny Jones might gain a peerage and join the Cabinet

Tessa was an enthusiastic proponent of the murky and barmy Blair supercasino scheme. Her ‘estranged’ husband, David Mills, may serve 4.5 years in an Italian gaol (see comment below) for abetting Blair’s friend, Italian PM Silvio Berlusconi, in corruptly abstracting and offshoring Fininvest assets. She apparently didn’t notice that he paid off their £340,000 mortgage with a bribe, claiming she was too busy to notice. Mr Mills, a friend of Formula One supremo, Bernie Ecclestone, also allegedly facilitated the notorious £1 million loan to New Labour early in the Blair First Reich, which saw tobacco advertising on racing cars exempted from the ban on sports promotion. Who will be next to rejoin this cabinet of fools and fouls – Vinny Jones, perhaps?

This morning it was ‘revealed’ in the Murdoch press that Peter Mandelson had exchanged emails questioning Brown’s leadership credentials with none other than ‘psycho’ Derek Draper (Thus passim). Ahead of grisly European Parliament election results, Charlie Falconer, Blair’s ex-flatmate, lawyer, ex-Lord Chancellor and New Labour Illuminatus, pronounced that it might be in the best interests of the party for Gordon to vacate 10 Downing St. Tessa Jowell followed through with the observation that Gordon loved the party so much that he would always step down rather than damage its prospects. Characteristically, Brown nixed this twitter with a defiant speech to activists repeating that he he had no intention of stepping down. So there you have it. Open war. Brown’s staunch allies (Mr and Mrs Balls, Fagin McDarling and the cleaning lady) are menaced by Blair’s Orcs, who have risen from the dead and are now pissing out from inside the big tent.

Brown will step down. It is even conceivable that Mandelson will try to take the reins ‘on a temporary basis’ while a leadership squabble takes place (Thus passim). Never mind the polls, the bookies are offering a measly 6/5 on Brown leaving office. A general election is inevitable, which Thus predicts the Tories will win with a majority of between 240 and 280 seats. Labour will possibly fall to third place behind the Lib Dems. Having lost control of all the UK county councils – while Tory Boris Johnson rules the GLC –  a blue Reich will descend, too comprehensive by half for democracy or even for sound decision-taking by the Tories – look what happened after the Labour landslide.

That’s all she wrote, except to repeat that in order to avoid the Blair/Brown problem, Cameron needs to ditch George Osborne if he expects to have any chance of tackling the inherited economic nightmare. Ken Clarke would make a good war Chancellor. That much said, today’s ‘email evidence’ confirms that hapless toff Osborne told the truth when he claimed that Mandelson, then an EU Commissioner, had ‘poured poison into his ear’ about Gordon Brown aboard Deripaska’s yacht last year, where he and Mandy were guests at James Murdoch’s birthday bash. The Murdoch press chose to spin against Osborne on that occasion. Today they put the boot into Brown. Time to write the memoirs, Gordon. Make them brief. Nobody will read them.

John J Kelly

There is little I can add to the well-published facts surrounding the odious activities of the head of Downing St. Strategy and Planning Unit, Damian McBride, except to state the facts. He was one of Gordon Brown’s most senior and long-standing aides, a fellow Scot, known in media circles as ‘McPoison,‘ partly for his habit of sending vicious and intimidatory texts to journalists who failed to toe the party line. He was paid a ‘six figure’ salary by the UK taxpayer to smear detractors at the government’s behest. His resignation statement borders on the psychotic, opening with an attack on Tory blogger Paul Staines, (Guido Fawkes) for revealing the plot to disseminate vicious slurs on the Shadow Prime Minister and Chancellor, implying that Staines should have kept quiet about libellous emails intended to illegally and maliciously distort public opinion of HM Official opposition. He then claims that the idea originated with co-conspirator Derek Draper, as a counter to unspecified anti-Labour slurs. The emails suggested using libelous and unfounded accusations that the Shadow Prime Minister had a sexually transmitted disease (he and his wife recently lost a child) and sexual allegations against the Shadow Chancellor, amongst others. The Prime Minister, usually quick to claim the moral high ground, has not come forward with a statement of condemnation. Alan Johnson, Health Secretary, while admitting that the allegations were ‘disgusting,’ attempted to make light of the issue on BBC Radio 4 this morning, denying any responsibility on the part of McBride’s employer. (In passing, it has been alleged elsewhere that Karl Milner, another former Brown aide, former political lobbyist and implicated with Draper in the 1998 ‘Lobbygate’ scandal – see below – may have handled donations for Johnson’s Deputy Leadership campaign).

McBride puts his fellow conspirator firmly in the frame. “When Derek Draper originally suggested using a website to compete with the kind of material seen regularly on the Guido Fawkes blog, he asked me in a personal capacity to write up some of the stories doing the rounds in Westminster. Derek and I decided in the end that this website was the wrong thing to do, and that Derek should not take his online efforts down to the level of Guido Fawkes and his Tory backers.” (McBride resignation statement). Draper, a former aide to twice-banished ‘Lord’ Peter Mandelson, was himself disgraced in the 1998 ‘Lobbygate’ scandal, where he claimed that he could facilitate access to New Labour insiders and cabinet figures for a fee. He suffered a breakdown, went to California via The Priory, gained an MA in Clinical Psychology (though not at Berkeley as he implied on his CV) and re-invented himself as a BACP accredited psychotherapist. This latest backsliding suggests that he may be in need of some serious supervision.

Recently Draper re-entered the world of politics with his LabourList website. His own ‘apologies and regrets‘ blog on this website today shows little in the way of apology and insufficient ‘regret’. In proposing that we ‘draw a line’ under this ‘silly’ episode, while repeating Green’s ‘excuse’ that the emails should never have seen the light of day, he omits to mention that his putative vehicle for smear, “RedRag” is still a registered domain (listed under an accommodation address). While he and Green have accused unnamed Tory grandees of supporting Guido Fawkes, he has repeatedly claimed that LabourList is completely independent of New Labour. Yet its content unambiguously supports the party line and boasts of inside track information. As for smears, recent examples of its top-level agenda-setting stories in the national interest include a story about Tory Transport spokesman John Leech MP forgetting to renew his car tax. Draper has repeatedly sidestepped questions as to who supports/endorses and/or contributes to LabourList, and whether they are part of the incumbent government and its fellow travellers.

The third recipient of sordid emails, Charlie Whelan, was a sweary former spin doctor (aide to Gordon Brown, no less) under the Blair-led Government, who ‘stepped down’ after the 1999 Mandelson home loan scandal, and is now Press Officer of the Unite trade union. All three have strong links to Labour/Brown and/or Mandelson. One was on the government payroll in a senior official advisory capacity. It beggars belief that the country should ‘draw a line’ under this conspiracy to sink British politics to the gutter levels which did so much damage to democracy in the US. Brown needs to issue a statement of unqualified condemnation and apology to the Conservatives and to the country. Anything less is an admission of complicity, and failure to do so should be seen in its own context. In passing, it is obviously and wholly coincidental that the recent resurgence of slimeball spin doctoring and dark arts, which Brown vowed to end when he became Prime Minister, appears to have coincided with the reappearance in High Office of the spotless Peter Mandelson, who allegedly ‘poured poison’ about Gordon Brown into the ear of George Osborne on the boat of a Russian Oligarch (Yachtgate) in an incident which led to Osborne’s political discomfiture, three months before Mandelson returned to government. So successful was his black propaganda that nobody asked what the EU Trade Commissioner was doing on Oleg Deripaska‘s yacht, where he allegedly stayed for a week.

John J Kelly

By John J. Kelly

In a move unprecedented in Europe since Martin Luther said the Pope wasn’t a Catholic, German Finance Minister Peter Steinbrueck called Gordon Brown’s “crass Keynesianism” breathtaking – but not in a good way. Following the rude absence of Mrs Merkel, the German Chancellor who couldn’t be bothered to turn up to Gordon’s Coalition of the Borrowers last Monday (Thus passim) another Hun, this time Steffen Kampeter, wee-weed on the recovery plans by stating that Brown’s audacious Micawber Plan (Thus Passim) showed a “failure of Labour Policy.” Sarkozy, meanwhile, dapper Neo-Liberal French footie friend of Gordon, is erring on the side of financial incaution. The issues are well summarised here in a Bloomberg Special Report.

I hold in my hand a message from the German Chancellor

Conservative Shadow Chancellor George Osborne – who nobody cares about anyway after his boating misadventures – piped up that “there is a growing international consensus that Brown’s borrowing binge will make the recession worse, the recovery more difficult and burden future generations with a mountain of debt.” Labour Foreign Secretary David Miliband – who nobody cared about after he failed to unseat Brown and was pictured with a banana last October but is now rehabilitated as Mandelson’s hopfrog – said on the BBC Today Programme that it was all a German internal spat (unrelated to Eton footwear). Mrs Merkel was behind Brown’s Micawber Plan to urge Europe to splurge a quarter trillion Euros on tax cuts and public spending, funded, presumably, from the Planet Zanussi. He didn’t say just how far behind it she was, though.

Exactly what part of Schadenfreude don't you understand, Herr Bleistift Schwanz?

Mrs Merkel announced earlier that no big decisions would be taken about the level of state intervention in the German banking crisis until January, estimated subvention at around Eur 32 billion over two years and ruled out tax cuts. The world money markets, clearly in awe of Brown even if the Valkyrie was resisting his charm, signalled their ringing endorsement. Sterling plunged to a record low against the Euro, which was hailed as a triumph by the madly spinning Miliband who declared that a weak pound would help exports. True, if the UK had anything left to export apart from bankrupt Woolworths Pick ‘n Mix boiled sweets and old MFI furniture (THUS passim). It will be very bad for UK imports of just about everything else, but crucially of energy, denominated in dollars, which the UK, like everyone else, sort of needs in order to keep the lights on and the printing presses rolling at the Royal Mint.

It's Mr Micawber again, vying for EU Finance Minister's post

European insiders recall that during his time as UK Chancellor, Brown’s modus operandi was to turn up at EU Finance Meetings, read a prepared speech then take off his headphones and ignore the debate as he got on with his homework. He’d put on the phones for the closing speech and exit, assuming consensus around the UK position. This endearing trait has not been forgotten. Brown, meanwhile, reiterated this week that he had no intention of considering Britain’s entry into the European currency, a peculiar message from the self-appointed leader of Europe’s latter day Marshall Plan. As a worrying postscript, BBC Economics Editor Robert Peston reported that HBOS, which the UK government bailed out in September, has incurred an extra £3 billion in losses against unsecured loans in the past three months. Santander, Spanish owner of Bradford and Bingley and Abbey, two more UK financial sector strugglers, also announced huge job cuts in the UK as of January.

Meanwhile the UK credit card companies, who are gleefully charging an average of 14.9% interest on purchases and 23.9% on cash advances, and who are mainly owned by the banks, ruled out passing on Bank of England interest rate cuts to their customers, though they did say they would give distressed borrowers 100 yards head start before sending the attack dogs after them. Stick to your guns, Missus Merkel. Alles is far from Klaar. We really don’t want another Weimar. Look what happened last time.

We agreed that Brown would lose the next election whenever he called it, unless the economy miraculously turned round in the next month. The chances are that it won’t do anything like that before 2010, and will almost certainly get worse as the Polonium cocktail of tax cuts, increased borrowing and increased public spending takes hold. Brown might narrowly win a snap election, but he is not a gambler and will have to be pushed off the diving board into the deep end. We agreed that Cameron had finally done the right thing in abandoning a fudgy Middle Way in favour of a straightforward alternative: no tax cuts and a curb on public spending in order to balance the books. It gives the public a straight choice.

The room, by a tiny margin, didn’t agree. They thought that Gordon would call an early election and would probably win on the basis that public perception still held him to have been a sound Chancellor, if not an inspiring leader. Cameron was an untried entity. I disagreed that Brown’s audacious economic strategy was a ‘new paradigm’ but agreed that lowering taxes while increasing public spending and expecting the bond markets to back Britain in a global credit crunch was unusually fruity for a son o’ the Manse.

To survive, Brown needs to convince a battered and cash-strapped electorate that he was responsible for the ‘good’ times but that ‘global economic conditions’ were to blame for the mess that the UK economy finds itself in. He might also tell us why he was obliged to sell our gold reserves and tax pension funds into the Stone Age during these halcyon days. He will also need to explain why and how we intend to pursue and persist with a costly and impossible policy of ‘liberal intervention’ in Afghanistan and Iraq and how we expect to pay for the crazy Private Finance Initiatives and Public Private Partnerships, which will haunt public finances for decades. I’m not a Tory, but I can’t vote Labour under the present lunatic circumstances. We’ve given this gang too many chances. They have widened the wealth gap and given us the highest levels of national debt for 50 years.

Don't sup with Russian sailors, George.

Whether or not I like it, the next election is for the Tories to lose. Labour can’t and shouldn’t win on their record. The Tories may need to redeploy their accident-prone Shadow Chancellor and keep his replacement away from Matthew Freud, oligarchs and yachts. Ken Clarke’s too old. William Hague would be a sound choice: he knows about making money and has a regional accent, even if it’s a bit spooky and, like me, he’s a slaphead.

Postscript: I’m not a Tory – tell me I’m not a Tory – but on the Andrew Marr TV show at 9 am yesterday Cameron said more or less the same thing as my Friday blog about ‘fiscal stimulus’. He said nothing about Europe, though.