To predict government policy, listen to Boris and wait for the opposite

At every stage in the coronavirus pandemic, the prime minister has been hopelessly behind the curve writes John Crace in The Guardian 

‘During the biggest national health crisis in 100 years, it’s just our luck to have Boris Johnson in charge.’ Photograph: Andrew Parsons/No10 Downing Street 



In hindsight, the clues were there for everyone to see. Last week, the government forced a vote on extending recess by an extra week until 11 January. After all, it wasn’t as if there was a lot on for MPs to scrutinise. Brexit was bound to be going swimmingly and the coronavirus was near enough completely under control. So sure enough, on the very first day of its prolonged holiday, Boris Johnson announced that parliament would be recalled on Wednesday.

It’s now becoming easier and easier to predict government policy. Just listen to what the prime minister said in the morning and the opposite is likely to be true come the middle of the afternoon. It’s almost like clockwork – the government does what most reasonable people would have done several weeks earlier.

At every stage in the coronavirus pandemic, the government has been hopelessly behind the curve. From being late to lockdown in March while the Cheltenham festival and Carrie Symonds’s baby shower went ahead. From ignoring the Sage advice in September for a second national lockdown and being forced into one in November by both Keir Starmer and the rapidly rising rates of infection. From announcing a five-day Christmas free-for-all in early December – everyone knew Covid liked to take time off over the holiday period – which he then had to cancel after everyone had already made their plans.

During the biggest national health crisis in 100 years, it’s just our luck to have Johnson in charge. A man pathologically unable to make the right calls at the right time. The prime minister is a narcissistic charlatan. The Great Dick Faker. Someone who can’t bear to be the bearer of bad news or to be proved wrong by people who disagree with him. So he stubbornly ignores the evidence until he becomes overwhelmed by it and public opinion has turned against him. He isn’t just a liability as a leader, his indecision has cost lives. His hubris will only cost him his job.

So the day started off much like any other day for Boris. A quick feelgood photo opportunity jaunt to watch someone get the Oxford/AstraZeneca vaccine on its first day of national distribution and a short clip to camera. Schools should definitely remain open, he insisted, apparently oblivious to the fact that most health and teaching professionals had said otherwise.

But Boris thought differently. Most schoolkids only got a mild dose of Covid and the teachers should stop moaning. Despite the increased infectivity of the new coronavirus variant, teachers should take one for the team as children couldn’t afford to fall further behind in their education. It didn’t seem to have occurred to him that children also have parents and grandparents with whom they live and who might not be so lucky.

There might be a time for increasing restrictions – Nicola Sturgeon announced Scotland’s early in the afternoon and the Labour leader had made a second appeal in two days for Johnson to see sense – but now was not the right time. Which begged the question: “If not now, then when?”

With infections increasing exponentially, the death rate rising and hospitals struggling to cope with the rate of admissions, just how many more people would have to get seriously ill before Boris could be bothered to take action?

As it happened, not many. Because shortly after filming this interview and insisting there would be no No 10 press conference that evening, Johnson announced he would be addressing the nation on TV at 8pm. Yet again, Boris had been shamed into another U-turn. Better late than never. Though too late for some.

For his TV address, a dishevelled Boris – why change the habit of a lifetime and make it look like you give a toss? – didn’t look serious so much as scared shitless. Someone for whom reality had – temporarily at least – penetrated his self-delusion. There was little way to sugarcoat the news, despite him talking up the vaccine. No triumphs to be declared, no ersatz leadership theatrics for reassurance. Only the despair of a down-on-his-luck TV evangelist was on offer in the eight-minute statement.

He began as if the huge rise in coronavirus cases had come as a massive shock to him at lunchtime, even though it was old news to the rest of the country, and spoke of his deep regret – the hurt was all his – at putting the country back into a total lockdown. Including closing the schools he had opened that morning.

“Some of you might be wondering why we haven’t done this before,” he said. A question literally no one was asking as no one expects anything but incompetence and delay from this government any more. Typically, there was nothing about financial support for those whose livelihoods may be affected. He ended by saying that if all went well, there could be an easing of the lockdown by mid-February.

But not even The Great Dick Faker, the master of self-deception, sounded convinced by this. As usual he didn’t have the balls to level with the country and tell us what we all deep down know. That it’s going to take at least three months before there’s even a hint of a return to normality. And that’s if we’re lucky.

“So we beat on, boats against the current, borne back ceaselessly into the past.”

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General Electric’s accounting tactics bared in SEC settlement

 Industrial powerhouse underlines risk of short-term, market-orientated approach to management writes Sujeet Indap in The FT 

In 2015, Larry Fink, the BlackRock founder and chief executive, released a public letter pressing fellow CEOs to eschew making business decisions based on short-term considerations. 

“It is critical, however, to understand that corporate leaders’ duty of care and loyalty is not to every investor or trader who owns their company’s shares at any moment in time but to the company and its long-term owners,” he wrote. 

One company that BlackRock was a major shareholder at the time was General Electric with a stake of nearly 6 per cent. Around then, Jeffrey Immelt, the chief executive of GE, appears to have been overseeing just the kind of instant market gratification management effort that Mr Fink was condemning. 

The industrial group “misled investors” and “violated antifraud, reporting [and] disclosure controls”, according to a recent US Securities and Exchange Commission order. In early December, GE agreed with the regulator to pay $200m to settle charges that it had misled investors about its financial condition in between 2015 and 2017.  

In statement, the company noted that no financial statements required correction and that it had neither admitted nor denied guilt as a part of the SEC settlement. 

Five years after Mr Fink’s letter, there has been a continued rise in “stakeholder capitalism” and investing for better environmental, social and corporate governance standards. But this coda to the GE saga of the 2010s is an ugly reminder of the world these new principles are attempting to replace. 

The SEC’s order alleged GE pulled forward future profits and cash flow and, separately, delayed reporting big losses in order to boost immediate results. Damningly, the SEC described how Wall Street pressure and undue attention to the company’s stock price appeared to drive the company’s actions. 

In 2015, GE announced that its once high-flying but controversial GE Capital unit would shrink by $200bn worth of assets. While highly profitable at times, the banklike entity was volatile and its heavy losses during the 2008 financial crisis had nearly sunk the entire company.  

Mr Immelt wanted to reposition GE as an industrial powerhouse with aviation, healthcare, energy and oil and gas units that were supposed to help the developing world become urbanised. In late 2015, the group would close its $15bn acquisition of France’s Alstom to boost its power plant business. 

The power division, according to the SEC, would become the home of accounting mischief. Maintenance contracts with customers that ran several years required estimates of costs and the reduction of such inputs allowed GE to boost its book profits. Separate alleged manoeuvres included selling receivables to GE Capital, allowing for commensurate gains in cash flow. 

The company had announced in 2015 that it would seek to hit $2 per share of earnings in 2018. It appears that precise and ambitious figure effectively became the central organising principle of the company. 

“GE was aware of investor and analyst concerns that its cash collections were not keeping pace with revenue and that its unbilled revenue was growing in its industrial business,” wrote the SEC. 

It said executives at GE Power and GE Power Services cited analyst reports when they discussed internally the need to show improved cash performance. In one 2016 presentation to GE senior management, the SEC said, one executive posited that GE’s stock price could reach $40 if operating cash flow performance improved. It averaged about $30 during that year.

At the same time, the pieces of GE Capital the parent company had retained would prove to be another time bomb. GE kept an interest in long-term healthcare insurance policies that had been sold decades earlier. Those policies proved to be more expensive than had been anticipated, a reality that became clear in 2015. 

In 2016, as it became evident that higher losses were going to need to be realised, one executive called the situation in the insurance business a “train wreck”. 

It seems GE only came clean with investors about its accounting practices in the power division in 2017 while also eventually taking a $22bn impairment to goodwill related to the Alstom buyout. 

And it finally took a $9.5bn charge related to insurance liabilities in 2018 and committed to plug another $15bn of capital into shoring up the GE financial services unit. 

A spokesperson for Mr Immelt said GE sought to comply with all standards for financial accounting. “To achieve this goal, it put in place strong processes with multiple checks and balances,” the spokesperson added. 

BlackRock continues to hold a stake of about 6 per cent in GE shares, which currently hover around $10. A recovery to the peak of nearly $33 seen in 2016 will undoubtedly require a very long-term orientation.

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The backlash against colonialism holds lessons in guilt and gratitude

 Descendants of conquerors and the conquered must move towards a universal account of history writes Mihir Bose in The FT 

In the tsunami of words on the poisonous legacy of slavery and empire generated by the death of George Floyd, an African-American who was killed in Minneapolis in May by a white police officer, two stand out: “gratitude” and “guilt”. 

Should descendants of those who built empires on the back of exploitation feel guilty for what their ancestors did? Or should the descendants of the colonised feel gratitude that their ancestors were conquered? 

My wife is a descendant of the conquerors, having been born into the British Cecil family which has produced prime ministers and great political leaders. I am one of “midnight’s children”, born a few months before India won its freedom from British colonial rule in 1947. While I joke that she is a child of the conquerors and I of the conquered, I do not expect my wife to feel guilty for what her ancestors did. But I do reject the idea that I should be thankful that my ancestors were conquered. 

That the conquered should feel gratitude was a view often expressed during the days of the British empire. It was not uncommon for the British to say that the Indians needed to be “civilised”. As Winston Churchill, who was then out of government and campaigning against self-rule for India, put it very bluntly in a speech in 1931, the vast majority of Indians “are primitive people”. 

Today, some historians imply I should be grateful for colonial legacies. Niall Ferguson, in his book Empire: How Britain Made the Modern World makes the argument that the empire “enhanced global welfare — in other words was a good thing”. He adds that it brought free markets and the rule of law. Other individuals are still as blunt as Churchill. 

While I do not think my ancestors needed to be civilised by Europeans, they had many faults. My family are high-caste Hindus and there is no denying the abominable way these upper echelons of society treated the so-called untouchable castes, now known as Dalits. My abiding childhood memory is of my mother giving the sweeper woman tea and sweets, thinking she was being generous, while telling us that nobody should ever use her cup and plate. 

Years ago, I visited Bangladesh, where my family is from. While very hospitable, the Muslims there made it clear they had not forgotten the dreadful way my rich Hindu ancestors had treated theirs. I know I need to acknowledge such historical truths, but I do not see why I should feel personally guilty. 

The same applies to my wife. For example, on a family trip (including nephews and nieces) to the National Portrait Gallery before the Covid-19 pandemic, we stopped before a portrait of Arthur Balfour, nephew of three-times prime minister Lord Salisbury and himself a prime minister. The potted history mentioned that, as foreign secretary, he was the author of the 1917 Balfour Declaration in support of “the establishment in Palestine of a national home for the Jewish people”. 

I pointed out that, a few months before, he had warned the British cabinet in a memo, that Indians would not be able to manage parliamentary democracy because they were not of the same race as Europeans. Even education would not bridge the racial divide. Balfour and his fellow cabinet ministers, presided over by Lloyd George, did not dispute Lord Curzon’s estimate that it would take Indians 500 years to learn to rule themselves. I said this not to make my wife’s family feel guilty, but to highlight that the history we have been taught is far from the complete picture. 

This is what we need to tackle: call it the “Machiavelli problem”. More than 1,500 years before the Renaissance diplomat and philosopher wrote his book on statecraft, The Prince, an Indian called Chanakya wrote a treatise on the same subject called Arthashastra, as a handbook for a great king. 

Niccolò Machiavelli may or may not have known about its existence but it cannot be disputed that, while Machiavelli was merely a theoretician, Chanakya helped build one of India’s greatest empires. Indian schoolboys know of both men and the diplomatic enclave in New Delhi is called Chanakyapuri. Yet Chanakya is often described as the Indian Machiavelli and he is hardly known outside India. 

The result of imbalances like these is that descendants of the conquered, like me, always carry two bags: one containing the conqueror’s history, the other that of the conquered. Descendants of the conquerors, like my wife, only have to worry about the first bag. 

Unless we can equalise these historical weights and start to move towards a truly universal history, the past will continue to divide us and we shall always be wrestling with the problems of guilt and gratitude.

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