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get
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welcome to Sputnik orbiting the world
with me George Galloway and me gatri is
the pound down or up and what does that
mean are the markets crashing and
burning or booming and why should you
care first brexit now Trump have
injected massive volatility into the
British economy the ccope has been
shaken and the pieces are still in flux
our guest in this special edition on the
economy is a special guest indeed City
editor Supreme the dwen of City editors
from the times to the evening standard
he has occupied all the commanding
Heights of financial journalism in
Britain I've known him for almost 30
years and never not been impressed he is
Anthony Hilton and he's here now on
board the Sputnik Anthony welcome the
massive volatility that gatri talked
about
is it something that we should fear or
is it a normal up and down of of the
capitalist
system I I think a bit of both to be
quite honest I think that the volatility
is partly because of our kind of
tectonic Shi uh plate shifting you know
that the uh the whole uh
globalization uh process is if not
unwinding certainly stalled and I think
that's being reflected in the markets
and then the other side is that you know
there's just so much hot money in the
world now so much money that can be
mobilized at the Press of a button in a
way that it could never be before that
you're bound to get that much more
volatility well let's look at the pound
for a start we were told in the
immediate wake of the brexit vote that
the pound had never been lower it was on
the floor might be headed for under the
floor after the Trump result we were
told that the pound had had its best
week for I don't know how many decades
what does that actually mean why should
I mean we have very few pounds we have
no shares nor even own property why
should we and people like us and bear in
mind 16 million people in Britain have
less than1 in the bank and many millions
more have no bank account at all why
should Ordinary People care about these
fluctuations well in the case of the
pound um they care because it will
fairly quickly affect how much they pay
for whatever they buy in the shops I
mean a country like this which Imports
half to 2third of its food pays for it
in Sterling if the pound shops you have
to pay more so that transmits through
into the shops in time and you will see
uh a bit of inflation you'll see Rising
you have a Marmite crisis well Marmite
is an early indication yeah if you like
it's now in the coal mine of what there
could be that much more to come or a bit
of profiteering uh the Apple uh uh S
charge on British consumers has been
widely criticized as uh as sharp
practice Yeah well you always get this
don't you that when there is a kind of
excuse for putting up prices then there
will always be a few companies who do
just a little bit more than perhaps they
need to just to catch up or as you say
to uh make a bit more money of course uh
a potential concomitant of all of this
is import substitution after all if we
import half 2/3 of our food we don't
have to do we uh we can make perfectly
well our own um cheese our own butter
and many of the things that we buy
cheaply uh from foreign sources at the
moment uh probably with food we could
not be self-sufficient unless we all
wanted to live on potatoes or or or or
grain but you I mean the point you make
is a valid one but of course that's the
point in a way that Trump is making in
the United States about trying to take
manufacturing back to the States it's
the same idea that why buy it from
abroad if you can make it at home and
the issue is that perhaps they can make
it abroad more efficiently and we would
be better off doing what we do well here
and selling it to them and buying from
them what they can do cheaper than us so
that that's the argument for trade yeah
but another concomitant is exports uh
gri has a small vintage clothes shop in
the Portell Market uh area I can tell
you that there's a a fantastic number of
foreign visitors in the PTO belloo area
uh right now I mean a phenomenal amount
really noticeable even for me just
standing guard in the in the shop so
tourism is one invisible export and all
the other things that we actually export
are now cheaper yep in theory anyway
yeah I mean to some extent what we
export has parts that we have to import
first so it's not exactly as clearcut
but the interesting thing is that when
the pound dropped after the financial
crisis back in 2008 and the pound then
dropped about 25% but there was no
increase in exports um on new material
increase in exports so you do Wonder to
what extent price is the determining
factor with exports and whether you know
it's quality or after sales service or
basically are we actually producing what
the world wants to buy now um this is
great of great importance to us and I
read recently that um due to the surplus
of luxury apartments in New York the
rents are actually going down and
tenants are harder to find now um we're
waiting for that day to come to happen
here in London well it's beginning to
well I wouldn't say it's happening to
that extent yet but I mean the top
depend of the property Market in London
has stalled really quite badly since to
is still too far for most of the people
I mean oh yeah yeah quite but then
that's true of New York too I mean I I I
have lots of friends in New York and
none of them live on Park Avenue you
know I mean um let's face it most people
can't afford 40 million or whatever or
even 1 million for a house um or even
much less than that London is now less
attractive to foreign buyers for if you
like political reasons or geopolitical
uncertainty but of course it's more
attractive in terms of they've had a had
a drop in price because of the the
Fallen Sterling so if you're sitting in
I know in Singapore or or in Russia um
that house in a smart part of London is
going to cost you 15 20% less than it
would have done earlier this year but
interly enough they're not coming which
is I think the the Intriguing point now
you know the city inside out we were
treated in the runup to the uh EU
referendum to all kinds of fear stories
that the city of London would basically
have a plug pulled and and go down the
drain we've got big institutions warning
that they might relocate out of London
how serious a threat is that and if it
were to occur wouldn't that trigger some
kind of re-calibration of the British
economy away from Finance capitalism
back to what we once were as as an
industrial and Manufacturing country um
yeah I think there's truth in both of
those things I mean I I would certainly
say that the city is too big for uh the
UK economy uh so it is unbalanced and
there's a lot of work being done that
says in fact the city could be onethird
of the size and still deliver everything
that the UK economy needs and you know
so much it's it's bigger than it should
be because it makes so much money you
know and it's not lending money to the
real economy it's it's it's sort of
lending money as an end in itself to
make money for itself so it could be
shrunk and that would not be disastrous
for the British economy in terms of
whether they're all going to up sticks
and move to Frankfurt or Luxembourg or
um Dublin it's a bit too early to say it
does well the two things one it depends
on the nature of any deal that comes
into place if we ever do leave the EU um
and secondly is whether or not you can
fudge it you know that that if you if
you put a few people saying into
Luxembourg and call one of them a
managing director does that mean in fact
that the business is located in
Luxembourg and can actually carry on
here so I think that the
um whether there'll be a mass migration
is still very much up in the air well
that'll partly depend on what kind of
brexit won't it um and that's what I'd
like to turn to now uh there's a poll
today saying the majority of British
people want to stay in the single Market
but control immigration as we know these
two things are at least at the moment uh
incompatible you cannot have one uh with
the other uh what's your best guess on
what the British government's
negotiation will produce on
this um well as you say the the sters
they want the cake and eat it
um
I
at the moment I think they're obviously
not going to get free movement of Labor
uh or or uh be able to restrict that if
only because you know it if you look at
the eastern part of the EU Poland
Romania I mean those countries free
movement is very integral to them um and
uh they are not going to agree to a deal
where that that gets unscrambled I would
have thought um where we end up uh I
mean who knows I I I I wonder whether
the way the world is going in 18 months
two years time whether there won't be a
big rethink you know in the EU as well
as here and it is possible that the
whole EU project gets recast in a way
that's acceptable to us but to answer
your question specifically I think if it
comes to a choice the British government
would as well leave both rather than um
agree to definitely it's politically
untenable to accept free movement of
labor after all that was the major Reon
why we why we voted to leave it's
therefore the case that we'll have to as
of today forly leave the single Market
but we had Steve Norris The prominent
conservative uh here just a few weeks
ago he was making the point that that
doesn't necessarily mean tariffs because
German motor manufacturers don't want to
see tariffs put on our Goods because
we'll retaliate putting tariffs on
theirs and they won't be able to sell
their uh product so we could be out of
the single Market but still trading with
the members of the EU couldn't we uh in
theory yes but you then get into
complicated things with the world
Traders organization and membership of
that which um basically I'm not
Authority on the detail of it but you
can't do a favorable deal with one
country as it were without offering it
to others and so there are
complications about how you go going
forward but to your point or to Steve
Norris's point about Germany sells a lot
of cars here that is true but Germany
not many other EU countries export a
great deal to us I mean the bulk of what
we export and it comes from Germany oh
and of course Ireland as well um and
given that there are 28 Nations in the
EU and they've all got to agree to some
kind of deal then Germany is seriously
outvoted albeit it has a lot of
clout well look let's take a break there
uh there's much more where that came
from after
this welcome back to Sputnik president
Trump yes president Trump intends both a
massive increase in infrastructure
expenditure and massive tax cuts how
will he deal with the resultant rise in
the deficit he promises economic
protectionism for American jobs and an
enter trade deals with the world and
America at the back of the queue for the
likes of ttip is all this something to
fear or as Roosevelt put it is Fear The
Only Thing Worth fearing Anthony Hilton
a captain of capitalist journalism is
still with us on the Sputnik are you
afraid of the Trump economic
prescription seem seems in Orthodox
capitalist terms rather Reckless if he
means it putting the Rust Belt back to
work with big infrastructure uh projects
whilst cutting taxes seems like a recipe
for ruin uh could be but equally um it
could work I mean clearly take the good
parts America clearly needs uh a to
provide more jobs for its people and B
to upgrade its infrastructure so it's
worth borrowing to do that uh in terms
of uh the budget deficit in the states
they've got a lot of headro there quite
honestly they they could run it as a
deficit or they could raise the money in
the bond markets I think the interesting
thing is where this goes after that I
mean clearly the the stock market and uh
if you like uh my capitalist FS are um
making a lot of money at the moment in
the hope that it will revive the
American economy and if it does revive
the American the American economy then
you know the bills pay for itself you
get more tax revenue and the deficit is
a transitory thing not a not a lasting
milstone although he's going to cut
taxes he is going to cut taxes yes um
and in a way it's a harking back to what
vagan did 30 odd years ago and that did
create a big hole in the budget which
actually was never really filled until
Clinton came in it took a long time but
in fact you know you you probably net
net the economy was better off because
more people were in work even if the
overall budgetary situation was was was
poor no I uh predicted Trump's Victory
one of the few who did because I know
the state of the Rust Belt and where
that lies on the pathway to the
presidency these swing states that he
won like Wisconsin like Michigan like
Ohio and came very close to winning some
others uh the bitterness and anger in
these places at the clintones burning of
their industrial base uh was something
that was always likely it seemed to me
to Scupper a a Clinton running for
office after all she was a chief
advocate of of the NAFTA and of ttip and
the uh Asian Pacific uh equivalent and
that's what's done for American industry
isn't it well to a point I mean I I
think even if there' been no uh NAFTA
and ttip obviously hasn't
happened uh America was still vulnerable
to cheap Imports once China came on the
scene with uh you know an extra billion
uh workers in the industrial system then
they were obviously going to flood the
world with um with cheap goods and
America just couldn't compete only if
you let them of course and he stood
outside uh for Motor plant I presume in
Michigan certainly in the rust Bel and
he said if you close this Factory Mr
Ford uh I'm going to put massive tariffs
on anything you produce in Mexico that
should have been produced in this plant
that's almost uh socialist talk isn't it
um yeah I mean you can go back to closed
economies but uh economic theory and
indeed the reality since the the war
since 1950 is
that uh trade between nations with each
specializing on what it does best
creates a better outcome for everybody
the trouble is that the outcomes or the
better outcomes are not evenly shared
and the issue in the states and in the
UK and indeed the rest of Europe is that
the benefits of globalization have gone
to a few not the many and so the the
issue is actually that that should have
been addressed rather than that you uh
you stop globalization I would say the
the outcome has been beneficial for the
capitalists and a
comprador uh around them but for the
mass of the people and this is true of
the brexit debate for the mass of the
people they don't pluck any of the
fruits of globalization so I'm asking
you as a man of the left and you a man
who knows the capitalist system very
very well um why should we believe in
free trade what's so great about free
trade why can't we do as much as we can
build and create for
ourselves because ultimately you can't
do it all I mean I have in my pocket an
iPhone um and as I'm sure you have we
don't make those in the UK do you want a
life without um mobile telephony and you
want to life without um all sorts of
products that are
we invented industry here in this
building is the Adam Smith Institute or
one of the offshoots of uh we invented
we were the workshop of the world can't
we make mobile telephones um we could
make mobile telephones the issue is
whether we could do them as well as
somebody else and do you want a kind of
inferior mobile telephone I mean we made
ships we um made cars we made all the
industrial fabric all the nations 150
odd years ago but other nations came
along who did it better and we in turn
have specialize in other things and what
we're good at today are um uh computer
software health education Finance
although uh it has issues um a lot of
these soft uh intellectually intensive
Pursuits uh creative Pursuits um the
appeal to Something anarchic in the
spirit of the British but we do that
extremely well and we sell that to the
rest of the world so that's what we
should specialize in because we'll
always if you like not always but we
might well be much better at inventing
computer games than we are now at
assembling a a car on a production line
indeed and in my own city of Dundee
that's what they do they invent computer
games they're the world's leader in that
but you know the the the point that you
make that we should specialize in what
we're good at and better than the rest
of the world at at the moment the time
will come when we're no longer best at
that I mean the Indians and the Chinese
and the Russians and so on they're not
stupid people they'll soon be able to do
all those things that you say we
specialize in just as well if not better
than us and then where will we be yes
but I mean that that's a separate issue
that I think is different from this
debate because I mean I think the real
challenge is not sorting out the mess
we're in now it's the mess to come where
the Advent of digital technology I mean
you the there are surveys done which say
that a quarter of businesses will be out
of business within 5 years because of
the impact of technology that you know
all half the children in school will
have to find jobs that haven't even been
invented yet uh you know the real threat
to the UK to the US to Europe is coming
from this huge technological wave that
is about to fake on our Shores and while
we're as focusing on the issues of
globalization and uh you know whether we
can recreate a motor industry or
whatever we're ignoring an much bigger
threat that's just coming towards us are
you suggesting that it comes from the
East uh I'm it's coming from technology
and the application of technology and
the fact you know it could be robotics
it could be AI comes down or AI all
these things which uh we at a kind of
Tipping Point in technology which is
going to sweep away so many jobs that
you know what's happened so far is just
AED and that's I think we need
desperately to start educating our kids
in school to cope with what is coming
rather than sort of focusing on trying
to recreate what we had you know 30 50
even 100 years ago is Trump a man of the
left or a man of the right economically
speaking actually bizarrely a lot of
what he says is is of the left I mean
the infrastructure spend and so on is
really quite Keynesian um and quite at
odds with liberal economics and indeed
at odds with a lot of what his own party
in Congress uh believe so and odds with
the Dem so-called Democratic party once
the party of the working class in
America so there interesting tensions in
in in the chump program of how much he
will get through before you know he
starts meeting hostility within as it
were and it may well be on the budgetary
point you know your point about the tax
cuts that much as Republic an like tax
cuts they also like balanced budgets and
you know the two are incompatible in the
short term well George Bush Senior you
remember famously said read my lips no
new taxes and indeed lost the election
largely on that broken uh promise but
isn't Trump setting out to show us that
something that the capitalists would
rather leave hidden namely that issues
like the deficit and so on are kind of
smoke and mirror trick because as QE
proves you can print money if the money
is being used for good productive
purposes as you say uh the net result is
positive yeah I mean if you can borrow
it 1% and what your building is worth
yielding two or three or 4% why wouldn't
you do it um the the issue with
government spending is when you don't
get anything in return or or you know
you're not actually improving the
infrastructure be it schools hospitals
roads whatever the the children thing
might be um so it's quite easy to borrow
money and squander it uh and Zimbabwe if
you like is is the oft quoted example
but deficit financing by itself is not
necessarily a bad thing it's how you use
the money Adam Smith just fell off his
perch elsewhere in this building Anthony
Hilton it's been a pleasure as always uh
talking to you in a word are you an
optimist Optimist or a pessimist about
Britain's future oh I'm an optimist
people are
just Anthony Hilton the dwen of
financial journalists joining us for a
special edition on the
[Music]
Sputnik and now it's your turn to tell
us what you think through the portals of
social media what's rling gri so we
wondered what president Trump will mean
for Great Britain and the world economy
so zamir says there are too many
variables to judge at the moment
protectionism and civil Strife perhaps
and Yan says a really really hope for
positive radical change but I can't see
the establishment giving up
neoliberalism radical change will happen
only through people power and Joey Zar
says do as Wall Street says or die and
finally jd1 says H I can see some roof
touchers being busy right now
that's the big question I should have
asked is it a wig or not some people say
that it isn't I hope nothing bad happens
to president Trump but I do hope someone
gets close enough to pull his wig off uh
because that would be the ultimate
ignominy uh whether Trump is a man of
the left or the right is of course an
open question but I've got to be honest
with you for me his economic plans as
announced are of the left not said
exactly that's all the tweets that we
have time for today which alas means
that's the end of the show but you can
stay in touch with us on social media
through Twitter rtor Sputnik on Facebook
Sputnik on Russia today it's goodbye
from me gatri and from me George
Galloway it's been
marvelous
w