While my time at the helm of Notes resembles Jay Leno’s shortened primetime tenure, the last three months have been quite fun. I have written for several daily newsletters in my career; none of them have been as outspoken and responsive.

Every day, my inbox was filled with the well-informed opinions of readers from across the globe. Without a doubt I will miss your additions to my inbox, even the less-than-friendly missives – they keep me on my toes.

But I don’t want the final edition of Notes to be some sappy, look back on our history together, especially since that history only spans to November.

Instead, I want this last column to be just as informative and actionable as I hope the rest of our editions have been.

With that, I take you to the hallowed halls of the U.S. Supreme Court and a ruling issued just hours ago.

The nation’s top court has decided that legislation created in 1990 that restricts the amount of money a corporation can donate to a political campaign violated constitutional free-speech rights.

With the court’s decision following party lines, the five conservative judges outvoted their four liberal counterparts. The decision can be considered yet another win for the nation’s conservatives during a week that has proved costly for Democrats.

With corporate “citizens” now able to virtually unload their treasuries in an attempt to gain favorable leadership in Washington, Big Business has gained even more power amongst the nation’s ever-greedy politicians.

While I am just about as conservative and pro-business as can be, I am not sold on this ruling. It’s not so much that I don’t feel corporations should have the same rights as citizens. It’s because I believe all campaign donations need to be limited.

The path to Washington is not filled with good deeds, fairness and logic, but is paved with the golden goodness of campaign contributions. Cash equals votes.

Imagine the next presidential election when Goldman Sachs unleashes part of its $13.4 billion bottom line on getting a Wall Street-friendly politician at the wheel. It won’t be good for the country and it won’t be good for the economy.

Now, don’t think I am laying the blame for this decision on the Supreme Court. Although party lines suspiciously decided the vote, the court followed the laws and precedents before it… I hope.

If we want to rid ourselves of a Washington that only represents special interests and lobbyists, we need to ensure politicians don’t get any more money than they need.

So I leave you with this: Do something about it!

Write your representatives, protest, join a tea party; don’t just sit back and complain. Your financial wellbeing should not revolve around what is happening in Washington.

Until we fix this mess, sadly, your wealth has everything to do with those morons.

It’s up to us to fix it.

Enjoy today and the days beyond,
Andrew Snyder

“It’s the economy, stupid.”

And it was economic worries that were on the minds of most voters who entered the polling booths yesterday. Those on low-incomes had recently been hit by the scrapping of the 10p tax rate. Those better off have the memories of Brown’s stealth taxes. And, of course, the ever-present credit crunch is making all of us nervous.

Where now for Gordon Brown? If he leads Labour into the next general election, Labour will lose. That certainly seems to be the opinion of many in Brown’s own party.

Call me a conspiracy theorist, but I reckon Labour backbenchers deliberately bided their time on the 10p tax issue. Brown announced it last year in his final Budget as Chancellor. But it was only once it came into force — conveniently one month before elections — that the rebels kicked up a stink.

Few MPs in marginal seats are looking forward to fighting an election under the Flag of Gordon. They know that the struggling economy will give opposition parties some priceless ammunition over the next couple of years. Brown can’t really duck those bullets — he was Chancellor for ten years.

Expect further dissention in the Labour ranks. In fact, the only people who stand to benefit from Brown’s continued premiership are the Conservatives. If they’re clever they’ll keep the pressure on Brown moderate enough that he stays on.

But if he wants his party to stand a chance of retaining power, he won’t. The only reason he might stick around is if he’s extremely stubborn.

Oh.

Who will build those 3 million houses?

The Government has grand plans to build 3 million new homes by 2020. Trouble is, who’s going to build them? And if anyone does want to, will they be allowed to?

Today we read that private housing orders during the first quarter of the year were 29% down on those in the same period last year. The construction industry, as everybody knows, is in a slump. Homebuilders are building fewer houses.

I’ve said this before about mortgage lenders, but the same applies to homebuilders: private businesses make decisions based on what’s best for them. Not to hit some government target.

This is how it should be, of course. This is capitalism.

Recommended

—FLEET STREET LETTER ALERT—

3 “Gloom-Loving Stocks” for the Coming Recession

Dark clouds are gathering over the UK economy.

But for contrarian-minded investors, this spells opportunity.

The Fleet Street Letter has just been given permission to share three such money moves with you today.

You can read the full briefing here.

Forecasts are not a reliable indicator of future results. Your capital is at risk when you invest in shares, never risk more than you can afford to
lose. Please seek independent financial advice if necessary. Fleet Street Publications Ltd. Customer Services: 0207 633 3600.

So at some point this policy will probably be quietly ditched. But as I’ve noted above, Gordon Brown may not be at the steering wheel for that particular U-turn.

What went wrong with Exxon?

On Tuesday Garry White wrote about the “earnings surprise” gravy train. Oil analysts are consistently underestimating the oil price, which means they also underestimate oil company profits.

This has created a great investment opportunity.

But yesterday ExxonMobil announced that its profits had missed consensus. That is to say, they were less than analysts expected.

So does that mean Garry was wrong?

“No,” says the man himself. “This says more about Exxon as a company than it does about the sector. This gravy train is still on the rails, my friend. Choo choo!”

Find out why a defiant Garry says: “There’s nothing wrong with my assessment!”

China’s next big investment…

As we all know, China’s growing rapidly. But to achieve this, it needs raw materials.

And where better to get them than mineral-rich Africa?

“This deal will net the Chinese up to 10 million tonnes of copper, and 400,000 tonnes of cobalt,” says an excited Manraaj Singh. “Not to mention how much it could make investors who get in now!”

Find out where Manraaj believes the next multi-billion dollar Chinese investment bomb is about to land…

There was a time when these meetings were sufficiently rare for the President’s authority to reinforce that of the Prime Minister. Harold Macmillan had a successful meeting with President Eisenhower, which helped him to win the General Election of 1959. But the coinage of summit meetings has been debased. I do not read any comment, or meet anyone, to make me think that Gordon Brown’s Washington visit, or his speech at the Kennedy Centre, have strengthened or consolidated the Prime Minister’s position.

Indeed, the Prime Minister’s loss of public support seems to have continued since his return. It is the Labour Party which seems most disillusioned. Conservatives are rather surprised at the sudden decline of a Prime Minister whom they were accustomed to respect when he was a long serving Chancellor of the Exchequer. No doubt Conservative voters share the disillusion of the electorate as a whole, but they are not affected by the internal stresses and disputes of the Labour Party. Labour supporters are shocked by the suddenness of the swing in the polls, where Conservative voters are pleasantly surprised.

Certainly the Conservative Front Bench expected Gordon Brown to have a much longer honeymoon after he became Prime Minister, and feared that he would call a snap election, to win a fourth Parliamentary term for Labour. In the event, Gordon Brown decided not to hold a General Election in September or October of last year, though the Conservatives had feared that he would hold such an election and win it.

Whatever his reasons, Gordon Brown made the worst of this situation. He postponed the election to 2009 or 2010, and found public opinion moving against him. His early honeymoon was exceptionally brief; there was a surge in Labour polling figures which lasted for three months, after which the Conservatives went back into a lead which they have retained for the last six months. Current opinion polls suggest that the Conservatives would win a General Election outright.

The Labour Party is in disarray, just as the Conservatives had been in the 1990s. Gordon Brown as Prime Minister is a much less impressive Minister than he was as Chancellor. His whole mental apparatus seems to be less suited to the Prime Ministerial role. The public eventually came to lose confidence in Tony Blair, but Blair was an impressive Prime Minister in his early years. If he had not joined in the invasion of Iraq, Blair might not have lost his popularity. Even with Iraq, Blair was still able to win the General Election of 2005, if by a reduced majority. In 1997 and 2001, Blair had won by a landslide.

It does not now look as though Gordon Brown has the ability to lead Labour to a fourth General Election victory. He lacks the leadership qualities. Gordon Brown certainly does have personal advantages when compared to Tony Blair; he understands economic and financial policies much better; he has a better grasp of detail; he is a less superficial personality; he probably has a better understanding of his briefs. As against those advantages, Blair is a much better speaker. Brown can do the hard-slogging detailed parliament debate, but his big public speeches, particularly those he has given to Labour Party Conferences, are dreary and monotonous lectures, whereas Blair – and indeed David Cameron – give attractive theatrical performances. Brown is perhaps the master of the small print, where Blair is the master of the headlines, and the sound bite.

Unexpectedly, it is Gordon Brown’s greatest strengths which are now giving him the greatest trouble. For 10 years, Brown burnished his reputation as a prudent and successful Chancellor. In the last nine months that reputation has largely been destroyed by the world banking crisis, and by Labour Party resentment of the abolition of the 10p tax band. Labour Prime Ministers are not expected to concentrate on taxing the poor. There is no room now left for cutting taxes or for increasing social expenditure. There is a global threat of recession. Gordon Brown as Chancellor dominated government economic policy. Now he is a Prime Minister on the defensive. The next two years may be as difficult for him as the last two years of the Conservative Government were for John Major. The voters increasingly think it is time for a change.

Regards,

William Rees-Mogg
For The Daily Reckoning

Editor’s note: Former Editor of The Times and adviser to Margaret Thatcher, William Rees-Mogg now sits as an independent peer in the House of Lords. This was first published in The Fleet Street Letter

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