Weekend Box: Tracks Pulled From Under HS2, Speaker McCarthy Silenced & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
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TRACKS PULLED FROM UNDER HS2
This week Prime Minister Rishi Sunak used his speech at the Conservative Party Conference to announce a dramatic scale-back of the High Speed 2 (HS2) rail project, in a move that provoked a wave of public and cross-party criticism.
With the conference held in Manchester, the irony of the announcement’s location has not gone unnoticed, especially considering that Chancellor Jeremy Hunt flew to the conference in lieu of other more sustainable means of travel. Sunak revealed that HS2, originally destined for Manchester and Leeds, will instead prematurely conclude in Birmingham. His decision purportedly redirects the £36 billion which would be saved to other transport schemes in the Midlands and the North. This statement was quickly the target of wider criticism, with Labour highlighting the fact many of the schemes had “already been part of Government plans” and suggested it was disingenuous of the Prime Minister to insinuate these schemes were new projects that would be funded.
Defending his decision, Sunak cited a "false consensus" regarding the HS2 project; stating that the development is no longer financially and economically viable due to soaring costs. He also cited diminished travel in this post-pandemic era which reduces the necessity for the transport link.
These arguments have been met with substantial criticism, notably from four former Prime Ministers: Gordon Brown, David Cameron, Theresa May, and Boris Johnson, who have publicly appealed against the decision to terminate the project at this stage. High-Speed Rail Group has released a statement, putting responsibility for increasing costs at the Government’s door, stating that there were consistent alterations that led to increased expenditure. Scrapping HS2 only shifts the government's difficulty with setting a clear project scope to their new ‘Network North’ project, Sunak’s new proposal for transport infrastructure in the North.
The PM has stood firm, asserting that the ever-changing facts and the project’s setbacks demanded his intervention. However, the derailing of HS2 leaves a lingering question in its tracks: is this a justifiable redirection toward more appropriate transport development, or is this, in George Osborne’s words, ‘economic self-harm’?
Image credit/U.S. Department of Agriculture on Flickr
SPEAKER MCCARTHY SILENCED
The US House of Representatives was plunged into new turmoil on Tuesday when Speaker Kevin McCarthy was voted out of his position in a move led by far-right Republicans. The move was initiated by Matt Gaetz (Representative for Florida), whose ‘Freedom Caucus’ group of eight joined forces with Democrats to win the motion 216-210 votes.
The move will disrupt key annual spending legislation due to be passed in mid-November that will affect federal spending at home and abroad, including funding for Ukraine. McCarthy had navigated a deal with President Biden and the Democrats back in the spring, but now his successor will need to start again, facing new pressure from the Republican right who will demand deep spending cuts and severe immigration restrictions.
Gaetz and fellow rebels are another new disruptive force in Republican politics. They perform for cable news and online media more than for their constituents (1.8% of the electorate) and in this case, have been empowered by Steve Bannon and his weekday podcast. Gaetz and co-defector Nancy Mace (South Carolina) appeared for the umpteenth time on Bannon’s podcast the morning after toppling McCarthy and Bannon has raised funds on their behalf while building his own audience. He and others continue to promote Donald Trump’s MAGA agenda as Trump prepares for a second Presidential run and have been instrumental in some 70% of Republican-aligned adults still believing that the 2020 election result was ‘stolen’ from Trump.
McCarthy has confirmed he won’t run again for speaker. Leading alternatives are Steve Scarlett (Louisiana), Number Two House Representative, and Jim Jordan (Ohio), Chairman, Judiciary Committee. Both previously voted to object to Biden’s certification, in line with the stolen election agenda. Trump himself told Fox News that he had been approached by GOP lawmakers about taking on the role, and suggested he might do so, but has since used his platform Truth Social to give his “Complete & Total Endorsement” to Jordan. Trump as speaker, or someone he likes - one shudders at either possibility.
A CHURCH DIVIDED
This week marks the first global gathering of Church leaders, or synod, for four years.
This could be one of the defining moments for the Papacy of Pope Francis and the long-delayed follow-up to the Second Vatican Council of 1962, which opened the door to major reforms that were felt across the global church.
This meeting is already very different from synods past, and this is indicative of Francis’s vision to create a less top-down, more inclusive church. For the first time in history lay people — including women — will have the right to vote in a forum that was previously reserved for senior clerics.
Francis officially announced the “Synod on Synodality” in 2021 and asked regional churches to produce topics to consider. As a result, hot-button issues such as the role of women in ministry, the blessing of same-sex unions, and welcoming the LGBTQ+ community to the church will be covered.
With a more inclusive voting base, conservative wings of the Vatican are concerned that this exercise in Catholic theology has become an instrument for liberal reform. The night before proceedings began, five conservative cardinals publicly asked Francis to reaffirm Catholic doctrine on the treatment of gay couples and the ordination of women, exposing this schism. Cardinal Raymond Leo Burke, the de facto leader of this campaign, called the pope’s agenda “more political and human than ecclesiastical and divine.” On the other hand, liberals are hoping that this synod will lead to genuine reform of official teachings, particularly given Francis’s more progressive position.
However, we aren’t likely to see big changes anytime soon, and the Vatican has been quick to manage expectations. The meeting will be followed by a second one in October 2024, after which a set of recommendations are expected to go to the pope. Asked in an interview with The Washington Post whether that process might take years to finish, Cardinal Michael Czerny, a senior Vatican official, said: “no, we’re talking about centuries.”
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IN THE COURT OF THE CRYPTO KING
What goes up must come down: to some cryptocurrency fanatics the idea of that is anathema, yet look no further than Manhattan for proof, where former ‘Crypto King’ Sam Bankman-Fried is in court accused of defrauding his investors and customers of billions.
The prosecution argue that Bankman-Fried took money that customers thought they were depositing into accounts with his now-bankrupt company FTX in order to trade cryptocurrency, using their funds to finance his own lavish lifestyle. They purport that an account under the control of FTX’s sister company Alameda, of which Bankman-Fried’s former partner Caroline Ellison used to be CEO, was used to take over $10bn of customer money.
While the prosecution have argued that Bankman-Fried was still the top decision maker at Alameda, and Ellison only a ‘front’ for him in his scheme, his attorney Mark Cohen suggests that no conscious efforts were made to defraud customers. Cohen argues that Bankman-Fried’s focus was elsewhere, and that the billions taken may actually have been the fault of Ellison.
Bankman-Fried’s trial, following the catastrophic collapse of his company FTX in 2022, is a dramatic fall from grace for a man who could once have been called one of crypto’s rare success stories. With a reported net worth of $32bn (on paper), it is not hard to see why he was once known as the ‘Crypto King’.
His story has become another cautionary tale for those considering investing in crypto, if you needed another, though it might also serve another purpose. Bankman-Fried reminds us that perhaps it’s not wise to put your all your faith — and money — in a tech leader working in an industry still not widely understood, and moreover, unregulated.
Here’s looking at Elon Musk, whose company Neuralink are due to begin human trials of their brain implants.
Image credit/Philip McMaster on Flickr/License
FENTA-NIL
The US appears to be ramping up its response to the opioid drug market. This week, the US government sanctioned 25 Chinese firms and individuals allegedly involved in making Fentanyl. This follows hot on the heels of McKinsey & Co agreeing to pay $230m to local governments and school districts for ‘fuelling an epidemic of opioid addiction’ by promoting OxyContin.
The pharma opioid crisis can be attributed at least in part to Purdue Pharma, owned by the infamous Sackler family, who in 1995 released OxyContin into the market. The long-lasting narcotic drug was credited for being twice as powerful as morphine, and extremely effective for treating severe pain. Similarly, the Fentanyl patch was available from the early 1990s, famous for treating acute pain.
From 1991 to 2021, 645,000 people have died in the US from overdoses involving opioids (both prescription and illicit) with 4 in 5 people who try heroin today starting on prescription drugs, according to the American Society of Addiction Medicine. Fentanyl has been linked to 109,680 deaths in 2022 alone.
McKinsey had already committed $641.5m on agreeing settlements for their part in marketing OxyContin. The clampdown by the US government comes as the Sackler family find themselves in the spotlight as the kingpins of the opioid crisis. Last month, Netflix released a 5-part dramatization of the OxyContin story, ‘Painkiller’, based on Patrick Radden Keefe’s New Yorker article ‘The Family that Built an Empire of Pain.’
As America reckons with what the Sacklers and Purdue Pharma have wrought on the nation, it is unsurprising that the government should impose a bevy of sanctions on China, one of its largest suppliers of Fentanyl-related substances. However, it won’t do anything to help their already cold diplomatic relations.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.