Let's do discuss what you term the "loss of the [English] argument" and the need to rebuild the idea of Englishness. I have to say that this apparent resignation to historical inevitability--the end of empire, the American century, the European idea, etc., etc.--is quite remarkable. And it gets to my dissatisfaction with this new literature of cultural decline, if I may arbitrarily turn Buruma and Barnes into a movement. Bemoaning les temps perdu seems a rather obvious literary reflex, even when it is as smartly articulated as it is in these two books. In America, the literature and politics of cultural decline have been a powerful strain virtually since Day One off Plymouth Rock, and America persists in not falling to pieces no matter how hard and hot Bill Bennett blows. As a former professor of mine, Andrew Delbanco, smartly pointed out in his lectures on Puritanism, the incidence of jeremiad was often a good contraindicator of spiritual health: The doomsaying turned out to be proscriptive rather than descriptive. Viewing England from the perspective of the United States, one sees a country in robust health, a net exporter of cultural influence, easily lapping the still hopelessly ancien régime Italy, France, and Germany in matters of economic policy, techno-literacy, the arts, literature, and the primary late-'90s crafts of advertising, P.R., and magazine editing. (Besides, who needs empire when you have Tina Brown?) The idea of Cool Britannia, the "rebranded" country, is as much a joke here as it is in England, but Brittania is cool, dammit.
What Buruma gets at, if only in passing, is how the stolidity of Establishment England has fostered a fantastically free-range refusenik class. England has always done counterculture better than anyone: You can draw lipstick traces (as the film director Todd Haynes does in Velvet Goldmine, his sadly overlooked ode to '70s English glam rock) from Oscar Wilde through John Osborne and Ealing Road to Lindsay Anderson and David Bowie and on to Elvis Costello and Martin Amis and Jarvis Cocker (he's the lead singer of Pulp, the working-class Brit-pop band whose album Different Class is the most thrillingly nasty dissection of sexual and class politics in the rock canon) and Paul Gascoine and Alexander McQueen and Damien Hirst. What is brilliant about Tony Blair's "rebranding" is the way he has (implicity) cast his lot with the post-punks and against John Bull, the way he has made English culture synonymous with a kind of rolling insurrection. This is why Barnes' novel feels like an elegy for a certain kind of England in the guise of an elegy for England itself.
I'll promise if you will to dig more deeply into the Buruma tomorrow.