As the Guardian reports tonight:
More than £5bn was wiped off the value of three of Britain's biggest banks on Monday as global financial markets took fright at the deepening crisis in the eurozone.
Like it or not, the next crisis on the scale of the collapse of Lehman Brothers is now imminent. I doubt we can avoid it.
But last time the UK had a man in charge who may have been unpopular but who had a brain big enough to handle the challenge with a Chancellor cool en0ugh to deal with the crisis. Brown and Darling led the world - even if briefly - and saved the world's banking system by their actions.
This time we have a Prime Minister surrounded by scandal, immersed in controversy, shown beyond doubt to be of poor judgement and with few with any faith left in him. And he is supported by a Chancellor who has shown himself economically incompetent, whose policy is so very obviously failing and who has no record for sound decision making on which he can rely.
We're facing another massive economic crisis, but this time we haven't got the people in charge able to deal with it.
That's exceptionally troubling.
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Hi Richard – so the banking system was worth saving? Do you disagree with Golem XIV’s description of the bailouts as the “ultimate failure of imagination and courage by a generation of political leaders”?
http://golemxiv-credo.blogspot.com/2011/06/killing-fields.html
Not that Cameron and Osborne would have done any different, and I agree they appear particularly unsuited to deal with the gravity of what is currently unfolding.
Yes – it was worth saving – it runs our money
The necessary corollary – which has not happened – was reform
That will have to happen now
RM – This argument is not worthy of you. It presupposes influence that the Prime Minister and Chancellor just don’t have – for good or ill. You are perpetuating a personal myth of control that just does not exist.
Absolute nonsense.
I am under no illusion about the amount of power the Prime Minister or Chancellor has: it is clearly limited, as are the faculties of any personal holding such high office. They are not superhuman, and I’m well aware of it, and are as limited as you and I.
But it is absolutely untrue to say that people holding such offices do not wield enormous power: they do, they should, they must, and it is their duty to exercise such power for the benefit of the people of the country that they serve, and the world at large. They can choose to do so, or not. The option is available to them.
Gordon Brown did exercise such power when required in 2008, and so did Alistair Darling. Make no mistake about it, they fundamentally changed the course of the financial crisis. Such opportunities may only arise rarely, but that does not diminish their importance.
Your argument is wrong, and I presume deliberately wrong, and fatuous. I’ve no idea what motivates it, except I suspect a contempt for democracy.
“Brown and Darling led the world — even if briefly — and saved the world’s banking system by their actions.”
The price of gold and the value of the swiss franc tell you everything you need to know. The 65 year experiment of funding a welfare state through borrowing in the hope that future generations will repay, coupled with a dismantling of industry, a demographic bulge and hubris on an unimagineable scale is coming to an end. Brown will be remembered not for saving the world but for selling the nations gold reserves at the bottom of the market because he thought his “prudence” was a more solid foundation for the nation’s finances than reality.
It is too late for Cameron to do anything meaningful. Politicians of all hues have failed us miserably over the decades and now reality is coming home to bite.
Oh so easy for a high-powered Jersey attorney to declare. Hidden away in your enclave, created by those with power to undermine the whole democratic process you pronounce that that process is dead.
Far from it: those who believe in democracy will exercise their power to deliver well-being of the people of this world and that includes a welfare state for the benefit of all
What, I wonder, is your alternative to the democratic process, which you so clearly, and explicitly within your comment, treat with contempt? Might it be the corporate state which is so obviously powerful in Jersey? That, of course, is fascism.
Do you suspect the current scandal will dissolve the government? Can someone with a solid understanding of economics explain how we will realistically cope with another meltdown? Saddling everyone of us with the bank losses isn’t fair.
No Richard, far from it. I just believe that big government is actually inextricably linked with big business, and if you want an end to a globalised economy that thrives on environmental destruction and alienating people from their labour you need to get rid of both. Big government is financially unaffordable: that is why Europe is facing bankruptcy.
If you think working for a large corporation and having a vote every five years that makes no difference is democracy then that is your choice. If you think living on a vast council estate where you have no prospects for a job but get a slug of cash every week is democracy, again, your choice. I believe in a form of democracy that allows people to have more control over their lives. What we have seen over the last 50 years is a deliberate campaign waged by governments and business to infantalise people and put basic essentials from education to food production to clothing and housing out of the control of ordinary people.
We have created a world without values, based on passive consumerism reinforced by enslavement through television (the reality, as published last week, is that the average British person watches television for 9 hours PER DAY). This is not democracy, this is not living, yet name a single politician who is doing anything to allow people to take back control of their lives?
And it should go without saying that the political process in Jersey is as moronic and unthinking as that in the UK. Just because I live here doesn’t mean I support it, any more that you support David Cameron.
Off you go to utopia then
But you won’t find it
Who published that the average person watches TV for 9 hours a day? They might leave the TV on while they do other things. No one sits glued for 9 hours day. Your vision of the brain-dead council estate social benefit leech is ignorant. Some people have found a loophole which leaves them just above the poverty line rather than going to work for minimum wage. To some of these young people the future looks bleak. They need vocational training, transportation allowance, childcare. Every day we hear a story of one more job seeker in his or her twenties finding work because they have received help.The pattern is being broken. But sweeping welfare reform requires an investment in people, not a threat to pull the rug out from under them. Ask Bill Clinton how it was done in the states! Come and live in my neighborhood for a week. The Big Society isn’t going to help these young people. They need self-esteem and real skills, not a golden opportunity to paint fences for the council.
http://www.alertme.com/press-releases/alternative-census-reveals-lifestyle-average-british-family-3916.html
So the TV is on for 9 hours day and they may not be watching it. I am pleased that you believe that the poor have been exceptionally well served by the state for the past 65 years and that it has only been in the last 14 months that things have gone wrong.
I agree that people need “self-esteem and real skills”. I just don’t think training people to work in call centres for a global corporation provides either. But what if people were taught to repair things – ah, but there is nothing left to repair because the globalised economy has made everything electronic so when it fails it cannot be fixed. And the government has done nothing to prevent it.
How about that for a simple idea that would create lots of jobs and reduce environmental waste: make it compulsory for any company that sells items within the EU to make publicly available information on how to repair the item and to provide any assistance required to make a repair at a cost basis. No government cost but the potential for a generation of people to learn the joys of fixing things (and its child, making things), rather than being a passive consumer.
Whoa there RM, I am a great believer in democracy. It’s just that we don’t have a very good one in the UK. The political class for all parties is drawn from a very narrow social group. My long answer is that we don’t have the governmental machinery to run a country of 64 million people properly let alone an international dimension. For example the Civil Service was designed under a 19th century model not a 20th or 21st one. I have come into contact
with various government bodies, including the Treasury and I can tell you that the level of expertise is woeful.
Your alternative then?
Try being positive
“But last time the UK had a man in charge who may have been unpopular but who had a brain big enough to handle the challenge with a Chancellor cool en0ugh to deal with the crisis. Brown and Darling led the world — even if briefly — and saved the world’s banking system by their actions.”
Well, capitalism was bailed out by the government. It saddled the country with a debt that wasn’t theirs. All Brown and Darling did was put off the inevitable anyway. There is a very good chance that these banks will fail again, with the taxpayer required to bail them out again. Why were no regulations or any real obligations put on the banks in return for the bailout?
In my opinion, the banks should have been allowed to fail. The government could then have stepped in and ran the banks on behalf of the people, rather than keeping private banks and financial institutions afloat at public expense.
Do we really need the moral hazard of banks running riot safe in the knowledge that the taxpayer will step in and pick up the tab like they did in 2008 if they mess up again? I don’t think so!
“The necessary corollary — which has not happened — was reform
That will have to happen now”
What specific kind of reforms are most needed? Should fractional reserve banking and mark-to-model accounting be abolished?
I agree with you that Gordon Brown took a more robust line of action with the bankers and I suspect that he ruffled a few feathers. You will recall that Peter Mandelson, the ever faithful bankers’ conduit, was brought back from Europe to ensure that we folllowed their agenda more closely. Others have raised the question “How much power do our leaders actually have to wield?” This is part of the answer.
David Cameron appears simply to act out the role required of him by the bankers and, so far, has avoided any real criticism from the part of the press which is financed by the bankers. Of course, this may all be about to change.
“I agree with you that Gordon Brown took a more robust line of action with the bankers and I suspect that he ruffled a few feathers.”
When? Did Gordon Brown introduce a Tobin Tax on the banks? No he did not! Did Gordon Brown break the retail banks from the investment banks? No he did not! Did Gordon Brown introduce any taxes or regulations of any kind on derivatives and other forms of casino capitalism? No he did not!
Did he capitulate and give the banking and financial sector a bailout amounting to £1.4 trillion of taxpayers money without any strings whatsoever attached? Yes he did! Did the government he belonged to create £200 billion on a computer keyboard to buy back bonds from banks (or their bad debt) in an attempt to free up bank liquidity for the banks to lend, which only resulted in commodity prices going up, the banks sutting on their money and not lending or using the money to gamble with derivatives, effectively changing the economic situation not one iota? Yes he did!
Did he intend to use public cutbacks to cut the deficit rather than obliging the banks to pay it off being as they were the ones that caused it in the first place? Yes, he certainly did! Please can you give me one example when Gordon Brown was robust with the banks and ruffled their feathers, please?
Yes, Stevo, I agree with the points you make. Certain bankers perceived that he was going to cause them problems and they ensured that his actions were totally diluted.