Here is a must-read article from Nick Cohen in today's Observer. I recently read one of Nick's. I disagreed with almost everything he wrote, yet thoroughly enjoyed the book.
In this article, he makes some very interesting observations about the UK today and the demise of the New Labour project.
Unlike the crisis of the Seventies, which shifted middle-class opinion rightwards, today's crash cannot be blamed on striking trade unionists. The worst you can say about the mass of ordinary people or, indeed, the mass of middle-class people, is that they allowed the bankers to persuade them that they could safely borrow to excess. Speculators running riot brought this emergency. The lazy regulators at the Financial Services Authority who did not and, if their lifting of the ban on short selling is any guide, still do not see the need to control financial capitalism, were their accomplices
The characteristic villain of our day is not a modern equivalent of Arthur Scargill, but Sir Fred Goodwin, who made £20 million from the Royal Bank of Scotland and NatWest, then left the taxpayer with an unlimited liability for the cost of cleaning up the mess.
9 comments:
Sorry, I can't agree.
What happened here is that Nulabour copied the Tories' idea of having a house price bubble (the Tories did this in early 70s and late 80s), which is easy to do, all you need is easy credit/low interest rates; severe planning restrictions ('all hail the hallowed greenbelt'); plenty of 'house prices can only go up' propaganda and a population that is majority home owner and obsessed with house prices.
Sure, plenty of people at banks and property developers made hay while the sun shone, but they did not rig the markets or make the rules - they merely exploited the stupidity of the electorate and the cynicism of the government.
And if anybody thinks the next Tory government won't pull exactly the same foul trick, well, think again.
Well there is plenty of blame to go around.
I pretty much agree with MarkW, other than to say if NuLab and the Boe had understood the impact of savings from south east Asia we could have paid more attention to credit growth in the economy. Which Marks LVT would have had the added effect as being a second pop off valve, when we had none.
Lets face facts NuLab were in on the cheap money deal, they borrowed too and set a great example for business and households to follow. They also received lots of lovely Tax Pounds to righteously spend like only the wonderful thoughtful loving left can.
Another failing was the idea of giving up national safeguards for international kudos which our politicos so love. Maybe if the so called authorities had noticed China artificially holding down interest rates in the West by buying up loads of reserve dollars, then who knows, overall they and the boffins they employ are paid shed loads from the taxpayer to anticipate such failures and possible problems, but national interest is such a dirty word in polite circles. (off course the Euro is good, its international therefore good in itself)
And finally my favorite to tell your NuLab supporting friend, the FSA set up by Crash Gordon himself, employs 3000 people, of which at the Northern Crock desk, Britians 5th biggest bank with a very novel balance sheet/business plan, only 3 people where on look out for the taxpayers and voters money and interests.
Personally every economist at the treasury, BoE, FSA from 1999 onwards should be either sacked or demoted at the very least.
Planes stay in the air becasue they have failsafe backup systems, I see none here, The pilots had switched on autopilot and were at the back off the plane pissed and shagging the air hostesses. Crash Gordon was having an excellent sexual encounter with himself.
"Unlike the crisis of the Seventies, which shifted middle-class opinion rightwards ..."
Oh no. Pleeease NO.
Not a move to the left. Can the people not see that for the past ten years we've been in the grip of a left wing takeover ? Politically at least.
Nooooooooooo
Lazy regulator = lazy government
They set up the regulation !!!
It was their job and they failed totally !!!
The other job of government is to set the role of the bank of england i.e. it should be to control ALL prices not just shop prices i.e. they should have seen house prices and jacked interest rates to balance the economy by reducing lending/money supply.
This was another government failure.
This is typical 21st century 'take no personal responsibility whatsoever' speak. The only reason people borrowed too much was their own choice. No one forced anyone to remortgage the house and spend the proceeds on plasma TVs and Mini convertibles. Just because the bank will lend you the money, doesn't mean you should borrow it, and that you won't have to pay it back.
Society is made up of individuals, and the sum of our individual decisions has created todays crisis. Its no good blaming 'bankers' or 'the americans'. The blame lies squarely with us all.
Society is "made up of individuals" but many are poorly educated and depend on the good will of the more discerning to not lead them astray. Consider why "society" pays outsize salaries and bonuses to the top financial managers. They become responsible for managing community monies and the government regulators become the accomplices and enablers of the distressingly greedy dysfunctional irresponsible people who are only concerned for their own wealth accumulation, not unlike dragons in the cave guarding their useless treasures. What is needed is a Kwakiutyl-like Potlatch, perhaps an enforced one so that useless wealth is distributed to those who are sorely in need of it.
I completely agree with electro-kevin. This is the radical left right now, the banks are in the process of being nationalised, private capital(pensions) are legislated to government funding, an already huge public sector is under proposals for emergency expansion, allocation of housing is moving more and more to state provision, and we are at the brink of exchange controls, availability of work is restricted by racial group and background as defined by government.
How much further left can we go?
@ Hugh: let me guess - you're one of the educated sorts who don't need to told what to do, its just those terrible unwashed types down the road who need to be saved from themselves, eh? The Man from the Ministry really does know best I suppose?
Sobers says "Its no good blaming 'bankers' or 'the americans'.
Agreed so far.
"The blame lies squarely with us all."
Don't look at me, guv. I'm not taking any blame for other people.
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