Monday, 16 February 2009

The banking crisis goes political

The UK banking crisis is now heading in a different direction. In the last week or so, four new themes have emerged.

We are bored with blaming the bankers

Blaming bankers for the crisis hit a high watermark last week with the treasury committee meetings.

Their apology went some way to defusing anger. With the exception of Crosby and the HBOS whistle-blower, the bankers managed to deflect many of the most serious charges. With Crosby's head now on the proverbial pole, the public are now looking elsewhere for culprits.

Certainly, bankers did their part in creating the crisis. However, it is hard to explain the entire economic crisis in terms of bonuses, corporate greed, and a lack of bank capital.

The Bonus issue is now settled

Finally, Brown got the message. It can not be business as usual. From now on, there will be no more taxpayer sector financed banking bonuses. The public simply won't allow it.

With all parties now firmly against banking bonuses, there is now little to be gained politically from actually stopping them. The issue was a missed opportunity for New Labour. If Brown and Darling had moved earlier, they could have rode out the anti-banker bonus popular sentiment.

The credibility of the FSA is irreparably damaged

The FSA is beyond saving. No one is prepared to defend it. With the UK now in the middle of the greatest financial crisis in a century, the public has lost confidence in the institution. It is only a matter of time before the government puts it to sleep.

The crisis will destroy New Labour

There are no more wild and whirling policy options left. The crisis is moving decisively from the economic to the political arena. As such, there is a heavy reckoning waiting for Brown and the New Labour project.

The list of economic difficulties facing the UK is now daunting; a comprehensive banking crisis, contracting economic activity, rising unemployment, falling living standards, an exploding fiscal deficit and a collapsing national currency. In short, the government has created the greatest economic disaster in a generation.

With a deep recession projected for the rest of this year, any recovery in 2010 will be too late to placate voter anger and we are in no mood to forgive the architect of boom and bust.


Anonymous said...

Good news all-round, then. :)

Anonymous said...

Yet again, Alice lays before us a happy vista of New Labour crushed, and Brown destroyed.

Bring it on.

Anonymous said...

And lets not forget, with cases like Alfie the father..

The taxed-upon are now heartily fed up with feather bedding the feral underclass...

Think TFU are going to take it lying down (sic) when the taxed start demanding to pay less for these lazy, moral free wretches?

Nick Drew said...

There comes a point - it happened with Callaghan and Major in their turns - where nothing, not even 'events' can save a regime.

Let Cameron not be inveigled into giving any hostages to fortune. He has neither to bargain with anyone, nor compromise on anything.

Anonymous said...

Nice News ;-)
Thanks for posting!

K T Cat said...

This is all too easy. We need to look in the mirror.

Anonymous said...

Hello from Canada. Everybody's complaining here but one must admit that we really shouldn't - comparing our situation with yours.

From some comments here it seems as if people wanted the New Labour to be destroyed. Is that really so? I mean, do you honestly think any other party is going to be any better? One or the other.. it's all the same. If this party disappears, nothing will change. Just an outsider point of view..
Take care,