Turning British
The entire Eurozone seems to be following Gordon Brown’s lead and working to recapitalize the banks by having the government take an equity stake in firms that need assistance. This is how Sweden successfully resolved its banking crisis in the 1990s and it appears to be the right thing to do. Here in the US, Hank Paulson seems to be edging in that direction, but he’s already wasted weeks trying desperately to find another solution and even now sort of seems to be dragging his feet — playing a very dangerous game on behalf of fealty to conservative ideology.
Meanwhile, there’s more than a little irony in the fact that Brown and his cabinet, who’ll be the heroes of this story if it turns out to have a decent ending, still look fairly likely to be thrown out of power as the Tories are boosted by the generally adverse economic trends. Maybe a thoroughgoing endorsement of Brown’s leadership from a Nobel Prize winning economist will help Labour in the polls.
20 Responses to “Turning British”
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October 13th, 2008 at 10:55 am
actually, the talk here in the UK is that the Tories are totally lost and not responding in politically advantageous ways to the economic crisis or Brown’s sudden burst of leadership. 6 weeks ago Brown didn’t look likely to make it to christmas as PM, but today I had lunch with a Tory who spent the whole meal moping that no one was paying attention to Cameron any more. As long as the economy is in the dustbin (to paraphrase McCain) we are all socialists. Huzza!
October 13th, 2008 at 11:01 am
The Economic Problem
“This problem is basically far less difficult of solution. Sound common sense can solve it. There are adequate resources for the sustenance of human life, and these science can increase and develop. The mineral wealth of the world, the oil, the produce of the fields, the contribution of the animal kingdom, the riches of the sea, and the fruits and the flowers are all offering themselves to humanity. Man is the controller of it all, and they belong to everyone and are the property of no one group, nation or race. It is solely due to man’s selfishness that (in these days of rapid transportation) thousands are starving whilst food is rotting or destroyed; it is solely due to the grasping schemes and the financial injustices of man’s making that the resources of the planet are not universally available under some wise system of distribution. There is no justifiable excuse for the lack of the essentials of life in any part of the world. Such a state of lack argues short-sighted policy and the blocking of the free circulation of necessities for some reason or other. All these deplorable conditions are based on some national or group selfishness and on the failure to work out some wise impartial scheme for the supplying of human need throughout the world.
What then must be done, apart from the education of the coming generations in the need for sharing, for a free circulation of all the essential commodities? The cause of this evil way of living is very simple. It is a product of past wrong educational methods, of competition and the facility with which the helpless and weak can be exploited. [197] No one group is responsible as certain fanatical ideologists might lead the ignorant to suppose. Our period is simply one in which human selfishness has come to its climax and must either destroy humanity or be brought intelligently to an end.
The new era of simplicity must come in. The new world order will inaugurate this simpler life based on adequate food, right thought, creative activity and happiness. These essentials are only possible under a right economic rule. This simplification and this wise distribution of the world’s resources must embrace the high and the low, the rich and the poor, thus serving all men alike.”
Alice Bailey, The Externatlization of the Hiearchy
http://www.bibliotecapleyades.net/sociopolitica/externalisation/exte1085.html
October 13th, 2008 at 11:07 am
Labour was already doomed. Gordon Brown inherited all of Tony Blair’s baggage and none of his teflon charm.
October 13th, 2008 at 11:29 am
It’s still a year and a half before Brown has to throw an election, right? So I wouldn’t write him off yet. Everybody thought Major was doomed in 1992, and he pulled it out.
October 13th, 2008 at 11:50 am
The PM’s poll ratings are up, although the Tories remain ahead. The problem is that the situation isn’t nearly as black and white as you paint it. Gordon Brown was Chancellor of the Exchequer for a decade, during which time he boasted repeatedly that the era of “boom and bust” was over, in no small part thanks to his prudent and ninja-like economic management. He also claimed repeatedly that if things went south globally, Britain was in a uniquely good position to weather the storm, again largely due to his steady hand on the tiller.
The problem is that none of these claims have turned out to be true. Furthermore, although this is a global problem not entirely within the British government’s control, far from being uniquely well positioned to weather the storm, the IMF and the OECD have both reported that Britain is relatively BADLY placed to ride it out with limited damage, due in large part to the fact that the government has overspent from the tax kitty and the cupboard is now bare. In addition, the government seems to have ignored repeated warnings over the past few months that the Icelandic banking system was close to collapse. The response to the problem may be creditable, but it’s a problem that probably wouldn’t have escalated to this level were it not for the fact that the government was asleep at the wheel.
So, yes, the government’s response to the crisis is winning praise and is generally seen as superior to the US. Huzzah. And the government has managed to seem better than the Tories in the last week or so. But the thing is that that’s not the whole story, by any means. It’s far more complicated than Labour Are The Real Good Guys But Are Getting Shafted By Events, which seems to be the narrative that has been pushed on this blog recently.
October 13th, 2008 at 12:18 pm
Anthony:
I don’t think anyone is saying that. I think it is more than Brown might be able to hang on if he helps England get through the problems in relatively good shape. It doesn’t guarantee anything, obviously. Just that he might squeeze by.
October 13th, 2008 at 12:33 pm
My understanding is that Brown’s fundamental problem is that he’s, as the British say, a wanker.
October 13th, 2008 at 12:42 pm
following Gordon Brown’s lead
I don’t think your timeline is correct: the Irish went ahead with bank guarantees, then Germany and France announced similar measures, while the British were furious about that and only changed their stance later.
Also, I’m having a hard time imagining that Brown or anybody in his cabinet will be regarded as heroes …
October 13th, 2008 at 1:17 pm
The price for all of this will be paid down the road. The money govts are pumping into banks will, once the banks start acting normal again, crop up as inflationary pressure. There are plenty of people talking about that, if you cast your net beyond the “deal with the emergency this second” partisans of the left and the right.
The better answer would just be to let banks that screwed up go under, and let the pieces rearrange themselves.
October 13th, 2008 at 1:22 pm
…he’s already wasted weeks trying desperately to find another solution and even now sort of seems to be dragging his feet — playing a very dangerous game on behalf of fealty to conservative ideology.
Or, as another commenter posted at a financial blog the other day, “they’re sure going to great lengths to avoid taking over Goldman Sachs, aren’t they?”
October 13th, 2008 at 2:30 pm
Is Paulsons dithering incompetence, ideology or worry about his investment portfolio. As was noted by EUexpat “As long as the economy is in the dustbin (to paraphrase McCain) we are all socialists”, so it’s not ideology. While I think Paulsons an ideologue, he’s not totally incompetent, so that leaves his portfolio. Why else buy bad paper?
October 13th, 2008 at 2:57 pm
The weird thing here is that Brown’s perceived strengths after a decade at H.M. Treasury make you wonder if his elevation to the top job was Peter Principle-ish. It’s rare for someone to return to one of the four great offices of state after being PM, but it’s conceivable that a new Labour leader might want him as Chancellor.
(Brown’s not a ‘wanker’, either. He’s got all of the nasty authoritarian tendencies that Blair brought to Number 10, but he’s also inherited a lot of the shit that President Tony left behind to gallivant on the world stage.)
October 13th, 2008 at 8:33 pm
Is there actually a difference between Labour and Tories these days ?
Blair-Brown kept the Thatcherite consensus mostly intact, and even had their own little round in Iraq.
October 14th, 2008 at 3:20 pm
Hey Matt … you say you don`t understand the “New Atheist” tendency to be more assertive.
Well the Brits are ahead of us in the open acceptance of freethinkers too
http://scienceblogs.com/pharyngula/2008/10/those_crazy_brits.php
Can you imagine such openness to atheists in the USA?
The only thing new here is that atheists are tired of being second class Americans.
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