Tuesday, 7 October 2008


First, a quick plug for the Financial Inclusion Centre, which was set up by ex-Which? policy supremo Mick McAteer. Mick has been tearing a strip off the financial services industry for 15 years or so now. Most recently he had pop at Ros Altman for scaremongering about Personal Accounts. He’s also one of the few lefties out there really interested in how markets work.

Obviously it’s a bloodbath out there in terms of banking stocks, which does beg the question what impact the shorting ban has had.

Mr Gray welcomes the appointment of Paul Myners as City minister.

As we all know, the public sector is hugely inefficient, the state is rubbish at doing anything and the 'wealth creating' private sector is best left to itself to generate, invisible hand stylee, benefits for all of us. We know this because groups like the TaxPayers Alliance have been reapeating this mantra for years.

Today the TPA blog Burning Our Money says: "Government money is the only realistic option for shoring up our banks' balance sheets quickly. And if that fails to restore confidence, outright nationalisation is the only thing left."

And finally, David Aaronovitch has a good bit in today’s Times about the crisis that hammers home the lack of answers out there:

there is my old comrade Bea Campbell, declaring that, within two decades, unrestrained capitalism “in doing its thing, unrestrained, it has brought the world to the brink”, though she doesn't say what of. Then, admitting that “progressives” are disorientated and unorganised, she adds: “And yet, and yet... progressives interested in a dynamic, inventive, co-operative, democratic and egalitarian esprit didn't create this conjuncture, but it is the moment we have been waiting for.”
The moment we have been waiting for to do what? I mean given that the world is supposedly “on the brink”? Bea might have used the word socialist, because at least that connoted a belief in an alternative economic system. But now there is no such belief, and what the “Left” seems to argue for is some kind of odd return to the capitalist settlement as at 1980, before Reagan and Thatcher got their hands on the policy levers.
So where does this fantasy - which could easily seduce a section of the Labour Party - take us? Thatcher partly won the legacy battle because, having opposed the privatisation of British Telecom, even the most purblind social democrat could see that she had been right and didn't want the old BT back. They could also see, with the Common Agricultural Policy, where protectionism got us. Don't just say “better regulation” or “taxes on the fat cats”, comrades. That's not a new dawn.
So these gentle mumblings will turn out to be like Monty Python's Boring Prophet from The Life of Brian who predicts merely that things will be put inside other things. We have yet to experience the real consequences of the credit crunch - the joblessness, the spending cuts, the creation of a pessimistic generation. When those hit us we can expect the more exciting prophets, the soft sellers of millenarian brands, the BNPs, the scapegoating anti-capitalists of the near fringes, to begin to affect the mainstream politics of the country.


Charlie Marks said...

Aaro shows, not a lack of answers, but a lack of hope. He thinks that the crisis will inevitably result in an economic depression - that we can't fight our way out of it. He's a prophet of doom himself.

In a few hours time Alistair Darling, erstwhile Trotskyist, will announce the part-nationalisation of the banking sector. The credit crisis facing businesses large and small could be over within a matter of days if the political will for it exists...

Tom P said...

I dunno Charlie, I'm not sure the bank bailout is the end of it by a long way. Paulson reckons more US financial institutions are going to go under - that's bound to have knock on effects. And I'm still waiting for some of the private equity buyouts done at the top of the boom to start unwinding.

Charlie Marks said...

I was talking about the situation here in blighty, rather than the US - where undoubtedly the situation is worsening.

I'm not that happy about the bank restructuring (perestrioka!) thing being put in place - but hopefully the interest rate cut (being passed on by some of the big banks) etc. will allow workers to get paid, businesses to keep on providing goods and services, and so on.