Debt, PMs, Chancellors and Interest

If you hang a round in your job too long your mistakes come back to haunt you. That must be what Gordon Brown has been learning!
Unravelling them—specially when the luck turns against you—can be not just daunting, but reveal weaknesses in the thinking. Just so, in my opinion, with our Dear Leader.
That weakness was initially revealed in 1997 when, as Chancellor, he virtually destroyed the regulatory system for the finance sector and the banks. It is a matter of personal satisfaction that I recognised his mistake then. Now we are all paying the price for the excesses that has permitted.
As Prime Minister the millstone of that financial policy is even more firmly round his neck. And, just as the publicity machine was building up to his big announcement on mortgages two more blows struck!
First his new Chancellor and long time helper, Alistair Darling, revealed an attractive attachment to honesty, explaining that the crisis before the world is certainly the most severe for 60 years—i.e. Since we all started picking ourselves up after WWII. The PM has been strenuously denying this truth. The Chancellor’s view was widely misinterpreted as applying to only this country.
And no sooner were the words of the PMs package of ‘help’ out of his mouth than the OECD, a very powerful voice in world economics, declared this country worst placed to handle the downturn—to be rather mealy-mouthed about the crisis ahead.
For reasons which escape me—except that GB’s luck has turned—the further OECD point, that the Eurozone was almost equally affected, escaped mention and seemed not to impact the foreign exchanges where the proud pound was further humbled.
The package itself shows further the inability of the PM to grasp the needs of starting to bale out, just as he didn’t take care to see there was balance in the markets 11 years ago. His moves are a costly way to bring help to a few people, and are largely not very effective in altering the slide in house activity, prices or rising debt problems.
Had there been serious thought about the most effective moves to ease and stabilise Britain’s financial woes, and I mean mostly those of the ordinary people upon whom the modern economy depends, his attention would have been on interest rates.
I have written at length in this blog, and have set up a page on my critique of interest rates and what we should all be doing about it. What he should have done about it is to give the increasingly more aware regulators [the FSA, the OFT] the power to control interest rates and demand a reduction in the rates charged by banks and credit card companies through those powers.
That would actually have cost the country rather less for a far more effective contribution to the difficult process of stabilisation and the rebuilding that will have to follow.
Being Gordon, however, he will be looking round for another grand gesture, another risk-taking bank to save, and be committing another £100bn to the bottomless pit that is The City.

Joseph Harris
Debt Control Man

Advertisements

Tags: , , , , , , ,

3 Responses to “Debt, PMs, Chancellors and Interest”

  1. Aaron Wakling Says:

    Nice writing style. I look forward to reading more in the future.

  2. UK Voter Says:

    As I have written on my blog, I believe one of the primary reason for the failure of government departments is the fact that the ministers in charge have little or not relevant experience. In my view, this is akin to placing someone in the position of CEO at Barclays and then letting them learn on the job.

  3. debtcontrolman Says:

    Unfortunately, UK Voter, I think you are absolutely right. The wiser ministers talk to and listen to their civil servants, who have been around and doing the job in a continuous tradition for centuries.

    I would only add to your comment that too few modern ministers actually do seem to do that learning bit! 😉

    Joseph Harris

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: