Sunday:
So Mr Frown struts the world stage, master of all he surveys, and brings us a world summit pledge to "restore growth" (also, presumably, cure Cancer, achieve World Peace and above all resurrect the Golden Goose returning things to normal).
All jolly good as far as it goes. The only problem being it hasn’t actually GONE anywhere yet; all of this TALK is JUST TALK.
The summit HASN'T arrived at any agreement.
The economic indicators are still all set to BLEAK.
And the bankers are still paying themselves BONUSES while foreclosing on businesses and homeowners.
This ain't over yet!
As the late and much lamented Humph could have put it: now as the last REINDEER of GOVERNMENT DEBT is hitched to the SLEIGH of the Bank Rescue Package… and as we hunker down in the SNOW DRIFT of recession watching the HAZARD WARNING lights of the Bank of England blink away the last electricity in the battery of the economy… it's time to look at the final scores.
Graham and Tim have got the Bretton Woods agreement, to stabilize exchange rates and ensure free trade; establishing the gold standard, later replaced with the Dollar as reserve currency for the World; and setting up the World Bank and International Monetary Fund with the power and the ready cash to intervene to support economies in difficulty.
While Gordon and Mandy have got, er, a statement from the G20 that they will continue to make VIGOROUS EFFORTS.
Riiiiiight…
Meanwhile, back in the REAL World, with Japan, Germany and indeed the whole Eurozone already in recession, I think we need to admit that we are in recession here too.
(Yes, I KNOW that it takes "two consecutive quarters of negative growth" before the Government has to admit it, but just because we haven't had the statistics YET doesn't mean that we can't be IN the second of those quarters.)
The STAGGERING news that Citibank is to cull seventy-five thousand bankers worldwide, many of those jobs being in their Stump at Canary Wharf, merely comes on top of a week of many other redundancies, including ten thousand jobs lost at BT.
While, as young Master Gideon could tell you – indeed it's hard to shut him up! – the pound has taken an, er, pounding on the money markets.
Inflation is A BIT LESS out of control than last month (though "bizarre" doesn't begin to cover the newspapers describing this as a "fall" in prices when prices are "merely" increasing by more-than-twice the Government's preferred rate rather than last month's two-and-a-half times). In fairness, the price of petrol and some food HAS come back down a bit, but the figures simply do not suggest we are deflating yet!
You can't even DREAM your way out of the recession with the news that the Premium Bond prizes are being cut.
So what's to be done?
Well, clearly the BIG problem is Americaland.
Bretton Woods was achievable because America was in the driving seat: economically virile and yet with huge moral authority; they were able to press for a system that supported international trade because there was no political pressure to put their own national interest first. (Plus they still REMEMBERED that nations putting their own interests first led directly to the Great Depression.)
They had the will and wisdom to push through what was right, what was good for everybody.
Today, that's not the case. America is in a dire economic strait and has all the moral authority of Mr Russell Brand addressing the Concerned Mothers of America.
And the pressure towards protectionism is high and growing. The cries of "save us! save us!" from the US car dinosaurs are merely the first.
President Elect Barry O wasn't AT the G20 summit, saying "America only has one President at a time". Unfortunately, with the Monkey-in-Chief lamer than a duck that's gone hunting with Darth Cheney, it seems that America doesn't have ANY Presidents at this time.
I think that he SHOULD have been there, if for no more reason than APPEARANCES, but my SUSPICION is that his people and the Monkey-in-Chief's people couldn't come to an agreement that one or other of them would endorse the other's position. Think about it, Barry O is NOT going to continue with the policies of the Monkey-in-Chief; but the Monkey-in-Chief isn't going to take orders from his successor. So Barry CAN'T go the summit because he's going to be thinking he may have to reverse some of the positions that the dying administration takes. And as a consequence, the American government ends up doing NOTHING for three months.
With both China and Saudi Arabia declining the offer to shore up the world economy, we NEED someone to step up to the task of putting the pieces back together again.
Step forward, Mr Frown… oh, maybe not.
What Mr Frown is doing ISN'T leadership.
He took a few PANIC MEASURES and because he took them first, and they looked OK, other people started taking them too. That's not LEADERSHIP, that's just being the first LEMMING in the queue.
What we need is someone to give a BOOT up the fluffy BOTTOM to the Banking sector to get them lending again. A recession is bad enough without perfectly GOOD businesses going to the wall because they just can't get the same credit that they used to. Using the banks that the Government controls (Northern Rock) or soon WILL control (all the others) to DRIVE the market by offering attractive and sensible loans seems a logical place to start.
The irony, of course, is that in the LONG TERM we don't need ONE great big World Bank to save us; we need lots more SMALLER banks, spreading the risk and being closer to their customers so that they better understand the people to whom they are lending. We need to build a new infrastructure that supports SMALL and discourages the sort of massive super-banks and super-corporations that are both impossible to control and unthinkable to let fail.
Mr Frown, with his encouragement for bank MERGERS and increases in CENTRAL Government spending is heading in exactly the WRONG direction.
.
No comments:
Post a Comment