Only A Disguise Will Stop Public Ridicule

Two million on the dole, a home secretary fiddling expenses, Brown sucking up to City pals refusing to budge on bonuses while his favourite banker is fingered for sacking a whistleblower, the country in deep recession. Who'd want to be seen as a New Labour MP? 

Public anger over bankers, jobs and the government's economic mess is turning to ridicule but ministers still bury their heads in the sand.

Today Bank of England governor, Mervyn King, told voters what they can see and feel all around them -  the UK is facing a deep recession. It's a sorry state of affairs but unlike the greedy bankers, no-one in government has the guts to say sorry.

Blair's ex-deputy, John Prescott's on-line battle of the bonuses may be capturing the mood of the nation but more importantly it's reflecting the anger and frustration of backbench Labour MPs. 

Brown needs to get a grip and stop the dithering. Just say what everyone wants to hear - bonuses must be scrapped when the taxpayer is a shareholder in any bank. 

He won't because he can't. The whole New Labour project was based on the fundamental flaw of sucking up to the City to keep them sweet and the government in power. 

Labour's born-again working-class hero, Prescott, was happy to go along for the ride if that meant power and glory. Those days are long gone. Now voters are deserting in droves and Tories and LibDems can outflank the government when the public's on their side. 

The sorry sight of the former bankers' mumbled and staged outburst of remorse before the commons treasury committee left voters cold. 

The Orange Party dozed off watching a pointless and carefully managed PR charade unfold but woke when the finger pointed at Brown, as three of the four guilty men lorded it up with their Ks and Ps on full view - all thanks to their government pals. Failure now brought ample rewards in the past. 

But it's Brown's close ties with his knighted economic advisor, Sir James Crosby, which struck at the heart of the problem, when former HBOS head of risk, Paul Moore revealed he was fired by Crosby, then the bank's CEO, after repeatedly warning about the bleedin' obvious. 

On top of all that unemployment is at a monumental high since New Labour grabbed power and two homes Smith is praying her homes scam will go away before it blows the lid off government sleaze and corruption. 

Today at PMQs Cameron has a chance on so many fronts to prove that he really is the true Mr Angry and Brown's reported "anger" is just part of the Downing Street spin. 

So what can New Labour MPs do? Backbench MP, Frank Field, has an answer: "This anger is likely to be such that the only way that Labour MPs will be able to go out in public will be in heavy disguise - such will be the public ridicule."

UPDATE 11.46am: Brown's buddy, Sir James Crosby, has quit as deputy chairman of the useless Financial Services Authority, just minutes before Cameron could get really angry, during PMQs. Did he jump or was he pushed?

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Brown Must Shoulder Blame For Economy Mess

The distaste for the lies, spin and deceit of the New Labour government, particularly over its smoke and mirrors handling of the economy and who is to blame for the current financial mess, has been highlighted here on a number of occasions. We are living in economic cloud cuckoo land.

Time and again Brown and the cabinet, who just toe the line, hide behind the only excuse they have and blame the global economy for all our ills. 

That neatly side-steps the reasons why we've got in the mess in the first place but no-one is fooled. 

What exactly was 'global' about Northern Rock or HBOS? The only global factor here was when the borrowing and lending model built on greed and fat profits came unstuck, because the global markets refused to prop them up and lend them any more cash.

It's all part of a deeper malaise created by the government's 'light touch' and the spin and hype over a 'strong' economy. 

As observed before, this light-touch has created a soft-touch Britain. This has left the fat cats in the City getting richer and the poor getting poorer.

Fear has gripped the financial markets in a selling frenzy, after years of been driven by greed and fat profits. But behind the scenes, it has been Brown, presiding first as chancellor and the government with its light-touch over any kind of regulation, which has caused the problem.

Jeff Randall in today's Daily Telegraph puts it well:

"There’s no contrition, no admission of fallibility, no recognition of blunders – and most certainly no apology. This isn’t clever. It insults the electorate’s intelligence and helps explain why, like AIG, he’s doomed."

To talk about the current economic mess, as if it suddenly popped up out of nowhere, is quite unbelievable. For more than ten years, the goverment has presided over a 'light touch' economy with little will or effort at regulation and that is at the centre of why the government is to blame. 

There has simply been no regulation of the money lenders. But it kept the crooks and the spivs in the City very happy. 

Richard Brooks, writing in The First Post, is much more insightful. He charts the reason for this lack of regulation from the late 1990s and in particular the useless and toothless Financial Services Authority (FSA). Brooks concludes:

"Brown’s light touch turned into a decade of leaving ever more avaricious bankers to their own devices."

There's talk now from Brown and the government of tougher regulation. No one, particularly the voters, are taken in by this. 

Once again with Brown, it is too little too late and that seems to be the watchword of the government. Too late shutting the stable door now, old pal, the horse has well and truly bolted. 

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Mac And Mae Rock Rot Sets In

Bush has done a Brown and bailed out Freddie and Fannie. This is not about economics, this is about greed. Here, ours had the solid-sounding name of Northern Rock. But the names disguise the festering financial fiasco beneath all of them. 

The banks should never have been allowed to get in the mess in the first place.

Taxpayers are propping up Northern Rock to the tune of ten of billions of pounds. The US always does things bigger. Fannie May and Freddie Mac have liabilities running into hundreds of billions of dollars.

The sub-prime mortgage model started in the US and, like many things, the government was happy to import it, warts and all.

What has happened is the result of a flawed borrowing model, only concerned with making a fast buck.

Out went the traditional checks, where borrowing depended on solid factors like income and how much cash the lenders actually had in the bank. In came the model which simply assessed risk, lent accordingly and bundled off the more risky bond debts to be sold on. 

Fine, if money's freely available. But not when the Middle and Far East banks, which held the bond debt, took a look and decided to withdraw their investment.

Here the treasury, Bank of England and Financial Services Authority sat back, let it all happen and blamed each other when it all went pear-shaped. In the US the same questions will be asked and the future is unclear and uncertain. 

Economic analysists are quick to call it all the result of a mythical "credit crunch", when it's nothing of the sort. It's a deliberately created debt culture. 

On both sides of the Atlantic, people were lulled into a false sense of security and allowed to borrow up to the hilt and beyond. 

Mortgages became loans and were started on fixed, short-term, cheaper rates for just a couple of years, to hook in the customers. The repercussions are repossessions. And spiralling debt.

The Wall Street Journal notes how Fannie and Freddie expanded their exposure to the more risky loans, despite executives warning of the consequences two years ago. 

The two companies "shunned the riskiest type of mortgages, only to embrace those mortgages late in the game in an effort to regain market share from Wall Street rivals."

The winners from this cheap credit for all, were the lenders, who made fat profits. And the losers? Everyone else.

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Heads Should Roll In Rock Scandal

Calls for legal action against Northern Rock directors doesn't go far enough. Members of financial watchdog, the FSA and government ministers who just sat back and allowed the whole sorry mess to happen, should be forced to quit in shame. 

The scandal is beginning to unravel, with a staggering half a billion pounds loss announced by the now nationalised Northern Rock and £3 billion of taxpayers cash to be pumped in to shore up the company.

The bank and building society's big wheeze to make a fat profit from mortgages and loans started years ago.

The government, Bank of England and the FSA turned a blind eye, while the money lenders changed the way they dished out the money. 

Instead of traditional financial checks on income and what you could afford, they switched to a risk assessment. 

Anyone could have a mortgage. The risks were bundled up and sold off. Big profits all around. Until the money to buy the bundled debt dried up. 

Northern Rock had given loans worth as much as 125% of home values, to some customers. 

But Northern Rock was just the tip of this iceberg. The financial mess was about to go pear-shaped. 

LibDem, Vincent Cable, has called for legal action against the private directors and warned the £3 billion of taxpayers' money is at risk.

The Rock also revealed customers in arrears and being repossessed, had risen sharply. Last week it announced 1,300 jobs were to go.

It was all an accident waiting to happen leaving taxpayers, now to cough up, pay for the greed and clear up the mess.

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