Friday, September 19, 2008

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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