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In this morning’s speech, David Cameron laid blame for the current state of the UK economy at Gordon Brown’s feet.

Labour a failure: Cameron stated that the Labour government was responsible for the “complete and utter failure” of economic policy and that it has been an “irresponsible government” presiding over a period of “irresponsible capitalism”.

The implication is that the nation is now reaping the results of this policy as we slide into a recession, our financial sectors in tatters – and that this could have been prevented.

Cease support: In the recent days, Conservatives have been seemingly supporting Labour especially in the latter’s bid to work out a bailout package. So much so that one was wondering if the Conversatives have had any of their own thoughts about the economic policy. And, whilst Cameron is now effectlively making a statement that he is ending Conversatives’ support of the current government’s economic measures, one still wonders what exactly is he going to propose that amounts to a solid economic platform that is actually different from the current course.

General noises are being made about tougher regulations, “new measures to rebalance the economy”, and changes to laws. Whilst this is all good and fine, none of these appear novel measures that have not been mentioned before by someone else.

Are Conservatives still struggling to pull it together? On the evidence I see (or shall I say, do not see) today – yes. But so is Labour, really, although at least they have some sort of action plan for now.

Silly Political games: What seems to be happening on both sides is a lot of posturing. Whilst Gordon Brown is savouring the role of the saviour of the world’s financial system, his opponent David Cameron is the homegrown oracle who had seen it all coming and can see right through the incompetencies of the present government – yeah, right. How easy is it to throw stones about, say “I told you so” and then duck for cover – as really you have nothing new to say, Mr Cameron. Come up with some really smart proposal that will tell you apart from other government policymakers, then maybe we’ll put more trust in the Conservatives.

Until then – the usual charade of ceremonial policital repartee continues. Yawn…  

 

Copyright 2008 by CuriouslyInspired

It’s fascinating to see how much everyone around the globe is presently applauding Gordon Brown, the UK’s PM, for coming up with “the plan” to rescue us from the economic meltdown. Features of this plan are now being adopted by other governments in need of a magic wand to get them out of the financial abyss.

UK plans: The plan amounts to the UK Government formally taking a stake in UK’s banks whilst giving them money (£37bn to three named banks – RBS, Lloyds and HBOS) to recapitalise and hence become more resistant to the current market volatility and the ongoing liquidity crisis.

This was received exceptionally well by the world’s markets. FTSE 100 is positively rocketing upwards – on Friday it closed below 3,900, it now stands at 4,400, up well over 12% in just 2 nerve-wracking days. European and Asian indices are also up very strongly.

US adjust the approach: US’s bailout package of $700bn, which was originally intended just to buy off bad debts off failed banks, was badly received by the markets earlier in October and failed to stem the fall of american indices which dragged the world’s markets down with it. Now the US government is turning towards the UK-style idea and is planning to recapitalise 9 banks (amongst them Goldmans and Morgan Stanley) using $250bn of the bailout pack for this.

This will be deeply humiliating to Goldmans and Morgan Stanley which until now have been the last 2 “pure” investment banks left on Wall Street. Goldmans, in particular, was initially trying to raise its own capital to ensure its survival, whilst Morgan Stanley was looking for a merger. I wrote about that earlier in Sept.

US markets strongly welcomed US’s change in thinking on the rescue plan and Dow Jones is finally on the up.

Knight in shining armour? Gordon Brown is getting credited for coming up with the plan that is going to work, where all else failed to date. Paul Krugman who got awarded the Nobel prize for economics, has been praizing Mr Brown as the one who might have saved the world’s financial system: more details here.

But we must not forget, before we get carried away on the sudden euphoric wave, that:

  • Gordon Brown failed to prevent UK entering the credit spending spree in the first place, creating conditions for a very sharp comedown to earth which are only starting to bite now
  • He failed to get the regulators involved when alarm bells have been ringing for months as banks were increasingly entrenched in runaway activities which were hardly regulated

And thus we must consider Gordon Brown’s achievements and undoubted strong leadership skills in the last few days in light of the fact that really, we should not have been here in the first place.

What is always impressive is the well-oiled Labour spin machine which helps Mr Brown deliver his recent “save the banking world” speeches so very well. UK is newly rebranded as “rock of stability and fairness”. The stuff that would normally make one cringe was swallowed by this week’s hungry for reassurance markets, hook line and sinker.

A very bitter pill: As for the bailout itself –  no-one likes the sound of it. In fact we all loathe the sound of it. And I for one thought in the last month, just let these banks fail, as “damned if you do, damned if you don’t” – bailout or not bailout – it will hurt in both cases. But economic tools and alternatives being rather thin on the ground, I agree with some of my recent commentators, I have come round to semi-accepting the inevitability of this bailout. This is mainly because everything else I have seen suggested would have implied an HUGE social and economic upheaval. Like write off everyone’s debt and assets, for instance.

What this means is that as the world’s order is shifting towards quasi-socialist principles and a very strong government hand in regulation, we are not trying to shake the foundations of the existing society. Call me a coward but I don’t feel there is a call for that at this stage.

Yet from the UK’s point of view, it is extremely disappointing to see Gordon Brown take so much credit for an event that he did not manage to prevent.

 

Copyright 2008 by CuriouslyInspired

Gordon Brown decided to bring Peter Mendelson back to join the Government as business secretary. Oh dear. Quoting John McDonnel, a left wing Labour MP:

This is an extraordinary step backwards into the worst elements of the Blair era, to reinstate possibly the most divisive figure in Labour’s recent history 

So an interesting choice from Mr Brown. Apparently the move to bring Mr Mendelson back is expected to unite the Labour party stopping the division into Blairites and Brownites. We can see that this is bound to work, right?!

As the BBC reminds us, Mr Mendelson already left the government twice before in disgrace – “once over a loan from his ministerial colleague Geoffrey Robinson” (failure to disclose a £373K loan from another minister) “and once over allegations of misconduct over a passport application for the Hinduja brothers. An inquiry later cleared him of wrongdoing over the Hinduja affair”.

So Mr Mendelson, the corrupt-but-rehabilitated-by-Blair former spinmaster of Labour, is here again. One only wonders that Mr Brown does not care for public opinion on his newly appointed cabinet figures. Or is he on a self-destruct course?

Tried and tested and squeaky clean politicians, anyone?

Fantastic! A local council in Birmingham has found a fantastic way to better integrate Muslims into the UK society. Amongst other projects, they chose to allocate government money towards printing dozens of slogan T-shirts with “I love Islam” on them.

The money was made available by the governement to generally help improve Muslim integration and was allocated to various local councils that later chose schemes of their own to invest it in.

What an inspired solution. Surely T-shirts will put everyone’s minds at ease immediately, stop all the worries about UK’s tolerance towards Muslims, and make all Muslims feel right at home. And possibly also somehow resolve any threats of global terrorism.

T-shirt modelling: A bit unclear as to who the intended fashion models of these would be? Council heads perhaps – to demonstrate their full committment to resolving inter-cultural problems?

How about this though. At the root of the current increased tension between UK cultures lie religious tensions aggravated by the fact that UK invaded Iraq following US’s lead.

Surely the solution would be for UK to stop meddling in the Middle East, something Britain has been doing for decades, and withdraw from Iraq and Afganistan? Ah, yes, I keep forgetting that the US-UK invasion has caused a fine mess there so leaving now is not really an option. Hmm. Not an easy one is it folks?

How about this then: Acknowledge that religious intolerance is the critical contributor to the world’s conflicts, and work to solve that – not waste money on T-shirts. Which means: (A) educate kids in a more liberal way, don’t let them be indoctrinated into religion from an early age when they are most susceptible, and let them decide for themselves whether they want to have faith or be atheist; and (B) look into the reasons why fundamentalism is taking a stronger hold in communities at this stage, and work on the root causes.

The current policy of giving money to random hare-brain schemes to promote “better intercultural integration” just feels like a random knee-jerk reaction and shows the British government, and the local authorities, have not got the finger on the pulse. Tell me something I did not know before…

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