Economy

Friday

Fraser Nelson

Brown’s legacy of inequality, poverty and joblessness

We all know Labour has failed to run an efficient economy or public services, but what’s little discussed is its failure to achieve even its own goals. Had Brown bankrupted the country but, say, made the poorest much better off, then Labour members might not be facing such an existential crisis. As it stands they won three victories, trebled health spending, redistributed some £1.5 trillion – and will end up with a society even more ‘unequal’ than it ever was under Thatcher. I look at this in my column today, and thought I’d share a few of the points with CoffeeHousers. First, equality. This (rather than making the poor better off) is the great leftist goal – and it can be nominally achieved by hurting the rich.

Thursday

Peter Hoskin

There could be a pay freeze, after all

Over at the FT's Westminster blog, Jim Pickard picks up on an important comment from Stephen Timms, the Treasury minister, speaking at a committee meeting this morning.  Timms suggests that Treasury hasn't ruled out a public sector pay freeze, as recommended by the Audit Commission's Steve Bundred.  Here are the minister's words:   “It’s certain the case that our pay policy needs to reflect the wider economic circumstances ... we will be deciding on pay policy over the next few weeks, the policy has got to be fair to people who work in the public sector just as we have to be fair to everybody else. The suggestion by Steve Bundred has made is certainly one we will reflect on but the details on that will be made over the next few weeks.

Wednesday

Andrew Lilico and Helen Thomas

Rules versus discretion

Today's White Paper on financial regulation avoids introducing some unnecessary regulatory changes at the expense of failing to introduce some necessary ones.  In particular, it fails to recognise the abject failure of Gordon Brown's "tripartite" framework, in which prudential supervision of the banks was taken from the Bank of England and given to the FSA. Prudential supervision is the proper task of the central bank, for only if it has oversight of banks can the central bank decide whether they should receive last resort lending when they need it.  Without prudential oversight, the Northern Rock debacle is the likely result, and the fact that we are still debating this the best part of two years into the credit crunch is a sorry indictment of UK policymaking in this period.

Monday

James Forsyth

How important were all those initiatives the government kept announcing?

There was a time when the government seemed to be announcing new measures to get the economy and the banking sector in particular moving again on an almost daily basis. Today, the Wall Street Journal has done a rather good audit of these measures. For instance, in January “the British government created a guarantee program meant to revive the dormant market for asset-backed securities. The program aims to spur purchases of banks' asset-back securities, or bundled consumer loans, by guaranteeing them for buyers. The guarantees were made available in April, but since then, none of the major U.K. banks has issued a security with such a guarantee.” Also, only 13 firms have joined in the government’s £5 billion trade insurance programme.

Peter Hoskin

Brown puts on his gloomy face for the world stage

How peculiar.  After all the economic optimism coming out of government recently, all the talk of recovery by the end of the year, Brown's going to warn that the worst of the recession may be yet to come in his meetings with G8 leaders this week.  The Times has the full story here, but this snippet from the Dear Leader's address in France today gives you the idea: "If we do not take the necessary action now to strengthen the world economy and put in place the conditions for sustainable world growth, we will be confronted with avoidable unemployment for years to come." So does this mean he's losing faith in the "green shoots" strategy, by which a grateful nation will hail him for leading the UK out of recession?  No, I rather suspect not.

Sunday

Fraser Nelson

Pure Balls | 5 July 2009

According to the Sunday Times, poor old Shaun Woodward is getting the blame for inspiring Brown’s mendacious “Labour investment v Tory cuts” line. As if. This is the work of Ed Balls, and his trademark belief that the public can be easily fooled on such issues because their eyes glaze over when you mention statistics. A quick chronology: when the 10 percent figure came out in my Daily Telegraph piece it was Ed Balls who seized on it (his wife did so earlier that day with the Standard) and used it in a letter to Michael Gove demanding where those 10 percent cuts would be made. He used my figure as if it were official Tory policy.

Peter Hoskin

More blows against Brown’s spending narrative

It's public spending time again, dear CoffeeHousers, with a couple of eye-catching articles in  today's papers.  The first is a comment piece by Steve Bundred, chief exec of the Audit Commission, on the necessity for extensive spending cuts.  If you recall, Bundred claimed a few days ago that health and education shouldn't be ring-fenced from cuts, and here he repeats the point, adding a snappy conclusion: "So don't believe the shroud wavers who tell you grannies will die and children starve if spending is cut. They won't. Cuts are inevitable, and perfectly manageable. We should insist on a frank and intelligent debate about how and where they will fall, which will then enable everyone to make more sensible plans.

Thursday

Alex Massie

Pimp My Ride: Amish Style

Actually, this is rather a touching, sad story about the Amish and the impact first rising prosperity and then, of all things, a run on an Amish bank in Indiana. Nonetheless, it seems that the Amish are no more able to resist shiny baubles and status symbols than the rest of us. Plus, the idea of what one might term the Cosmo-Amish and their tricked out buggies is, you know, amusing: Some Amish bishops in Indiana weakened restrictions on the use of telephones. Fax machines became commonplace in Amish-owned businesses. Web sites marketing Amish furniture began to crop up. Although the sites were run by non-Amish third parties, they nevertheless intensified a feeling of competition, says Casper Hochstetler, a 70-year-old Amish bishop who lives in Shipshewana.

Wednesday

Alex Massie

Ireland today, Britain tomorrow

It was Brian Lenihan yesterday and in a fortnight it will be Alistair Darling's turn to announce the bad news when he delivers his emergency-in-all-but name budget. Or bloodget. Lenihan, the Irish finance minister, did his best to spread the pain around, announcing tax increases and cutting spending while leaving many of the most difficult measures to next year's budget. The Irish economy is forecast to contract by 8% this year and, even after the cash-saving and raising measures announced yesterday, the government will run a deficit of 10.75% of GDP. Eye-watering and sobering stuff.  In the Irish Times Mark Hennessy writes: For weeks, the Cabinet has debated the options in detail unlike any previous cabinet. Eventually, it decided that it could not cut more than €3.

Saturday

Martin Bright

The Darling Buds of April

I have stolen the headline to this post from a breakfast discussion held by "reputation management firm" Fishburn Hedges, where I was a guest speaker this week. Me and my fellow panelists were there to talk about the budget  (coming your way on April 22nd) and give some idea of how the media gears up to the great day. I suggested that part of the problem with newspaper Budget coverage is that political journalists know very little about economics. Robert Cole, a senior writer at the Times and the man who has run the paper's Budget coverage for many, many years, explained the excitement of the day and his biggest fear - theat nothing happens. Alistair Smith, who runs the media operation for Barclays explained how the big financial institutions gear up their response.

Friday

Alex Massie

RBS: All fur coat and no knickers

Such is the disrepute into which Scotland's once all-conquering bankers have fallen that the favoured put down at Edinburgh dinner parties these days is "My husband pays your husband's salary". A period of silence on the part of these erstwhile Masters of the Universe would be most welcome. This injunction, it seems, also applies to their spouses. That sound you hear is the noise of a righteous middle-class populism. These are disconcerting, humiliating times to be a Scottish banker. Nowhere is this more keenly felt than at the Royal Bank of Scotland's headquarters at Gogarburn on the western outskirts of Edinburgh. RBS's downfall and subsequent nationalisation-in-all-but-formal-name has made it open season on bankers in Scotland's capital.

Monday

Alex Massie

New American Leadership, Same American Leadership Style: Do As You Are Told.

Times change, of course. It wasn't so long ago that the American left wondered why Democrats in Congress couldn't "stand up" to the Bush administration in the way that, say, France and Germany opposed the American-led War in Iraq. Now that the worm has turned in Washington, of course, everything is different. Why won't those annoying europeans do as they're told? This time it is the failure of Angela Merkel and Nicolas Sarkozy, among others, to endorse the Americans' "solution" to the financial crisis that is irritating pundits in Washington and New York. Hence, Michael Tomasky*: "confidence has never been especially great here in the states that, even with Obama's massive worldwide popularity, European nations would just do what America wants." Oh noes!

Thursday

Alex Massie

Why Germany Won’t Play Ball

It's not just Gordon Brown who wants the rest of europe to splash some cash to get us out of the mess we're in. There are plenty of commentators on the American left - Paul Krugman for one - who also fret that unless european countries join the massive stimulus bandwagon they threaten to delay, or even cancel, everyone's recovery. Enemy number one, obviously, is the Germans. But as Tyler Cowen points out, the Germans might have some good reasons for their reluctance to go on a spending spree. They remember the costs of German unification and can recall how spending massive quantities of money wasn't a magic cure-all then either: The two countries united, lots of money was spent and lots of money was borrowed...The results were less than wonderful.

Wednesday

Alex Massie

The Problem with Working Hard

So El Gordo is in New York today, ostensibly to drum up support for his G20 gabfest. According to the Telegraph's report: At a breakfast for business leaders, Mr Brown said that values such as “honesty, integrity and working hard” may have been absent from the financial system in recent years. One might agree about honesty and integrity but the problem with the financial sector is not that people there abandoned the "value" of "working hard". Quite the contrary. They worked too hard. We might not be in quite this mess if there'd been less hard work and more leisurely lunches and 4pm finishes. Greed and incompetence were problems but so too as a culture that prized, nay demanded, 17 hour work days. That is, long hours and very hard work were part of the problem...

Monday

Alex Massie

A Hungarian Lesson for Gordon Brown

This seems an idea worth copying, doesn't it? Hungary's Prime Minister said today he is resigning because of his government's low popularity amid a worsening financial crisis. Ferenc Gyurcsany, of the ruling Socialists, told the party's congress that he considered himself a hindrance to further economic and social reforms. Alas, I can't imagine Brown being quite this, er, bold or noble.

Thursday

Alex Massie

France’s Spring

People protest during France's second nationwide strike in two months, to demand a boost to wages and greater protection form the crisis, on March 19, 2009, in Marseille, southern France. Photo: GERARD JULIEN/AFP/Getty Images It's springtime which means that even if there weren't an econmic crisis our friends in France would be taking to the streets. This is as it should be. My one year old godson, I'm pleased to say, is already a veteran of street action, having been wheeled out to protest against proposals for primary school reforms. Even rites of passage happen earlier these days. Anyway, the good news for Sarkozy is that the Socialists are in no position to benefit from the public's sour, fretful mood.

Tuesday

Alex Massie

Corporate hari-kiri

Things could be worse for RBS executives. They could be AIG executives receiving advice from Senator Chuck Grassley (R-Iowa): "The first thing that would make me feel a little bit better towards them is if they would follow the Japanese example and come before the American people and take that deep bow and say I’m sorry and then either do one of two things: resign or commit suicide." Grassley added, "In the case of the Japanese, they usually commit suicide before they make any apology." Happily, "An aide later explained he does not actually want executives to kill themselves." Well, that's ok then!

Monday

Alex Massie

Green Jobs? Really?

Could there be anything nicer and popular than "green jobs"? Gordon Brown and Baack Obama has determined that a "green" job - all fresh and wholesome and wrapped in the (endlessly recyclable!) promise of a "sustainable" future - is better than any other kind of job. Including, probably, the one you have right now. Also: Green is the Future. Apparently. To which you might say, "aye right" and your suspicions might not be misplaced. Here's Michael Levi in Slate: Green jobs seem to be an ideal solution. But just because "green" and "jobs" are both in demand doesn't mean that policies focused on creating "green jobs" make sense.

Thursday

Wednesday

Alex Massie

Gordon’s Apology?

Photo: Peter Nicholls/WPA Pool/Getty Images This item from Martin Bright (Welcome, Comrade!) risks leaving one speechless: Now word reaches The Bright Stuff that the man who has never knowingly apologised for anything is preparing his very own "mea culpa". I am told that Whitehall officials have been ordered to make a compilation DVD of Obama's various apologies to the American TV networks to be studied by the Prime Minister. The idea of Gordon Brown practising a humble self-deprecating manner in front of the mirror based on what he has seen on his training DVD doesn't bear thinking about. But then again... maybe it does. So...