Charles Moore

You cannot blame Lord Turner, the Chairman of the Financial Services Authority, for defending the bonuses paid to his employees. He is new to the job and must work with his team. But when he said this week, ‘If you are saying we should now cut the bonuses, you are saying we should cut their pay by 15 per cent’, he was inviting the reaction he did not intend. Yes, that is, now you mention it, what we are saying. The FSA failed to do the most important job assigned to it. Therefore, broadly speaking, its staff should not only not get bonuses, but should get less money than before. It is a point so simple that it seems to elude the intellectual giants who preside over our financial system.

The case of Caroline Petrie, the nurse suspended for offering to say a prayer for a patient, discloses something of which most people may not have been aware. To work in the National Health Service, it is officially stated, you ‘must demonstrate a personal and professional commitment to equality and diversity’. It is remarkable that there should be a state rule about what you can think (the ‘personal’ commitment) before you can be employed. I also wonder if it is possible to have a commitment to equality and diversity at the same time.

Watching white workers protesting in the snow, I cast my mind back 30 years to the Winter of Discontent. The year 1978/79 is the last time I remember being so cold, and taking such keen pleasure in ‘bad’ weather. It is also the last time that one had a prevailing sense that the country was falling apart. Then, as now, a Labour government whose claim to power was a special ability to deal with difficult economic questions was discredited. There are some differences, though. Thirty years ago, the strikers were much more unreasonable and unpopular than the men in the north today who resent being excluded from British jobs which appear to be reserved for foreigners.

Although television coverage of the Israeli attacks on Gaza is extensive, it is uninformative. The BBC, in particular its reporter Jeremy Bowen, seems to be in thrall to the images it can project. But, by its Charter, the BBC has a duty to educate, and what is missing in so much of the coverage is context. What is Hamas? What does it believe? Why is it not reported that the Arab press carries numerous attacks on Hamas for exposing the Palestinian people to suffering? Why is Hamas, despite being a Sunni organisation, close to Shi’ite Iran? What are the politics of the situation on both sides? Why, in short, is what is happening happening?

John Milton is 400 years old this month, and there is justified lamentation that nobody reads him for pleasure. Although Milton is renowned for his learning and complexity, he was also the master of simplicity. Almost my earliest memory of poetry of any kind is singing Milton’s version of Psalm 136 at my kindergarten. ‘Let us with a gladsome mind/ Praise the Lord, for he is kind’, it begins. I liked it, aged four or five, because of its depiction of nature — the ‘golden-tressèd sun’, ‘the hornèd moon that shines by night,/Mid her spangled sisters bright’.

In his speech announcing his Pre-Budget Report, Alistair Darling said that he was going to put up the top rate of income tax to 45 per cent from 2011, because he wanted the burden to be borne by ‘those who have done best out of the growth of the past decade’. In his speech announcing his Pre-Budget Report, Alistair Darling said that he was going to put up the top rate of income tax to 45 per cent from 2011, because he wanted the burden to be borne by ‘those who have done best out of the growth of the past decade’. This was not only, as many have said, an abandonment of a New Labour article of faith about tax rates: it was also an admission that the past ten years have not worked.

It is so important that the first black President is only half-black. The black side of Barack Obama’s heritage is the non-American bit. His black, Kenyan father was absent. His Hawaiian upbringing was white. One day, he recalls in his autobiography, his white grandparents, who were bringing him up, had a row. His grandmother (who died this week, just too soon to see her grandson elected), told her husband that she did not want to take the bus to work the next day. She asked her husband to drive her instead. He refused, and words were exchanged. Barack asked what was going on. His grandfather told him that she had been harassed at the bus-stop for money.

What would happen if you or I or telephoned an old man we did not know and left a message on his answering machine saying that one of us had ‘f—–ed’ his grand-daughter? What would happen if we then left three more messages, joking about her menstruation and imitating his voice as, in our imagination, he said he would kill himself because of the shame? What if our messages pointed out that most grandparents have pictures of their nine-year-old grandchildren by the telephone on a swing and then went on to say that one of us had ‘enjoyed’ his grand-daughter in that position? What would happen if we also shouted into the answering machine ‘I’ll kill you!

Nearly 20 years ago, after the Tiananmen Square massacres, The Spectator campaigned for all Hong Kong people to be given British passports. Part of our argument was that, if they all had the passports, very few of them would want to come here: they would have the confidence to stay. That, in essence, is the same reasoning that the governments of the Western world are using when they prop up the banks. Banks only lend because they can get their money back, yet if they all try to get their money back, they cannot lend. When they are all terrified, therefore, some external agency has to remove the fear. That external agency has to be government, or governments. I do not see anything very ideological in this.

We all know that everything about money comes down to confidence, but normally, because we have that confidence, we do not think about what this means. Now we must. We have learnt that mighty banks are nothing if customers — and other banks — have no confidence in their assets. Panicked, we turn to governments. Only governments, we believe, can ultimately overcome monetary crises, because only they have control of the printing press. If they ‘stand behind’ our banks, our confidence can be restored. That is why Gordon Brown acted as he did on Wednesday morning. But is this necessarily so?

It is a fascinating feature of this great financial disaster that everyone — or at least everyone sensible — is confused. It is a fascinating feature of this great financial disaster that everyone — or at least everyone sensible — is confused. I do not mean the basic, widespread confusion about terms and processes — about what is short-selling or a derivative, what are monolines, HELOCS, etc. I mean confusion about what is good news and what is bad. Has America nationalised its banks, and if it has, is that good or bad? Was it good to allow Lloyds to swallow HBOS, because it saved the latter, or bad, because it overthrew competition requirements and created moral hazard?

We are in a financial crisis which has been going on for more than a year. It is remarkable that, in all that time, no political leader has had anything much to say about it. In the United States, neither John McCain nor Barack Obama appears to have any understanding of what is going on. Over here, Gordon Brown’s supposed gift for economic analysis seems to have deserted him. One hears phrases like ‘the fundamentals are sound’, and trembles. David Cameron, pursuing the favourite strategy of keeping his party away from bad news, acknowledges the gravity of the situation without proposing remedies.