Simmering Away

I've been trying to avoid commenting on matters financial of late. After all, who could not be chilled to the marrow, indeed disgusted to the very core of their being, at recent disclosures on remuneration? What could be more galling than seeing an individual who helped precipitate the collapse of some of our best known financial institutions being able to walk away with a gold-plated pension scheme, tacitly approved by government and bankrolled by the same taxpayers who will be left to sweep up the resulting economic carnage left in his wake?

It's absolutely disgusting, and frankly, no matter what the law says, someone should intervene to stop it. But that's probably enough for now about Gordon Brown's future pension arrangements. There's bigger issues to concern us, after all.

A post about the politics of the financial crisis has been brewing for a while, but every time I've sat down to do it, somehow I've just got so far and stopped. I think that's largely because I've found it hard to adequately express my distaste at the sheer neck demonstrated by senior figures in the Labour Party in pointing the finger of blame at everyone but themselves.

That's not to deny the trans-national nature of the present situation – far from it. However, with the whole 'it started in America' meme, alongside the depiction of Scotland and the so-called 'Arc of Insolvency' - effectively using British weakness and failure as a justification for the constitutional status quo - sometimes, there just isn't enough Brasso in the world to go around.

You can say what you like about Fred Goodwin and let's face it, many have done exactly that over the past week. However, there's something deeply hypocritical about the way Labour has tried to scapegoat bankers in general and Mr Goodwin in particular as a diversion from the bigger picture. After all, capital is amoral - in going on the acquisition trail and in lending freely in the mortgage and unsecured debt markets, bankers only did what they were allowed to get away with by the regulators.

During the resulting growth and profits spree, the Labour Government was happy to hoover up the corporation tax receipts. The consumer debt boom went on buying up imported goods and in fuelling an unsustainable housing bubble. Meanwhile, huge public spending increases seemed to disappear to little discernible effect, with billions squandered on the dripping roast of PFI.

Even before 1997, Labour was keen to get in with the City. In one of his first acts as Chancellor, Brown tore up the old model of discrete regulation by the Bank of England, only to replace it with prescriptive box-ticking and a glossy brochure industry. He crowed about new models of regulation and harangued others for not following suit. Sadly for us, Brown's 'light touch' also meant soft touch. With responsibilities blurred and with few having the understanding or the ability to adequately quantify risk, the dangers grew. Armed with the twin mantras that 'boom and bust' had been abolished and that we were only 'borrowing to invest', Broontania marched fearlessly toward the guns.

Ah, but Brown led the world in responding to the crisis, bleat the apologists. Even Paul Krugman entered the fray, much to the delight of the Brownies. Well sorry, but not even a Nobel Prize in economics offers a guarantee against talking nonsense periodically.

Let's examine the evidence - in response to the banking crisis, Brown had the opportunity to lead when Northern Rock failed. However, instead of allowing a private sector takeover by Lloyds TSB, Brown dithered for 6 months before opting for nationalisation, on the grounds that allowing for a takeover on a weekend was anti-competitive. Compare and contrast this with the swift and decisive manner in which the US Government allowed Bear Stearns to be taken over and through the swift recapitalisation of insurer AIG.

When it came to liquidity, the Bank of England reacted more slowly than the Fed or the ECB. In guaranteeing deposits, Gordon Brown trailed behind the much sneered at Irish. On stimulus, he was also well behind many other major economies, and as Eddie George says, Brown's earlier borrowing ultimately left little room for stimulus, with the eventual package representing 1% of GDP as opposed to the USA's 5%.

Brown's Labour has been behind the curve on every major response to the crisis, yet still the courtiers preen and posture in spite of this. While the Tories have been attacked with the idiotic 'do nothing' line in England, understandably, it's been the SNP which has born the brunt of Labour's ire in Scotland. After breaking their own call for unity late last year, they launched a series of attacks on the Scottish Government for not acting on matters where it has, by Labour’s own design, little powers anyway.

Whether it's spurious attacks on jobs or investment, the Labour line has been simple – just leave the complicated economy stuff to the big boys in London – they know what they're doing and anyway, youse could never afford a national debt like ours. Meanwhile, Labour's Scottish spokespeople exhibit prolier-than-thou cretinism, trying to associate real world experience outside politics with ideological unsoundness and the sort of cosiness with the financial sector which Brown himself was only too keen to cultivate over the previous 2 decades. Whether it's over paintings or political 'pedigree', the game has been, however implausible it appears in reality, to try and somehow pretend to be on the side of the people.

The less said about Iain Davidson's foray into the art world the better. However, with his acceptance speech as Leader of the Labour group in Holyrood, Ian Grey managed to make a life lived well sound less like a principled set of career choices in service of his fellow man, and more like an extended penance to exorcise repressed middle class guilt. It's like being back in the students union – an experience hardly dissipated by a Secretary of State and Holyrood party spinners steeped in the swamp of NUS/Labour Students politicking.

In the much-vaunted 'court of public opinion', the verdict is that Brown's is a government which has lost all direction or semblence of coherence. It is pitifully, woefully, even dangerously out of its depth. It is devoid of ideas, denuded of principle, absent even of endearing personalities. In Scotland, it has long since ceased to be a Labour party and is now simply the anti-SNP party, infected with the canker-ridden sourness of temper tantrums that flow from someone having ‘stolen’ their sweetie.

Somewhere in the 80's or 90's and we can no doubt all point to different dates or events, the Labour Party became solely about the pursuit and retention of power. Entrenched in swathes of Scotland on a minority share of the vote by the first past the post system, there was no competition to drive out the cliquishness, clannishness and petty rent seeking which came to scar it. Swept out of office in 2007 and with municipal power bases weakened by the plurality of PR, it found itself unable to distribute patronage as it once had.

Without economic credibility, Labour in England has lost its reason for being in power. Without power and patronage, Scottish Labour lost its reason for being a long time before.

A Big Hello

to the recent flurry of surfers from Iceland. You'll no doubt be delighted to know that this is a place where you will not be considered terrorists...


http://www.indefence.is/Home

Iceland Helps Keep UK Pensioners Warm

Incredible, but true. From the National Pensioners Convention website:

Icelanders offer help to UK's fuel poor pensioners -

Icelandic Wool to England Project

A container filled with jumpers, socks and blankets - destined for Britain's fuel poor pensioners - will arrive at Grimsby on 26 January, following an appeal from listeners to a popular morning radio programme in Iceland, called Bitid.

The charitable appeal - called 'Icelandic Wool to England' (Islensk Ull til Englands) - started after the programme's hosts, Heimir Karlsson and Kolbrun Bjornsdottir, covered a story featuring Britain's National Pensioners Convention (NPC), and their warning that up to 1 in 12 pensioners may die this winter due to the drop in temperature.

Mr Karlsson interviewed an Icelander, Njall Hardarson, now living in Manchester, who explained the problems faced by many older people in Britain. The response from listeners prompted the idea of collecting garments made from unique Icelandic wool and shipping them to pensioners who are struggling to pay their fuel bills and keep warm in the current cold spell. A large freight company, Samskip, offered to ship the garments over and other businesses offered bags and boxes for packing.

The Icelandic organisers hope to formally hand over the garments at the end of next week to a charity of welfare organisation in the city of Hull (twinned with Reykjavik) to distribute to local pensioners.

NPC spokesperson, Neil Duncan-Jordan said: "This is a fantastic and generous act of compassion from the people of Iceland, particularly at a time when their own economic situation is extremely difficult. But it is also a shocking indictment of the UK government's complete inability to properly tackle the problem of winter deaths amongst older people.”

“In the last decade we have lost 260,000 pensioners during the winter months and the response from Whitehall has been a deafening silence. We hope this act of kindness will shame the government into raising the state pension and the winter fuel allowance so that pensioners have the confidence to turn on the heating when they need it without the fear of what it might cost."

Icelandic broadcaster, Heimir Karlsson, who helped organise the appeal said: "When we broadcast the story that UK pensioners were dying from the cold, our listeners could not believe their own ears. We decided to give the Icelandic nation four days to fill a 20ft container of pure Icelandic wool for the pensioners in Britain. Families, some from far away, came one after another with garments to fill the container. Some of the sweaters were brand new. One 9 year old girl gathered 37 beautiful sweaters and delivered it to us at the radio station."

"I am sure I speak on behalf of every living soul in Iceland when I say that we looked at it with an utter dismay and total disbelief, how badly the government of the United Kingdom treats its old people. The elderly deserve to live their last years enjoying the best of care. They deserve to live in warm housing, free from worries over cold and rising gas bills. The Icelandic people heard about how terribly the UK government treats the pensioners, and could not just do nothing about it!"

NOTE TO EDITORS

• The Icelandic radio station which broadcasts the Bitid programme is called Bylgjan
• The container will arrive on 26 January at the port at Immingham, Grimsby, Lincs

FUEL POVERTY FACTS

• 25,300 older people in England and Wales died of cold related illnesses between December 2007 and March 2008. This represents a seven per cent increase on last year’s figure of 23,740.
• Nearly 90 per cent of all excess winter deaths are of people over the age of 65.
• Almost one in three older people live in homes with inadequate heating or insulation making their homes more difficult to heat and/or keep warm.
• One in three pensioner households are classed as living in fuel poverty.
• Average annual energy bills now exceed £1,000. This will absorb 16 per cent of the income of a single pensioner dependent on the pension credit minimum guarantee and the current £250 Winter Fuel Payment.
• When the winter fuel allowance was first introduced, it covered about a third of the average energy bill. Now it covers less than a fifth.

See also here and here.

"But Flash! We've Only Got 14 Hours to Save The Earth!"

There you have it. Of all the phrases to stumble over at PMQ's, Gordon Brown managed it when trying to say "We not only saved the world..... [Hon members: Uprorious laughter] We not only saved the world's banking system..."

Sometimes, those Parliamentary sketches just write themselves!

UPDATE: Via Guido, here's someone else's grab of events from YouTube:
UPDATE 2: An interview with the German Finance Minister, Peer Steinbrück, in Newsweek. Explosive stuff...