« Democracy, religion and happiness | Main | The ABN Amro "mistake" »

February 10, 2009

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

kinglear

Of course it should - but as he never had any principles beyond getting into power, no clue about economics, or markets, or trade, or indeed human nature, you can hardly expect him to do so.

Darkling

While doing so, apparently managed to demonstrate what looked like all the right principles: http://imomus.livejournal.com/229305.html

passer by

NuLab are the product of catholic Collectivism, which at its core is corporatism, you should not be surprised at the consequences.

ash

If he has any sense, his anger should be based not upon the fact that bankers are greedy, but rather that they have shown up New Labour’s ideology for the sham that it is.
>>>

The New Labour project was about distribution of wealth. Its unintended consequence is the above average Government debt.

D iversity

"Mr Brown is not personally attracted to wealth but he is politically in awe of the wealthy."

A sentence that illuminates; with the 'not'and the 'but' to distinguish Brown from other New Labour figures,

Bob B

"but as [Gordon Brown] never had any principles beyond getting into power, no clue about economics, or markets, or trade . . "

The truly terrifying prospect is the many indications that Cameron and Osborn are also economic illiterates.

Cameron was absolutely confident by the beginning of January that the VAT cut has not worked and would not work, never mind that the fiscal stimulus of the Pre-Budget Report could easily turn out to be far too modest to turn the economy around and that business activity would be even worse without the VAT cut.

It usually takes professional economists time and lots of hard analytical work to evaluate the consequences of a fiscal policy change when many other factors are changing simultaneously, not least because of challenges in modelling the counter-factual - what would have happened in the absence of the policy change.

George Osborn described the modest fiscal stimulus of c. $30bn in the Pre-Budget Report as "fiscal insanity." I wonder how he will describe the $800bn fiscal stimulus of the Obama administration going through Congress if he ever gets to meet with Tim Geitner, the US Treasury Secretary, or Larry Summers, the Director of the Economic Council in the White House?

In the news: "A former HBOS executive claimed today he was fired after raising concerns that the bank was exposing itself to too much risk. . . In written evidence to the Treasury Select Committee, he insisted the current crisis could have been avoided if there had been adequate systems to hold bank chiefs in check."
http://www.independent.co.uk/news/business/news/dismissed-executive-warned-hbos-of-risk-1606036.html

Btw I didn't vote in the 2005 general election out of disgust with all mainstream parties so I'm not grinding axes on behalf of New Labour.

ash

"Mr Brown is not personally attracted to wealth but he is politically in awe of the wealthy."

A sentence that illuminates; with the 'not'and the 'but' to distinguish Brown from other New Labour figures,
------

I agree that Mr Brown differs from his colleagues with regards to matter of wealth.

is Mr Brown politically in awe of the wealthy or personally in awe of them?


If it is the latter, then he is in awe of wealth becuase he thinks that to have wealth is an extraordinary achievement. That though says more about his own difficulties in this area than other people's abilities.

ad

"Gordon Brown is said to be “very angry” about bankers’ bonuses."

Personally I am more annoyed at having to bail the industry out for its own mistakes. How do we avoid the need to do that the next time it screws up?

"Shouldn’t some of Brown’s anger, therefore, be directed towards himself, because bankers have shown that he was wrong to have such faith in them?"

If he is a normal person, that thought will make him even more angry with the bankers...

dearieme

Suppose you were an old-fashioned Socialist, knowing that all man's problems could be cured by a wave of a materialist, magic wand. Call it nationalisation, say. Then the Berlin Wall falls, and the Socialist Economies are revealed to be the middens that more sensible folk had always known them to be. Where now to turn? It must be materialist, mind, and be compatible with top-down, centralised power. Deep defects of intellect and character don't vanish just because Socialism is exposed as a fool's creed.

Glenn

Aye, Gordon's f*ck*d it up in those respects, but all politicians suck up to the wealthy business elite with perhaps the exception of Hugo Chavez and Vladimir Putin.

Would you rather have someone with a smidgeon of decency sucking up to the priveliged city types; or would you rather the country is run by those same city types (i.e. the nasty party)!!?!!?!?

Gordon's been close to the city and has involved some top bods in the recovery plan etc. So it has its benefits, if any of it works.

You don't need to know owt about a subject to make major decisions about it - just look at MPs, ministers etc!

I must say I am struck by the total absence of George Osborne - he's said f*ck all I can remember in the past 6 months. Surely he's a lame duck shadow chancellor?

I'd like to see Gordon B get angry with himself... maybe beating up a mini-me Gordon...

Bob B

Try Philip Stevens in Tuesday's Financial Times on: It is time bankers behaved like bankers:
http://www.ft.com/cms/s/0/d23e031c-f6ea-11dd-8a1f-0000779fd2ac.html?nclick_check=1

As quoted therein, for once even George Osborn talks sense: The days have gone when bankers could routinely pay themselves 20 times more than heart surgeons.

So much for the consequences of Free Market Capitalism.

David Cameron needs to reflect on that old American folksy saying:

It ain't what a man doesn't know that makes him ignorant - it's what he knows that ain't so.

ash

"If he is a normal person, that thought will make him even more angry with the bankers..."

yes , quite.

Charles

I so agree with your comments. Wanless was picked by Brown to write the NHS report, which Brown then used as "intellectual justification" to inject £50 billion into the NHS, that has subsequently disappeared into a black hole, proving that you cannot solve a problem by throwing money at it, Sir Derek ! Wanless, of course, history now teaches us, knew even less about the NHS than he did about Banking. He was ousted from NatWest before he wrote his NHS 'gimmee, gimmee, gimmee' report, and, for good measure, was ousted again from Northern Rock, after signing off his report. In the case of Northern Rock Wanless, was deemed highly culpable by the All Party Treasury Select Committee. Of course, none of this prevented Wanless getting his Knighthood at the behest of Brown. Wanless now sits on Brown's Board for Actuarial Standards. Somewhat awkwardly I imagine, given that he was culpable in Northern Rock's actuarial faux pas of the grandest order. Then, we have Sir Fred Goodwin, also Knighted at the behest of Brown for 'Services to Banking'. The folly of these two Knights of the Realm has cost this country's taxpayers £billions, and decimated the City of London's goodwill value. Now we hear that Sir James Crosby, another of Brown's Knighted chums, sacked the Head of Risk at HBOS for, we are told, daring to voice reservations about HBOS's expansionist plans. It all beggars belief. What a fractured and unfair society we have become. The plutocratic minority are like blood bloated ticks, feeding on the lifeblood of the proletarian masses,and spreading their financial plague. I suppose it was ever thus !

Bob B

"The plutocratic minority are like blood bloated ticks, feeding on the lifeblood of the proletarian masses,and spreading their financial plague. I suppose it was ever thus !"

Just about.

“The prize must surely go to the unknown soul who started ‘A Company for carrying on undertaking of great advantage, but nobody knows what it is.’ The prospectus promised unheard of rewards. At nine o’clock in the morning, when the subscription books opened, crowds of people from all walks of life practically beat down the door in an effort to subscribe. Within five hours a thousand investors handed over their money for shares in the company. Not being greedy himself, the promoter promptly closed up shop and set off for the Continent. He was never heard of again.”

From Burton Malkiel: A Random Walk Down Wall Street, on the South Sea Bubble of 1720:

Bob B

More illumination on the South Sea Bubble of 1720 by two distinguished economic historians:

Peter Temin and Hans-Joachim Voth: Riding the South Sea Bubble

"This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare’s Bank, a fledgling West End London bank, knew that a bubble was in progress and nonetheless invested in the stock: it was profitable to 'ride the bubble.'"
http://www.crei.cat/people/voth/pdf_files/voth%20and%20temin%20aer%202004.pdf

Matt Grist

What is of interest perhaps is the underlying tendency to reductionism - to thinking bankers, for example, can solve all problems. Read about this here: http://thesocialbrain.wordpress.com/2009/02/11/browns-bankers-and-fear-of-complexity/

Bob B

The apt observation from GBS: "The professions are a conspiracy against the laity," used to get quoted more often but it is probably seen as too politically incorrect nowadays and, besides, GBS has become unfashionable lately, perhaps because of the collapse of the Soviet Union and the shrinking of Socialist aspirations.

It would be a mistake IMO to suggest bankers are especially given to arrogant disregard of cautionary advice or prone to ignoring best practice procedures in risk management for mindless pursuit of profit.

It's just that the consequences of bad banking practices can extend to economic catastrophe on a global scale whereas the consequences of bad decisions by other professions are often more private or get covered up:

"Thousands of patients are the victims of medical errors that could have been avoided if safety was given a higher priority in the NHS, the health watchdog has warned."
http://www.telegraph.co.uk/health/3702222/Thousands-of-NHS-patients-suffer-avoidable-medical-errors-says-Healthcare-Commission.html

And btw has the medical profession finally made up its collective mind on whether it's safe to eat an egg a day?

Gordon Brown's hubris in claiming to have been abolished "boom and bust" has been properly remarked on. But we tend to forget just why that implied promise was so very popular.

The fact is that some subjects are inherently complex, which could help to explain why economists tend to be relatively highly paid:
http://www.timesonline.co.uk/tol/life_and_style/education/good_university_guide/article2253011.ece

It is illuminating IMO to know that of the four sometime bank chairmen and CEOs who were so apologetic yesterday, none had formal banking qualifications.

Bob B

Another puzzle: how come the boards of directors - and the shareholders - of RBS and HBOS were sooo complacent about the appointment of chairmen and CEOs who had no formal banking qualifications?

dirigible

"The New Labour project was about distribution of wealth."

To private interests.

BenP

"Deep defects of intellect and character don't vanish just because Socialism is exposed as a fool's creed."

Try "Deep defects of intellect and character don't vanish just because Capitalism is exposed as a fool's creed."

We'll let you know how Socialism works out.

The comments to this entry are closed.

blogs I like

Why S&M?

Blog powered by Typepad