Here is an example from the Times columnist Daniel Finkelstein:
'Gordon Brown is enjoying himself so much at the moment that it is sometimes hard to recall whether the aim of the exercise is for him to save the banks or vice versa. But to have to spend billions of pounds of taxpayers money to save the entire British banking system from collapse is an odd sort of triumph,'Daniel Finkelstein is quite rightly critical of the record of Gordon Brown but, as can be seen in the above quote, but is accepting that the UK banking system has been 'saved'. There are two basic problems with this assertion. The first is that it is very, very early days yet, so one must ask on what evidence the system has been 'saved'. The second is to ask at what cost? By this I mean, at what cost to the viability of the wider economy. That second question may be answered in the near future by government default on the debt it has accumulated, and by the costs imposed upon business and consumers to pay for this bailout. It is borrowed money that has 'saved' the system, and that means it must be paid for, and that means the UK economy has new structural costs. These additional costs will, of course, be buried amongst a host of other costs, such that their effects will be hard to strip out and isolate. However, the difficulty of isolating them will not mean that they are not there.
The really dismal part of the news is that Gordon Brown apparently has gained 'political capital' and is now proposing leadership of an exercise to rewrite the rules of the international trading system. This is like asking the captain of the Titanic to rewrite the rules of seamanship on the basis that he arranged the evacuation of the ship efficiently. However, in this case, we still do not know whether Gordon Brown has even saved the 'passengers'. As just one example, there is news that unemployment is soaring in the UK (exactly as I predicted), and rose at the fastest rate for 17 years in the three months to August.
The idea that Gordon Brown has gained 'political capital' is very worrying, and further increases my doubts about leadership through this crisis. I have consistently been worried about the leadership in the Western world, but this is very worrying indeed. I can only hope that the leaders of other countries start to see through vacuity of Gordon Brown's thinking. In the meantime, with Gordon Brown ascendant, what hope for the UK economy?
A very short post but I am very disturbed by this sudden lift in the reputation of Gordon Brown. It does not bode well at all for the future, but suggests that the reality of the economic situation will continue to be ignored in favour of the magic wand solution of debt led recovery. As I have said so many times, this is just postponing the disaster, and postponing at a price.
Note for Ishmael (comment below): I am afraid that I did not receive your last comment, so I am unable to reply to it. It seems that some comments are not getting through to me (though most are). I am not sure why this is the case. I have had one other commentator mention that their post did not appear. All I can do is apologise. I chose Blogger on the basis that it was a well known service, and has a good reputation. It seems that, despite this, it has some glitches. Please accept my apologies for inconvenience as, at the end of the day, I chose this service, and therefore my poor choice is responsible for causing this inconvenience. Unfortunately at this stage, it is a little late to change services, so I am in the unhappy position of having to accept these gltiches will occur. I can only apologise for this again.
Note 2: Another commentator has posted on the New World Order conspiracy theory as follows:
'Do some more research on NWO,Who are the conspirators, how are they operating, what have they actually done, and why is this conspiracy theory more convincing than the reasons I have detailed throughout this blog?
This conspiracy theory had been planned since before 911, 2001. One World Bank , One world currency standard.
The only way this could happen was through a melt down or collapse of the market, not just our but a world market.
There are only a few that can plan such a thing, but those are the ones pulling all the strings. (Men in Black)
Don't be foolish. I knew this was going to happen years ago.
Remember we only get what is spoon fed by the media.
Here take a number SS or CC and be a part of a system, if not good luck in surviving in Babylon.'
Once again, I would ask anyone who believes in the conspiracy to offer some evidence from a reputable source. I followed a link given to me and found that it led to a video of a white supremacist showing an 'Amero' coin. This was hardly convincing. I am genuinely open to being persuaded on this, but would appreciate any references that the conspiracy theorists might be able to offer to convince me. Until such a time, I can only assume that there is no conspiracy. In my original post on the subject, I presented an argument as to why a conspiracy is unlikely. Having followed up the subject, I have yet to have my mind changed.
LordSidcup (see comment below) makes a perfectly fair point in saying that Gordon Brown is not alone in making the errors that have led to this crisis. The reason for my worry that he is in the ascendent is that he represents a good example of the delusions that have been at the heart of the cause of the crisis. Were it George Bush, Bill Clinton, or any other of the world leaders, who failed in their analysis, I would make the same comments, were they striding high on the world stage. My selection of Gordon Brown is without any partisan basis, but is based upon his record in running the economy, and on the basisthat he seems to be taking a lead in the management of the crisis.
Yes, others made the same errors. This does not mean that Gordon Brown did not have the opportunity of making a correct analysis of the economic situation all those years ago. In this sense it is not personal, and my point is that it is indicative of the problems of the leadership in the Western world. The same leaders who made the wrong analysis, are now the same leaders analysing the results of their first failed analysis, and proposing solutions to the problems they helped to create. It is hardly encouraging.
However, a perfectly fair comment. I should have been clearer in why I selected Gordon Brown as the basis for my critique. It is because he is in the ascendent. My worry is that there should be economists and politicians who are striding the world stage who are offering the media and public a more realistic evaluation of the situation. In short, the ascendency of Gordon Brown is symbolic of the continuation of the dream that more debt is an answer, and yet more poor analysis of the situation.
I write this blog in the probably vain hope that the blog, and views of other commentators who share more realistic views, will eventually have some influence. It is the hope that politicians/ the media / the public will finally look at the underlying reasons for this crisis square in the face, and look to remedies that will help reconstruct the economy in the medium and long term. Gordon Brown's ascendency is the symbolic antithesis of such hopes.
Note 4: I have just made a (very quick) survey of the new editions online. It seems that any hope that there is any boost in confidence from the bailouts is diminishing fast, as economic reality bites (as I proposed in a previous post). I also proposed that markets might go through ups and downs, but perhaps the sheer scale of the bad economic news will lead to a negative tracjectory only? Meanwhile there is more news of high borrowing countries crumpling under the weight of their own loans, and more calls on the IMF. Nervousness about the UK and US will no doubt be mounting in foreign creditors, even as I am writing. I proposed that a crisis in government insolvency was about 3 months away, but am now thinking that, just possibly, it may be sooner. As for the EU, I think Hubris comes to mind, when reading the following quote:
'The monetary blitz was welcomed in Brussels, where EU leaders were meeting yet again, just days after agreeing to the most comprehensive bank bail-out in history. "We are not at the end of the crisis, we are still living in dangerous times," said Jean-Claude Juncker, Luxembourg premier and Eurogroup chair.
He issued a stark reminder that life is going be very different for the banking elite as governments move to restore the lost discipline of the Bretton Woods financial order and attempt to "civilise" capitalism, the code word for clamping down on the City – dubbed "the Casino" in Europe.
"Let everyone remember after this crisis, who solved it. Politicians did, not bankers," he said. Mr Juncker added that this episode would have a profound effect on the euro debate in Britain.'
Yet again, apparently, the crisis is being solved. Perhaps some of these politicians should read the news?
I will try to write a proper review of the situation soon, as ever more problems are emerging, and the situation appears to be moving in an even worse direction than my own already very pessimistic predictions. I will try to round up all of the news, into a more integrated picture, and see where it will leave the world economy, and the economies in the UK and US, and to a lesser extent Europe.