Strong banks, unfrozen markets, greater transparency and international supervision are the four keys to recovery. The stability and restructuring programme for Britain that we announced this week is the first to address at one and the same time the three essential components of a modern banking system – sufficient liquidity, funding and capital. So the Bank of England has pledged to double the amount of liquidity it provides to the banks; we have guaranteed new lending between the banks so that we can get the banks lending to each other again; and at least £50 billion will be made available to recapitalise our banks. We will take stakes in banks in exchange for a return and will guarantee interbank lending on commercial terms. And at the heart of these reforms are clear principles of transparency, integrity, responsibility, good housekeeping and co-operation across borders. Giving them more of our cash may not be enough. The Bank and the Treasury believe the move will benefit all banks but many bankers believe other measures will be needed. But because this is a global problem, it requires a global solution. Indeed this now moves to a global stage with a range of international meetings starting this week with the G7 and the IMF and, we propose, culminating in a leaders meeting in which we must lay down the principles and the new policies for restructuring our banking and financial system all around the globe. – Times Online
Dominant Social Theme: Gordon Brown to the rescue.
Free-Market Analysis: Thanks to the current credit crisis, which is actually a crisis of Western "fiat" money, UK Prime Minister Gordon Brown has seemingly made a comeback in popular opinion. Popular opinion had previously been running heavily against Brown, who succeeded the increasingly unpopular Tony Blair.
It is a little difficult to summarize all that has gone wrong with Britain in the past decade, but Brown has certainly not made things any better. Britain is increasingly a soft-to-hard police state, pursuing elitist policies that squeeze what is left of its middle class. Here's an excerpt from a recent article on Britain's future from the leftish Guardian which is usually a Labour boost sheet:
The past few years have thrown up dozens of instances which made one wince to be a citizen of this septic isle, but a personal low came with the discovery that 500,000 bins had been fitted with electronic tracking devices. Transponders in bins … Could any morning news item be more designed to force one back against the pillows, too embarrassed about one's country to start the day? Yes, as it turned out. A couple of months ago it was discovered that Poole borough council, in Dorset, had used the Regulation of Investigatory Powers Act – designed to track serious criminals and terrorists – to determine whether a school applicant and her parents lived where they said they did. They did, and were appalled to discover they had been spied on for three weeks, the subject of surveillance notes such as "female and three children enter target vehicle and drive off". Target vehicle, if you please! The thought of some deep-cover council drone jotting this stuff down as though it were an elite Delta Force operation is not as funny as it is horrifying. Just who are these people, these swelling legions of unelected, ill-qualified monitors who wield such extraordinary power in our surveillance society? Clarification in one case came last year, when the civilian in charge of a Worcester police station's surveillance team was suspended after detectives found, among one day's footage, a 20-minute sequence of close-ups of a woman's cleavage and backside as she walked oblivious through the streets. Whether the woman ever discovered she was the star of a kind of pervert Truman Show is not recorded. But the offending monitor escaped with a warning and was – unbelievably – back in post within weeks. …
The former home secretary John Reid, on whose draconian watch the Middlesbrough scheme was approved, even suggested at its launch that schoolchildren should enter a competition to become the voice of the cameras – once again laying bare the government's desire to co-opt its citizens into the surveillance process at all levels. We are, of course, coming up to the time of year when we are ordered to shop our neighbours for acts of hosepipe, while the Shoreditch Trust recently trialled a scheme encouraging residents to watch live CCTV feeds on a special local channel, the better to assist in policing.
So there is Brown and Blair's England – a Britain in which people's trash habits are tracked surreptitiously, its children are spied on for school attendance purposes and young women are ogled by those behind the country's thousands of public security cameras. Brown's party, supposedly the party of the British common man, has been behind this ghastly reduction of privacy and freedom.
What exactly about socialist Britain works? Its schools are a disaster, its egalitarian health care system is so backed up and intermittent that few actually receive what has been promised to them, and more are apt to die while waiting. One might have been able to point to the "City" – Britain's version of Wall Street – as a measure of British success in at least something. But now that has been exposed as part of a ruinous bubble economy.
Brown and New Labour don't have the answers, of course. They are part of the problem. Here's a summary of some of the larger issues of Brown's tenure as PM according to Wikipedia,
The "non-election": Gordon Brown caused controversy during September and early October 2007 by letting speculation continue on whether he would call a snap general election. (Editors note: he never did.)
Military Covenant: November 2007 saw Brown face intense criticism of not adhering to the 'military covenant', a convention within British politics stating that in exchange for them putting their lives at risk for the sake of national security, the armed forces should in turn be suitably looked after by the government. … Poor housing, lack of equipment and adequate healthcare provisions are some of the major issues Brown has been accused of neglecting.
European Union: Brown has continued to be dogged by controversy about not holding a referendum on the EU Treaty of Lisbon. On the morning of 13 December 2007, Foreign Secretary David Miliband had to stand in for the Prime Minister at the official signing ceremony in Lisbon of the EU Reform Treaty, which was attended by all other European heads of government.
42-Day Detention: Following the rejection of a previous bill under Tony Blair's government to allow for terror suspects to be detained for up to 90 days without charge, Brown championed a new bill extending this pre-charge detention period to 42 days. The bill was met with hostility on both sides of the House and, facing a growing backbench rebellion. In the end, the bill passed with just 9 votes.
Plots Against Leadership: The first signs of internal disquiet towards Brown's policies surfaced as early as May 2008. Brown, in his 2007 budget, his last as Chancellor, abolished the 10% income tax rate for the lowest earners (5.1 million people), increasing their rate to the next highest, 20%. … In the face of protests such as this though, Chancellor Alistair Darling cut the tax rate for 22 million people, and borrowed around £2.7 bn to reimburse those on lower and middle incomes who had suffered.
While all looked grim for the unpopular Brown, given the above litany of his activities as PM, the recent monetary crisis has reinvigorated him and caused his popularity numbers to rise on the ostensible certainty that he is competent when it comes to the economy. But is this so? In his role as chancellor of the exchequer, we learn from Wikipedia that between 1999 and 2002 Brown sold 60% of the UK's gold reserves at $275 an ounce. It was later attacked as a "disastrous foray into international asset management" as he had sold at close to a 20-year low. He pressured the IMF to do the same, but it resisted. The gold sales have earned him the pejorative nickname 'Golden Brown', after the song by The Stranglers.
New Labour and Brown have presided over policies that have made British citizens among the most spied-upon on earth, have passed laws that can incarcerate citizens at will without cause, have rammed through an unpopular strengthening of the ties with the Draconian EU without putting it to a vote, have continued failed socialist tax and spend policies and, finally, have presided over the manufacturing and bursting of a worldwide financial bubble.
Is this the man that the British media are trumpeting as having the gravitas and economic good sense to preside over the revival of the City and the larger British economy? Will strong banks, unfrozen markets, greater transparency and international supervision put Britain and Europe on the road to recovery? Let's see, we can't argue with strong banks and unfrozen markets – but the rub is how to get there. Brown proposes greater transparency and international supervision. One can only imagine that those suggestions will be put in place by Brown and his cohorts at the European Union. And what makes Brown uniquely qualified to help create such a vase and wise new policy – his experience in selling gold at US$275 an ounce?
As predicted many times herein, Brown and his EU chums, assisted by America, will use the crisis to mount a power grab, bringing more and more bank and corporate activities under the sway of their collective, and increasingly internationalist, governance. While this is cynical enough, what is even more problematic when it comes to the UK is the trend of New Labour and Brown's approach to public service. The last decade have produced in the West generally and in Britain particularly an enormous erosion of basic human freedoms. The arrogance with which Brown and others continue to pursue their misguided aims, while papering over their incompetence with bombastic platitudes is nearly saddening to see.
Brown wants strong banks, but how is he going to get them? The money that Britain and the EU are proposing to sink into bank recapitalization will inevitably come from taxpayers and from money inflation that will further inflate currencies around the world. It is a kind of race to the bottom, one the taxpayer is certain to lose – especially if they do not take the proper actions to protect themselves. Most unfortunately won't.
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