Gordon Brown on the Politics Show

PM Gordon Brown claimed on the BBC Politics Show today that the global credit crunch was not forseeable. The structures to protect against bank breakdown were only designed for individual bank failure like the UK’s Northern Rock. Hmm, I thought, but haven’t we been told about the ‘global economy’ for years now, and its essential ‘inter-dependency’. And this no doubt would include banks. But the possibility that bank failure could be plural and inter-dependent in nature was not planned for, not by the FSA, not by all those clever  folk at HM Treasury. Really?

PS: ICAEW CEO Michael Izza suggests in his excellent post-Davos blog that ex-PM Tony Blair might still have a role to help communicate the complexity of the crisis.

The comedy of errors

Allister Heath in City AM warns PM Gordon Brown not to use the nationalisation of the banks to over-inflate the housing market once again: “The government is on much weaker ground with its attempt to revive lending to consumers and homeowners by fiat.” But he’s missing the obvious (oops!). The Chancellor is over-joyed at the ability to ‘persuade’ the nationalised banks to lend again. 

He sees it as being dealt a winning card; it will allow him both to stave off recession by re-inflating the housing market and consumer consumption, and so win the votes that matter for the next General Election — a stroke of incredible luck & genius to boot? Only time will tell.