Saturday, September 20, 2008
'The Party's Over'
Elliott, one of the few financial journalists, whose jeremiads on Brown's policies have been proved right, comments:
Over and above the extraordinary individual events, there was the capitulation of the prevailing economic model. History will show that the great postwar experiment with financial deregulation lasted from the first oil shock in 1973 to the third oil shock in 2008. Between those years the constraints on capital imposed after the Great Depression were whittled away, leaving a world of easy credit, complex financial instruments, stratospheric salaries and supine regulators..
For Middle Britain, the traders who bragged about £1,000 bottles of Krug are now as loathed as the bolshie shop stewards of the 1970s. Only rarely is there a palpable public mood swing in Britain; the Winter of Discontent was one; this is another.
His conclusion, touching on Callaghan's 'the party's over' speech in 1976, is worth quoting too:
How to mark the end of an epoch? In 1976, Jim Callaghan was undertaker for the post-war social democratic order when he said: "We used to think you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that option no longer exists.
On Tuesday, Gordon Brown should stand up and say: "We used to think you could borrow your way out of a recession and increase employment by increasing debt and setting the City free. I tell you in all candour that option no longer exists. It would bring the house down".
It would indeed.