Saturday, April 04, 2009
Gordon's Stint as 'Chancellor to the World' Has Won his Place in History
Firstly, assembling this mega-gathering of world chief executives was something only Obama, of the visitors, could have pulled of. To do this he had to jet around the world like Tony Blair at his most manic but he got them here, largely because it was him doing the convening.
Secondly, the agreement reached was much more than rhetoric. The international 'fiscal stimulus' did not transpire- stymied by France and Geremany among others who feel enough money has been borrowed for this purpose already. Also the 'green agenda' was not addressed, which is regretable but it was always going to slide down the agenda with so many politicians representing societies rather more anxious about jobs and living standards.
i) The $1.1 trillion to the IMF to assist mainly the developing countries was a substantial hand-out which they could not have realistically have expected.
ii) The Financial Stability Board-designed to apply detailed monitoring of the international economic system and solve its problems- was also a hopeful new sign that the world has recognised the need for some management of the globalized economy.
iii)Another aspect of this was the agreement to control hjedge funds and apply sanctions to tax haven which refused to comply with new international standards on such matters as transparency.
It's true that this was no Bretton Woods, no fundamental reform of capitalism and one wonders how severe a future crisis will have to be for this to be thought necessary. But for a two day world summit, this was a major success. We learn today that Brown is desperate to capitalise on his success and is busy instructing ministers how this might be done. My instinct is that all this has come as too little and too late to save Gordon politically, but the excellent Larry Elliott yesterday suggested otherwise:
But the immediate outlook is improving. The economy is still contracting but the pace of decline is flattening out, and growth is likely to resume, albeit weakly, by the end of the year. If the economy is picking up, Brown thinks he is in with a fighting chance, because voters will be faced with a choice between an experienced prime minister who was brave enough to take the tough decisions and a wet-behind-the-ears Opposition leader who wasn't. He could be right.
Didn't George W have just such a meeting at the end of last year(in his "lame duck" phase), and he got all of them to turn up(these clowns will turn up for anything if the buffet cart is stocked)? Doubtful whether Obama would have even turned up if not for the NATO birthday. The idea that Gordon wields influence in the world is so hilarious I am almost in tears with laughter.
Blair will be remembered for Iraq. Although given the last two years in Iraq, and the progress towards a peaceful society, history may not remember him too badly. Brown will be forgotten by history.
The IMF move is a fraction of what was cut last year. Creative accounting from borrowed money. Very courageous(!). The Fiscal Stability Board will go the way of all these agengies...grand but impotent. And the legislation of Hedge Funds. The whole point of Hedge Funds is that they act secretly. If they are regulated, new vehicles will be created. People who think Hedge Funds caused the current mess really don't understand the problem.
Fundamentally, the world's economies are still broken and on a sharp downtrend. Even allowing for the money printing that is taking place(deferring the problem if you like), we have massive problems to deal with for the next year(rising unemployment, falling asset prices both have longer to go than most realise).
Brown is done. When I ask you, you seem to appreciate this. Then you go and get excited over a non-event like this. The public are not (all completely) stupid. They know Cameron is unproven. But better to be unproven than manifestly incompetent. Time is up.
I might point out that my comments re GB were quoted from Larry Elliott rather than being of my own construction. I'd trust his opinion a long time before I did yours, much as I enjoy reading your dyspeptic views.
I'm sceptical too re the outcome of the summit but time will tell. You seem so delighted, in these parlous times that Brown's demise has been ensured, I wonder if you don't think the economic crisis is the worth the collateral damage for this effect alone.
Anyway, the bottom line is Brown did not mess uip and made a decent fist of acting as Chancellor to the world.
I am delighted. For ten years, we had Brown lie to the world about his economic competence. "An end to boom and bust"(!). He sold our gold at 250 weak USD when it should now be worth 900 strong ones! Thank you Chancellor(!). His lie has been exposed. I cannot actually believe the guy has the nerve to stay on the stage. I dream of a Ceausescu style end for him, although this time we must get it on film.
Fortunately I saw a lot of this coming. Debt is a very dangerous thing, and we had too much of it in the system. I sold my shares and my house shortly after abandoning the UK. A lot of luck in that, something the one eyed Scots idiot has none of. I might buy them back at a fraction of the price now! I get paid in USD, which buy considerably more Pound Sterling since the Brown economic miracle. So actually this whole thing has helped me, and as a non-taxpayer I avoid the debt bombshell headed your way Skip. But I earn my salary. I don't know how Brown has the front to collect a wage for his efforts.
As for the economy. No lasting damage will be done. Companies and individuals will just have to wind in their debt positions. In the long term it is a good thing. And the US car unions will be smashed once and for all.
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