WHAT is it about Gordon Brown and Alistair Darling? Were their mothers frightened by Trotskyists when they were in the womb? Why do they have this blind terror of doing anything that might be seen by the Daily Mail as socialism? There they are, sousing the bankers in taxpayers’ money as if with a fire-hose, yet they continue to insist that they have no wish to engage in running the banks directly.
Darling was at it again on Monday morning this week as he wrestled rather punily with a rampant John Humphrys on Radio 4’s Today programme about his latest blizzard of proposals to bail out the banking system. Humphrys wanted to know why he didn’t just nationalise the buggers (he didn’t use the word, but that’s what he meant) and get on with doing the banking which the bankers plainly aren’t willing to do themselves.
But oh, dear me, no. Sounding rather like a maiden aunt who has just seen a mouse, the Chancellor squeaked that the Government had no wish to get directly involved in managing the banks. Why the hell not, asked Humphrys (again, he didn’t actually use the word, but it was there all the same). Because it wouldn’t be the right thing for a Government to do, said Darling, with exquisitely circular logic.
Well, I, too, want to ask why the hell not, and would like to see some more persuasive argument than one which threatens to disappear (like the legendary Ousel bird) up the Chancellor’s fundamental orifice. I don’t believe the great British public gives a hoot whether it would look like socialism, any more than ex-President George W Bush (how wonderful to be able to add that prefix) seemed to care. In the end, Darling may be forced into nationalisation by events. So why does he have to behave as if it was a fate worse than death?
However, it isn’t just the matter of running the banks, important though that is. Brown and Darling seem to be equally maiden aunt-ish about the even more basic issue of the future regulation of free markets.
As The Guardian reported last week, those two notorious red activists, Angela Merkel and Nicolas Sarkozy, have been calling for a more moral form of capitalism, entailing much stricter regulation of the free market. They intend to press their case at the forthcoming G20 summit which Britain happens to be hosting.
But instead of crying Hosanna at the conversion of two former right-wingers to the cause of a regulated, cleansed and purified capitalism, our two heroes are apparently set to oppose them. The Guardian somehow got hold of a letter from Darling to the G20 leaders in which he preached the virtues of the free market.
“The key to retaining faith in financial markets is to establish and maintain consensus within the G20 and elsewhere as to the importance of open capital markets”, he wrote. “We need to have a fuller explanation of the benefits of the financial system, and of financial globalisation in particular.”
Is that really what we need? If so, I reckon we can leave the explaining to the Adam Smith Institute – a right-wing agitprop organisation whose name is an insult to the great 18th century Scottish economist from whom it was hijacked. And even those loonies up in St Andrews would find it an uphill task at a time when the whole world is suffering from the alleged “benefits” of unregulated markets.
Pretty well everyone now acknowledges that it was the scrapping of the regulatory system imposed as a result of the Great Depression that has brought us to our present pass. True, the scrapping process was begun by President Ronald Reagan and Margaret Thatcher. But alas, it was endorsed and reinforced by Labour, under the chancellorship of Gordon Brown – the centrepiece of whose deregulatory regime was the renunciation of Treasury control over interest rates.
Perhaps that is the problem. All that “new” Labour bunkum can now be seen as part of the cause of the present crisis – albeit a small part compared to the part played by the Bush administration on the other side of the Atlantic.
But Brown is not famed for his capacity to acknowledge error. It is going to be tough for him to renounce most of what he set out to do as Chancellor and then plot an avowedly different, collectivist course as Prime Minister. Nevertheless, that is what is required – and quickly.
Three things may help. The first is that most of the media can now see just how terrifying the situation is and will not run the kind of campaign against the latest package of measures that could have been expected in similar circumstances just a few months ago. Everyone is so scared that they are prepared to go along – at least for the time being.
The second is the re-appearance of Kenneth Clarke on the Conservative front bench. Although this isn’t good news for Peter Mandelson, Clarke’s return may actually help Brown and Darling by injecting a bit of level-headed common sense into Tory economic policy. He is a big hitter, certainly, and highly political. And he knows enough about running an economy to be aware that the situation is far too serious for mere point scoring.
Third, and perhaps most important, is the advent of the age of Barack Obama. True, he has more than enough on his plate trying to save the United States economy. But his readiness to take radical action in America is going to provide just the kind of example to an already admiring British public that will disarm criticism and assure support for whatever collectivist steps Brown decides to take.
The problem, however, is that no one – not Gordon Brown, David Cameron, Kenneth Clarke, not even Barack Obama and certainly not me – has the faintest idea how all this is going to end. Indeed, very few people would claim to know what is going to happen tomorrow or next week, let alone next month or next year. Being in uncharted waters is bad enough at any time. But being without a map in the middle of a typhoon is terrifying.
