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Not me, guv'!

Listening to Gordon Brown yesterday reminded you that New Labour is not actually responsible for anything, despite a dozen years in office. Above all, the government has washed its hands of any shared liability for the financial crisis that has overwhelmed the economy.

Brown, Chancellor Alistair Darling, and unelected Business Secretary Lord Mandelson are united in once again trying to pass the entire blame for the crisis on to the bankers while absolving themselves for creating the framework for the very same financial system.

"We won't allow greed and recklessness to ever again endanger the whole global economy and the lives of millions of people,” said Darling in Brighton. “Markets need morals” said Brown in his keynote speech, yesterday, pledging that the government would pass new rules covering bankers' behaviour, including disqualifying those unfit to run banks.

Leaving aside the fact that there can be no such thing as a “moral market” in the capitalist system, there is the small matter of Brown’s own role in the financial meltdown that is far from over.

For 11 years Brown was chief supplicant to the world’s financial operators. During that time he willingly and actively encouraged the City of London to become one of the world’s sweetest honey pots for the busy bees in the banks, and the gamblers on the non-bank markets in derivatives.

Ensuring that credit expanded and flowed around the world, turning into debt as it went, was crucial in keeping the profits of global corporations high. Somebody had to do it to keep production churning out the commodities, and consumers buying them.

So in June 2007, just weeks before the credit crunch took hold, Brown declared that the City had entered a new “golden age”, telling bankers:

The financial services sector in Britain and the City of London at the centre of it, is a great example of a highly skilled, high value added, talent driven industry that shows how we can excel in a world of global competition. Britain needs more of the vigour, ingenuity and aspiration that you already demonstrate that is the hallmark of your success.

But now, apparently there’s going to be “a new economic model for a strong economy”, “a new settlement”. While these platitudes were enough to win over union bureaucrats like Tony Woodley, of Unite, Dave Prentis of Unison and Brendan Barber of the TUC, they were just faint echoes of the laughable “birth of a new economic system” conclusion to the G20 meeting in Pittsburgh. And there, dissenters were dealt with severely using tear gas and sonic weapons.

Now, says Brown, finance is going to be the servant of the people, not the other way round. Why then, we ask, did the US and UK delegates ensure that the G20 decided against mandatory limits on bankers' bonuses?

When Brown told his conference that “what let the world down last autumn was not just bankrupt institutions but a bankrupt ideology” he could have (but wasn’t) just as easily been referring to himself and the New Labour “project”.

Brown, Blair and Mandelson won the City over to New Labour on the grounds that they would use the state to set business and finance free to compete in global markets. They would resist the repeal of the anti-union laws and create markets in public services. And the City lapped it up and all went out and voted Labour.

Now the game is up. New Labour has lost it and the British state itself is teetering on bankruptcy. The Tories are on their way back with the support of The Sun, which has seen the writing on the wall and ditched Brown’s party. One thing is certain, however: New Labour is not actually responsible for anything!

Gerry Gold
Economics editor
30 September 2009

Jonathan says:

Gerry, I attended a fascinating lecture you gave 3 years back where you made the point that the current financial system was unsustainably being run on credit at home and unfair trade practices abroad. It's unfortunate to see you have been proved right.

Can you comment on whether power is now switching to the G20 club and whether this means less control in the hands of the corporate banking circle. If not, what is going on behind the scenes. It would be great to get a heads up on where the next bubble is springing up from.

Gerry says:

Jonathan

It's great to know that something I said three years ago is remembered today. Your question overlapped with today's comment Dollar 'time bomb' adds to turmoil about the impact of the global crisis on international political arrangements. I wouldn't say that power is passing from the banks to the G20, it's more that the contradictions at the heart of the capitalist crisis are sharpening the conflict between the globalised economic and financial system and the system of nation-states and producing a realignment of political forces. The combination of monumental government debt, car scrappage schemes and newly minted money is already producing a froth of bubbles in the stock and commodity markets - but having little effect on the availability of credit. These conditions are fertile ground for the seeds we've been sowing. We need to build our campaign around the Peoples' Charter for Democracy. Consider joining AWTW if you haven't signed up already, and if you have, tell your friends!

Pat says:

My argument in all of this is the repayment of the debts created by the bankers. Why should the taxpayer foot the bill ? they didn't have a say in this free trade market, and I am sure that those who cast a vote for Brown or Blair never expected them to be such angels of the capitalist system.

What the people want is justice, none of us would ever get away with losing so much money, we would be serving a jail sentence, having our assets sequestrated, to pay back the money we owe. But we don't owe this money the banking system does and therefore should be forced to pay back the money they lost. No other argument will suffice, until we see justice fairly given for all.

We need laws to cover this kind of theft, international laws which cover every aspect of free trade, and the need to keep bankers out of government, they are like Mandelsson unelected yet they have more say in running the world than those elected by the people to represent the people. We are supposed to live in a democracy after all, the system they are supposedly fighting in Iraq and Afghanistan to put in place. Not that good when the current government they have placed in power. How dare we interfere in any countries free choice e.g Palestine. Rise and be counted demand repayment from the banks not the public purse.


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