Thursday, May 15, 2008

Relaunch # 4 in serious trouble already.

Gordon has spent the last few days in another 'relaunch' of his premiership, first with a £2.7bn tax 'borrow-and-giveway' ploy then with yesterdays string of new policy announcements (can you remember any of them? No, neither can I) and today he has been touring the newsrooms trying to repair his decimated public image; and judging by the reactions in the press, he has completely failed.

Brown just cannot help making pledges and promises to ‘fix’ things that, in all honestly, aren’t his problem.

House prices are a good case in point. Having for years promised to ‘do something’ about the level of house prices Brwon as adopted responsibility for an issue that is not in his control. Consequently when house prices became too expensive he took blame for it and now that they are due to nosedive he will get the blame for that, too.

As private homebuilders (over whom Brown has no control) mothball new building sites he will get even more blame for miserably failing to meet ‘his’ 3m new homes target.

I have pointed out before saying you had brought an end to boom and bust in a free economy is about as realistic as saying you have ended summer and winter.

From as soon as he said it a ticking clock to his own doom was started; it’s not a question of if there is a bust it is only a question of when, and the longer the boom, the bigger the bust that must follow.

Banks have been lending recklessly as they always do as a boom reaches maturity and they go chasing market share with their swollen reserves; this time it has been in housing; in 1929 it was in share speculators, in the 1980’s it was South America - whatever the case the outcome is always the same; bad debts and a credit squeeze.

Its banks who cause recessions, not Governments. Governments may make them worse (or mitigate them if they can) but its the desisions made by millions of consumers, thousands of investors or hundreds of bank managers that makes our economy grow or shrink not what Gordon decides.

If he still doesn’t understand that at his age he really isn’t fit to be PM.

1 comment:

Anonymous said...

It was the banks last time but they werent helped by a Government that was determined to gerrymander with our currency in the hope of entering the ERM.

Had Lawson not stupidly shadowed the Dmark in 1989 we wouldn't have had the crash of 1990/91 when interest rates had to stay oppressively high and thousands of people lost their homes and businesses.

In that sense Gordon Brown has tried to abolish 'boom and bust' by giving independence to the Bank of England - although as you say whether it will work in the long run is still in doubt.