We’re in full-blown crisis, but obsessed with the wrong one

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Economy

By Brian Barder / @BrianLB

The media, electronic and print, are in one of their periodic feeding frenzies over the hung parliament and the leisurely horse-trading (very much the right word, alas) over who might form a British government one day. The Prime Minister, in office but no longer in power, has very sensibly gone home to Scotland, where he’s been to the kirk (well, it’s Sunday and he’s a son of the manse).

While we’re all feverishly subjecting to intensive textual analysis every casual word confided to Andrew Marr by earnest young Mr Gove, and nodding agreement to the pearls of wisdom emanating from Messrs Marr, Rawnsley and Boulton, the casual UK newspaper reader and television viewer could be forgiven for not noticing that Wall Street and the Eurozone are on fire, sterling and the London stock exchange are in free fall, the key leaders of the rest of Europe are in almost permanent crisis session, and we face the real threat of another global slump on the scale of the banking collapse of 2008.

The intricacies of our parliamentary arguments and feeble gropings towards forming a proper government are almost wholly irrelevant to the bush fire raging all around us – except that if we carry on much longer with (in effect) no government, no functioning Prime Minister, no policy for dealing with the new banking and credit crisis, and no prospect of having any of these rather desirable things quite soon, the nervous nellies on the trading floors will write us off as an obviously impossibly bad risk, perhaps starting tomorrow. They will thereupon sell off our currency for whatever they can get for it, and laugh at the idea of buying our sovereign debt unless we pay them an astronomical premium in interest to bribe them to do so, thus adding yet more billions to the bill for borrowing and the need to borrow even more. The only way to placate them will be to follow in every detail their self-serving orders: no increased taxation except taxes that hit the poorest hardest, swingeing cuts in all public services, instant action to pay back to the bankers the massive debts we were forced to incur in order to rescue them from their own greed and folly, thus strangling any hope of slow steady recovery from the recession; and all this at the expense of the jobs and homes of ordinary working (and retired!) people who bear no responsibility whatever for the mess we’re in.

So while our pygmy politicians squabble at a glacial pace over electoral systems and tax credits, Greece is on fire and the fire is lapping at the gates of Portugal and Spain, then Italy: no guesses at who’s next in line. The FTSE 100 has seen its sharpest fall in five months; EU leaders are “struggling to put together a European multibillion-euro emergency facility to protect the eurozone’s most vulnerable countries before financial markets open on Monday”, with Britain reportedly turning down the pressing invitation to contribute to it; “on Thursday, a cascade of automated trades tumbled through equity markets, knocking 650 points – just over 6% of its value – off the Dow Jones Industrial Average stock index in a matter of minutes. It recovered to end the day only 348 points down – but not before striking terror into the hearts of traders. On Friday, the FTSE 100 lost £35bn in value“, also according to the FT; and much, much more of the same.

Unless you buy the Financial Times, you wouldn’t know about any of this from the front pages or from the television Breaking News straplines. All you’ll discover is that 99.9% of the population (or some such figure plucked from empty air) think that Gordon Brown should resign immediately as prime minister, blithely ignoring the reality that if Brown resigns now, the rest of the government resigns too, there’s currently no-one else who meets the requirements for being invited to form a government, and we’d be sailing our leaky ship towards the rocks without even the half-broken rudder that we have at the moment. Meanwhile 5,000 excited people in peculiar hats assemble in Whitehall waving placards and shouting imprecations at young Mr Nick Clegg if he dares to climb into bed with Dave without first securing a new electoral system. I didn’t hear a single demonstrator yelling at poor Nick “Never mind proportional representation, Nick: that can wait – for God’s sake get on with getting us a government before the markets open on Monday morning, or we’re all toast!” The elder statesmen gravely admonish their boyish successors to take their time over the negotiations; better to get it right than to get it soon, they say. Other European countries do this all the time, and sometimes take months to reach a conclusion: what’s the hurry? Clegg spends fruitless hours with various permutations of Lib Dem party leaders and their councils and committees, trying to get their permission to accept something less than 100% of Lib Dems’ perfect-world demands in order to permit a Cameron government to be formed. Cameron is similarly assailed by the troglodytes of his own party menacingly crying betrayal at any sign of willingness to make a few meaningless concessions to Lib Dem sensibilities. From time to time Gordon Brown telephones Clegg from his Scottish croft with yet more imaginative bribes dreamt up by Lord Mandelson, and shouts angrily down the line at the hapless Lib Dem leader when he doesn’t instantly and gratefully swallow the bait. You might think, mightn’t you?, that these great statesmen would be scared out of their wits at the thought of what the almighty markets will do to us if we still haven’t resolved our piddling little problems by Monday morning when the markets wake up and resume their important blackmailing duties. Not a bit of it. Further party meetings are even now being scheduled – for Monday evening. This is indeed the way the UK ends, not with a bang but a Lib Dem whimper.

While Greek workers riot in the streets in protest at the savage cuts in their living standards and jobs being forced on them by the omnipotent, all-seeing markets and their handmaidens in the Chancelleries of continental Europe, our own middle classes are decorously but equally angrily demonstrating in favour of various forms of proportional representation – a cause which on even the most favourable assumptions is highly unlikely even to be put to a referendum within the next five years, and if it is, might well be rejected by popular vote. Polly Toynbee and Helena Kennedy are nevertheless in a state of uncontainable excitement all over the television screens and the columns of the Guardian at the marginally improved prospect that some time in the parliament after next, we might move to a referendum on an electoral system that would be guaranteed to land us in this kind of chaotic and paralysing mess after every single election, unlike First Past the Post which does it to us approximately once every 20 years.

So we have to pinch ourselves to be reminded that there’s a real, man-sized crisis going on out there in the real world, while we’re all busy examining our constitutional navels. Two centre-right heads of government and/or state, Angela Merkel and Nicolas Sarkozy, our two most powerful EU partners, both of the political right, are vehemently denouncing the irresponsible power of the markets and the credit rating agencies over the policies and actions of sovereign independent countries and their elected governments. Chancellor Merkel calls for the restoration of the primacy of politics over finance. Merkel, Sarkozy, Obama and other leaders in Europe and the US are calling for much more effective international regulation of the banks, to address the present glaringly wide democratic deficit. Here is the overwhelming and most pressing problem of the decade, crying out for remedial measures before the whole structure collapses, and the only response from our doomed, caretaker government is a restatement of its stubborn opposition to any more regulation, speaking from a script composed by a committee of fat cats somewhere in the City. And if ever we finally get around to transferring the tenancy of Number 10 Downing Street to young Mr Cameron, with even younger Mr Clegg trotting obediently along behind him, we may be sure that they will obey the reactionary and regressive commands of the City and the international bankers even more slavishly than New Labour has been doing these last 13 years.

Two postscripts, one exasperated and the other sad:

1. Why do our political and constitutional pundits continue to talk as if the Labour Party would need to elect a new party leader before there could be a new Labour-led alliance of the centre-left parties under a new prime minister such as one of the Milibands or Alan Johnson (or, God help us, Ed Balls)? Gordon Brown could perfectly well continue as leader of the Labour Party but step down as prime minister, provided it was clear before he resigned that Miliband/Johnson/[Balls] was the person demonstrably best placed to form a government that would have the confidence of a majority in the Commons: a feasible but in my view highly improbable scenario. (And why does the Guardian publish a letter from an enthusiastic joker who thinks that Labour plus the Lib Dems have an overall majority in the House of Commons? Nought out of ten in arithmetic for the joker – and even less for the Guardian letters editor.)

2. The death of Alan Watkins robs us of the best, most elegant, well-informed and wittiest political commentator of our age. He was a delightful and convivial friend and a brilliant writer, whose weekly column in the Independent on Sunday took all the most perceptive people with an interest in politics straight to the IoS website, if not always to the newsagent, every Sunday morning. We should all uncork a bottle of reasonably expensive red this Watkins-less Sunday and drink most of it at a sitting to his memory. (His last column is here.)

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