Is it any wonder we're in trouble when politicians inhabit another world
Lehman Brothers of New York, an investment bank founded 158 years ago, collapses leaving more than 25,000 people worldwide without a job. Merrill Lynch, the world’s largest stockbroker, sells itself to Bank of America to avoid bankruptcy.
AIG, one of the world’s largest insurers of financial institutions against their potential losses, has been nationalised by the American government which has poured $85billion into it to prevent a total meltdown of financial markets.
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And in Britain? Nick Clegg, leader of the Liberal Democrats, meets the crisis by announcing that, for the time being, he will shop at Sainsbury’s. What a sacrifice! Perhaps if things get really bad he will even take a bus.[>
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Clegg demonstrated the complete disconnection of our political class from daily life in Britain when he said that he thought the State pension was £30 a week.[>
Nick Clegg thought the State pension was £30 a week
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The reason Clegg was so wildly wrong on this subject was almost certainly because the real figure was of no personal significance to him. Increasingly, the British political class, like that of all other European countries, lives in a protective bubble of index-linked allowances and pensions that protects them from the anxieties of the ordinary people who elect them and whom, supposedly, they serve. [>
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But what of Gordon Brown, the would-be saviour of Africa’s children and protector of the Earth’s atmosphere from the effects of carbon dioxide? [>
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His activities and pronouncements remind one of the way a mouse, confronted by a cat that is about to pounce, sits and washes its paws for lack of anything more constructive or worthwhile to do in the circumstances. The mouse reassures itself but the cat is still there. [>
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Indeed, our politicians seem more interested in jockeying for power than in the fate of the country, more like vultures squabbling over carrion than doctors concerned for a patient. Perhaps this is because they are powerless in important matters but powerful in trivial ones. Politicians of whom we previously have scarcely heard suddenly fancy themselves kingmakers, if not kings. Power and office are all, service nothing. [>
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Let us be quite clear in order to be fair: the global financial crisis is not of Brown’s making. As we have sensed this week, he and Britain are far too insignificant for that. But Brown nevertheless bears a large responsibility for the extreme vulnerability of our country to the crisis for he has long presided over the British economy and it now resembles a giant pyramid scheme. [>
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Like all pyramid schemes it seemed to work astoundingly well for a time, conjuring vast wealth out of nothing, as it were. However, like all pyramid schemes this one was bound to collapse when confidence, an intangible but essential quality, was lost. So, what is the nature of Brown’s pyramid scheme? [>
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Easy credit allowed house prices to rise astronomically. You couldn’t go into a bank without it offering you money. (When I applied for a loan to buy a house my bank was eager to press large sums of money on me without really inquiring, let alone knowing, whether I could repay them. Gone were the days when I received shirty letters from my manager informing me I was £2 18s 7d overdrawn and asking when I was going to rectify this terrible situation.)[>
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People were deluded into thinking that they were getting rich merely by virtue of living in the house in which they had owned for the past 10 or 20 years. The rising value was security for them to take loans for anything they wanted. [>
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Banks and credit card companies offered them money, granted by return telephone call. I would regularly be offered £25,000, no questions asked, in case I wanted the holiday of a lifetime. But if you have to borrow money for the holiday of a lifetime you can’t afford it. [>
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All this frivolous expenditure, paid for by loans, made for apparent prosperity – but where was the money coming from? Britain wasn’t paying its w
