Archive for September, 2008

David Cameron on Radio 4

Evan Davis was trying to land a blow on DC but DC held firm.
It started with an attempt to make DC admit that we would have to raise taxes and/or cut spending. DC quite rightly concentrated on the big picture.
There followed an attempt to undermine the right’s raison d’etre whereby capitalism has been undermined and socialism is the best way, you know the drill. But DC kept to the script being somewhat smart after the fact, claiming parliamentary unity at this time of crisis whilst landing the odd party political blow.
Again ED tried to corral DC on tax but he evaded and stayed calm. Since taxes will probably have to be raised before he gets to power, it was the approach that I would recommend. Who needs newspaper headlines of ‘Tories to raise taxes’ when Gordon will have to do it for you (by stealth or otherwise)?
Moving on to spending, DC was well versed on where he could cut spending on advertising, consultancy fees, I’d cards etc. ED again tried to admit that this was impossible to to guarantee from the outside.
DC was overall very competent, rightly pointing out that the Great Depression was caused by the actions after the banking crisis and that is something that globally we must concentrate one. One can’t help but feel that John Humphreys would have been a much better opponent, in his smug comfortable leftie kind of way,  but you can only beat the opponent opposite you.
In summary DC had a good appraisal of his brief, kept his cool, and stayed focused. However there will be far harder tests to come.

This has all blown the Conservatives’ economic planning out of the water. I have to agree with their policy of keeping their head down whilst emitting the odd sniping remark. On can’t publish a revamped policy today which will be turn apart by tomorrow’s crisis. it is the advantage of the opposition to have thinking time, the advantage of the government to show they have experience and can cope, the been there done it attitude.

One hopes that the calls for tax cuts can now be put to bed, and that a sustainable tax and spend model for the medium term can be forged out of this crisis. This is an opportunity for the Tories to shape economic policy for years to come regardless of who is in power. It is however an extremely onerous task


Yes Darling

So Mr Darling has promised to do something to the economy!

Well considering that the credit crunch began some twelve months ago, one can only marvel at his inability to have a structured response by now.

There is only so much that can be borrowed in the current climate therefore taxes have to be raised yet, Darling ever the politician, just didn’t have the guts to say the obvious. This unnecessary economy with the truth is incredibly frustrating. I was happy to praise Mr Darling when he acknowledged the severity of the financial earthquakes some weeks ago, but clearly he’s been told to keep his mouth shut by Team Brown.

What we actually need is a structured attack before the contagion gripping the city hits town & country!

On a separate point, I note the call for a windfall tax is rising in the labour ranks. Now I have a big problem with windfall taxes. There is a system already in place to capture a share of excess profit. It’s called ‘taxation’.  Also, I note that it’s ‘to pay for rishing fuel bills’. Where does this taxing A, to bay for B principle stop? Will all taxation need to be earmarked for a particular related expenditure? In which case, who will we tax to pay for defence or our MPs and civil servants? Now that’s interesting…

The Gordon Brown Interview

Having just watched Andrew Marr’s interview with Gordon Brown, one can only surmise that it was a valiant stand by an outgoing prime minister. Whether his successor will be Labour (after an ousting) or Conservative (after the general election) has yet to be decided.

The Markets

Try as GB could to wriggle out of it, the fact remains that he was Chancellor of one of the world’s largest economies at a time of severe largesse.

  • Does anyone recall GB’s bemoaning the erosion of T1 capital at the financial institutions?
  • Does anyone remember the ‘prudent’ chancellor criticising a bonus system which was not in sync with the actual profit line?
  • GB tried to stoke the housing market when all sane people were suggesting that a neutral approach was the minimum that should be taken.

In fact he was too happy to accept their contributions to the Treasury, wasting much of the funds, particularly over the last four years.

The Personality

GB gave the diplomatic two fingers to those in his party seeking to unseat him. After all, his successor would only have a maximum of 18 months to cement a personality and policy upon the British public. He also stole Tony Blair’s line about being just an ordinary guy. GB’s never had a real job! Politics is not a real job.

The Result

Andrew Marr tried to corner GB but GB always had the upper hand in language if not in substance.

Score Draw.

Stamp Duty Axed for a few

Now I have nothing wrong with the idea of stamp duty. Indeed it is the only thing that Gordon Brown did to try to rein a rampantly overheating housing market but this current action is just pathetic. Where is this money coming from? Nick Robinson provides us with an idea:

Did anyone see Hazel Blears on the BBC this morning? This woman is a prefect example of the sycophantic drivel which we need to vote out. When will politicians look for long term solutions and not headline grabbing shortemist exercises?

  • Do not try to stimulate a market which all unbiased bodies suggest is at least 20% overvalued as at September 2008.
  • A labour government should be concentrating on ensuring that mortgage holders are not hounded out of their homes by banks eager to recover funds.
  • They should be working with international bodies to create a Basle III or II.5 ensuring an increase in Tier 1 capital so that we don’t have our banks gambling this madly again.
  • They should also ensure that we never get to the stage where the nation’s people get themselves into a tulipesque market decoupling the idea of a first house being a home and not an investment.

September 2008
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