Swollen-headed and empty-handed as always, our Leader has overstepped the mark. He has questioned Bretton Woods. Worse, our bombastic Prime Minister has come up with his detailed proposals for a Bretton Woods' replacement; a new regulatory regime, global in its scope and transparent as gossamer.
There are no circumstances in which the United States will put up with their banking system, indeed any part of their life-style, being regulated by non-Americans. The dollar remains at the centre of the global economic system. It is there too because it is part of the development pull that is creating emerging economies.
Sterling, though, is far too weak a currency to be used any more in the swollen deregulated aspects of that system, dilapidated as it is by loss of empire, costs of war, and its very use in the deregulated system itself. This last has led to the collapse of real national economic capacity, and the desperate efforts to involve others in propping up London as a centre of financial dealing, with sudden demands for regulation, colleges of oversight, and the demeaning flights from capital city to capital city begging for funding for the International Monetary Fund - after all, how much is it going to cost to bail out the United Kingdom?
The results of these perverted New Labour policies, the promotion of London as the unregulated off-shore financial casino are:
- the creation of a desperate dash by most of the grossly overtaxed indigenous population into the deregulated sector - in the particular case, housing, where no tax or easily avoided tax was on offer to small, individual investors.
- the massive diversion of investment from industry and manufacturing into various bubbles in the deregulated sector, leading to the collapse of UK industry and manufacturing.
- an insupportable balance of payments deficit masked by the flexible exchange rates that removed external disciplines on nation states' economic adventures, or perhaps adventurism - a measure which had been required (and justified as right) to enable the United States to continue running its huge external deficit and thus fuel economic growth in emerging economies.
The political, democratic effects of all this in a country with such a consensual and notably fragile constitutional and legal system as the United Kingdom are devastating. They threaten any attempt by the people, from voting to insurgence, to overturn this now-embedded structure.
Under the cover of seeking IMF funds, hundreds of billions, from the Arab states and from China, there is the special pleading for the UK to be bailed out directly so as to avoid the embarrassments of IMF strictures, cutting of public expenditures, raising of interest rates, etc. suffered, at Brown's instigation, by Iceland.
Statements like, "I believe it is possible in a very short period of time to create an international fund that is strong enough to help withstand the difficulties. It is in every nation's interest and in the interests of hard-working families in our country and every country that financial contagion does not spread.", expose us all to ridicule, as Brown holds out the UK's begging bowl to China and the oil rich states of the Gulf.
Either America yields its central position, its own interests, and those of countries deeply co-involved in the dollar, or New Labour has to yield its City milch cow, its client state, its very existence. That's all the Saviour of the World posturing is about. Saving himself.
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2 comments:
You deliver a hammer blow, HG.
The meeting at the weekend is premature, S. It should be a meeting of sherpas preparing common ground and laying out common objectives. The President-elect has declined to be there, which means nothing holds.
Bretton Woods was, and is the counterpart of Nato, devised and instituted to prevent the advance of state economies, of socialism and communism, with the United States at its heart, after the War made the West so vulnerable.
Of course it needs updating. The standard dollar is creaking under the strain, though holding up well right now, and there might well be some means of representing major world economic powers and their interests in a revised structure. That's the yen, euro, rupee and renmimbi then - not sterling.
The European Union, China, India, Japan, or the Gulf States, or Russia for that matter, have no more interest than America in adopting any 'British' strategy aimed at saving sterling and its place as the unregulated face of international finance.
Brown's interest is essentially one of propaganda and pretending that whatever is decided was initiated by him - as Saviour of the World, of course. But it won't be. It can't be because it's all over for the biggest offshore, money-laundering, tax avoiding, fiscal secrecy, casino on the planet. And he ran it.
Brown's desperate; and he's also sounding very silly indeed, when his attention should be turned to facing the reality of the disaster he has brought upon the UK in his decade of chancellorship, and preparing to give way to other, more competent governance, via a general election.
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