Monday, October 13, 2008

Now let's get ready for the real problem....

Cecil Parkinson was the father of the "Big Bang". I remember this point being put to him in an interview once and he agreed, without any obvious concern for a potential paternity suit.

So that was...deregulation of the city...let the devil take the hindmost...big bonuses....trebles all round...London rules the world.

And how has it ended?

I have noticed a lot of ordinary people being worried recently. Don't be. The whole tiswas of the last few weeks boils down to dodgy plumbing. Banks didn't want to lend to each other and the LIBOR (London Inter-Bank Offered Rate) went sky high, thereby seizing up the system.

In one sense, this had nothing to do with any actual value-add activities in the real economy. Activities that produce products or services (aside from loaning money). That sort of thing.

But of course, it was starting to impact the real economy through scarcity of loans.

So we were in danger of disappearing down an economic black hole - all for the want of a financial plumber to stick his squeegee down the drain and sort out the faulty ball cock in the banking system.


And so, we've now had, if Will Hutton is right, the largest spate of nationalisation in British history (Hutton said on BBC News that what is being done now is far greater than what was nationalised in any one year of the forties under Atlee).

So, Socialism bails out capitalism. On the other side of the Atlantic, George Bush ought to be wearing a beret and shouting "Power to the People!". He is, after all, now the most socialist President in US history, with the arguable exception of FDR.

So, now let's get ready for the real problem.

When the oil runs out.

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