Why It’s Not Our Fault. Honest.
A website designed to show the government offering ‘Real Help Now’ for the economy is an exercise in blame-avoidance.
There have been many complaints that, while the UK government talks endlessly about assistance for struggling businesses, nobody seems to know how to take advantage of what is on offer. In an effort to redress this information shortcoming, a new website – Real Help Now – has been launched to publicise the various schemes created in the past few months. In reality, though, the site seems to be more about offering ‘Real Help Now’ to the floundering Labour administration.
The spin begins at the top of the homepage: ‘Action is being taken all around the country to help the economy come through the recession sooner, stronger and fairer. Click to find out what’s going on where you live…’ Actually, when I first viewed the site, you couldn’t read these words because the clickable map was floating over the top of them. Such techie foul-ups are what you get when you do a rush-job website because the Downing Street press office has suddenly decided you need one. Still, it reminded me of that Conservative election slogan from 1979: ‘Labour isn’t working.’
So what is happening? Apparently, Grimsby businesses and workers are being encouraged to find out how they can ‘survive and thrive’ the recession with a two-day programme of events to be held at the local football ground. The secretary of state for Wales has attended the fourth All-Wales economic summit. (This seems to be the only thing that is happening in Wales, which must be a worry in the valleys.) There’s £1.5million for new businesses in North Tyneside… over the next three years. And stop those cruise liners from leaving port: the Cabinet is meeting in Southampton today. The locals must be soiling themselves with excitement.
Er… is that it? When the Emperor is wearing his new clothes, he’d be better off staying out of the public eye. In the face of an economic shitstorm, the government seems to have given us a website full of development agency and Downing Street press releases with next to nothing with the scale or imagination that might help to turn matters around.
But wait! At the bottom of the page are three links explaining how we got here, how we get out of here, and what the future looks like, apparently written by UK prime minister Gordon Brown himself. This is Her Majesty’s Government’s Official Explanation for Why Things Have Gone Tits Up, also known as Why It’s Not Our Fault, Honest. It’s the Americans Wot Dunnit.
Brown starts with an analogy about why the banks needed saving. ‘Perhaps the simplest way to explain it is by talking about electricity. Just like everything gets difficult for you in your house when the electricity stops flowing, everything gets difficult in the economy when the banking system stops working. So it was really important to save banks, because that underpins everything, just like electricity does in your house. But once the credit crunch and the banking collapse had done such damage to the system, it wasn’t enough for us to flip the trip switch and hope the electricity would start flowing again.’
A more honest approach would be: ‘In recent years, everyone decided it would be a really good idea to wire all the people in the house together. That way, if someone decided to shove their fingers in a power socket, we would just get a tiny little electric shock because the juice would be so spread out among lots of people. That turned out to be completely wrong, which is why I’m writing this from the emergency room.’
More technically, we have the standard explanation that the problem all started with sub-prime mortgages in America and the buying and selling of associated assets. Unfortunately, we are told, there was a ‘failure of regulation’ that allowed things to get out of hand. That’s not Gordon’s fault, though, because financial services is ‘a sector that moves really fast and whose companies and firms have a global reach, so there’s always a time-lag between an innovation in financial services and the ability of a national regulator to make and impose rules that cover it’.
Brown adds that ‘I’ve been saying for the past 10 years that we need better regulation and global coordination’. He fails to mention his previous boasts – as recently as his Mansion House speech in June 2007 while he was still chancellor of the exchequer – about how Britain’s so-called light-touch regulation has enabled it to do so well out of handling other people’s money. The truth is that there has been lots of new regulation of the economy in the past 10 years, but alongside a massive, government-sponsored expansion of credit, both public and private, in an attempt to prop up a rather anaemic economy.
The way out of the mess, according to Brown, is to save the banks (while sacking the bosses); spend more money to boost the economy; get lending back up to previous levels. There’s nothing wrong with doing any of this at a time of crisis, but it amounts to nothing more than fire-fighting. It’s the lack of follow-up that is worrying. So Brown’s big vision is to state that the government is committed to ‘creating a digital Britain, to low-carbon technologies, and we’re investing in the creative industries, in advanced technologies and science, in new manufacturing, pharmaceuticals.’ This hi-tech, high-value future is just the kind of meaningless guff that governments have talked up for years, but it has remained no more than a small fraction of the overall UK economy.
For all his talk about how he got it right all along, Brown seems to be backtracking on previous policies. For example, having made a song-and-dance about buying shares in banks rather than pursuing the American idea of guaranteeing bad debts – ‘toxic assets’ – from the banks, the government is now planning to… guarantee toxic assets held by the banks. This is a government reacting to events rather than providing leadership or vision. Sadly, the political opposition at Westminster seems little better.
In truth, the UK economy has been stumbling along for 40 years, mainly because of broad, systemic problems shared by most Western economies that can’t simply be legislated away. The fact that the past decade has seen steady but unspectacular growth is in part due to a lack of internal opposition to the market economy, combined with a flow of cheap debt that was always likely to end at some point. What is needed now is some direction and leadership to get the best from a bad situation. But the British political class seems incapable of providing it.
Wider problems aside, and given how Brown once crowed over those ’64 quarters of consecutive growth’ as if they were a reflection of some economic genius on his part, it is fair enough to throw the state of the British economy back in his face. Gordon, your economic miracle is a Real Heap Now.
Rob Lyons is deputy editor of spiked.
It takes more than money to revive the economy, by Sean Collins
Why rate cuts stir so little interest, by Mick Hume
The Crisis With No Name, by Frank Furedi
The ‘credit crunch’ and the SAD economy, by Phil Mullan
The state won’t be the saviour of the economy, by Frank Furedi
This Marxist isn’t laughing, by Brendan O’Neill
Against austerity, by Brendan O’Neill
There Is (still) No Alternative, by Mick Hume
Congress bales out, by Brendan O’Neill
I don’t predict a riot, by Mick Hume
Bashing the bankers can make you go blind, by Rob Lyons
It’s the politics, stupid, by Phil Mullan
Lehman Brothers: when confidence runs out, by Rob Lyons
Five myths about the Wall Street crisis, by Daniel Ben-Ami
Read more at spiked issue: Financial Crisis.
To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.