We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

He really did mean “the world”

I think I know best, too, of course. But what I know best is that the world is too complicated for me or anyone else to rule. Other people are generally better placed than I am to decide what is good for them. Even when they are not, nothing gives me in particular the right to impose my ideas.

Gordon Brown is one of the elect (not just the elected) who knows no such restraint.

The Prime Minister: The first point of recapitalisation was to save banks that would otherwise have collapsed. We not only saved the world— [Laughter . ]—saved the banks and led the way— [ Interruption. ] We not only saved the banks— [ Interruption. ]

Mr. Speaker: Order.

The Prime Minister: Not only did we work with other countries to save the world’s banking— [ Interruption. ] Not only did we work with other countries to save the world’s banking system, but not one depositor actually lost any money in Britain.* That is the first thing.

Having contented himself that he only saved world banking, Mr Brown has now set out to work on the rest of the job. He has started on a mission to create peace between Pakistan and India – two countries that have not had a war since 1971. Such is his supreme diplomatic tact that his approach after the Mumbai massacre is to visit the region in order to announce that “Three quarters of the most serious plots investigated by the British authorities have links to al-Qaeda in Pakistan.” A claim that is both occult (full in equal measure of secret authority and meaninglessness), and calculated to make people in India more hostile to Pakistan.

Maybe this is not a record breaking sprint to megalomania for a British Prime Minister. Perhaps it is that Mr Brown’s nostalgia for the 1970s knows no bounds. Having destroyed the British economy in order to become its saviour, he is trying the same trick on the global village.

*[This is a lie: I know personally several depositors who between them lost many millions in Britain when Mr Brown decided to expropriate the Icelandic banks. Even those among them whom the Treasury has made a vague promise to compensate have yet to see a penny, and have had the huge cost, which is unlikely to be refunded, of arranging indefinite bridging finance in near-impossible borrowing conditions.]

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11 comments to He really did mean “the world”

  • “The Man Who Would Be King”. Normally it takes at least a couple of years for a Prime Minister to the get bored with Britain.Fortunately for us,Brown has speeded up the process.

  • Johnahan Pearce

    There is no nice way to put this: Gordon Brown is mad; I mean, certifiabily, “men in white coats” mad.

  • Gordon Brown is mad; I mean, certifiabily, “men in white coats” mad.

    I actually think that is now true of the entire governing class, in and out of Parliament.

    They make so many statements so divorced from reality(Link) that they would have to be clinically insane to imagine that we believe anything we are told.

  • Paul Marks

    “Is there really a problem with the banking system” – sadly yes.

    Nor is it confined to the United States – for example the pressure to rescue A.I.G. (the giant insurance company) was mostly from European governments who rightly believed that a lot of European banks would collaps if A.I.G. did.

    Lending out money above the level of real savings (i.e. that part of their income that people choose NOT to consume) is against reason and must end in bankruptcy.

    That is the boom-bust cycle of the 19th century.

    Even turning home loans into securities and trading them is not new – it has ended in collapse six times (in the United States alone).

    What having a central bank (such as the American Federal Reserve system) does is to make the credit bubbles much bigger – and therefore the busts much bigger as well.

    Presently the Fed (and the rest of the powers that be) are engaged in throwing the kitchen sink at the financial system in order to prevent a bust.

    All they are in fact doing is putting off the bust – and making even worse.

    Want to prevent a bust?

    Then only lend out money that really exists – real savings.

    In short if a person puts money into a bank it should either stay there “on deposit” (in which case the person would get no interest – indeed would have to pay the bank for looking after the money for him) or be lent out to borrowers.

    But if the money was for lending out it would NOT REMAIN ON THE BOOKS AS ON DEPOSIT – in short the person who gave the money to the bank WOULD NOT HAVE THE MONEY ANY MORE – till when AND IF the bank was paid back.

    The complex fractional reserve games (of different people supposedly having the same money at the same time) lead to an expansion of bank credit (M3 or whatever) way above the Monetary Base (the notes and coins) and such a bubble must burst sooner or later.

    Again all that Central Bank intervention does (such as “Alan Greenspan saves the world” – a headline I read every few months from 1987 to 2007) is delay matters and make them worse.

    Of course one could just print more money and GIVE it to the banks – so that their reserves actually covered their lending.

    But such a thing would make things worse – if the banks were then told (as they always are) to “resume normal lending” – i.e. build more credit bubble pyramid castles-in-the-air.

    Bottom line:

    In a real free market if one person wants to borrow 100 Dollars (or Pounds or whatever) a person or persons must lose 100 Dollars till when and IF they are paid back.

    Not a Dollar less.

  • Paul Marks

    “Is there really a problem with the banking system” – sadly yes.

    Nor is it confined to the United States – for example the pressure to rescue A.I.G. (the giant insurance company) was mostly from European governments who rightly believed that a lot of European banks would collaps if A.I.G. did.

    Lending out money above the level of real savings (i.e. that part of their income that people choose NOT to consume) is against reason and must end in bankruptcy.

    That is the boom-bust cycle of the 19th century.

    Even turning home loans into securities and trading them is not new – it has ended in collapse six times (in the United States alone).

    What having a central bank (such as the American Federal Reserve system) does is to make the credit bubbles much bigger – and therefore the busts much bigger as well.

    Presently the Fed (and the rest of the powers that be) are engaged in throwing the kitchen sink at the financial system in order to prevent a bust.

    All they are in fact doing is putting off the bust – and making even worse.

    Want to prevent a bust?

    Then only lend out money that really exists – real savings.

    In short if a person puts money into a bank it should either stay there “on deposit” (in which case the person would get no interest – indeed would have to pay the bank for looking after the money for him) or be lent out to borrowers.

    But if the money was for lending out it would NOT REMAIN ON THE BOOKS AS ON DEPOSIT – in short the person who gave the money to the bank WOULD NOT HAVE THE MONEY ANY MORE – till when AND IF the bank was paid back.

    The complex fractional reserve games (of different people supposedly having the same money at the same time) lead to an expansion of bank credit (M3 or whatever) way above the Monetary Base (the notes and coins) and such a bubble must burst sooner or later.

    Again all that Central Bank intervention does (such as “Alan Greenspan saves the world” – a headline I read every few months from 1987 to 2007) is delay matters and make them worse.

    Of course one could just print more money and GIVE it to the banks – so that their reserves actually covered their lending.

    But such a thing would make things worse – if the banks were then told (as they always are) to “resume normal lending” – i.e. build more credit bubble pyramid castles-in-the-air.

    Bottom line:

    In a real free market if one person wants to borrow 100 Dollars (or Pounds or whatever) a person or persons must lose 100 Dollars till when and IF they are paid back.

    Not a Dollar less.

  • RW

    Guy, I take your point that Gordon lied. However, who in their right mind would have put money into the Icelandic banks? And by the same token, into the Turkish or Indian banks who were offering high rates of return? Or even Northern Rock, a complete bunch of shysters? NR were obviously “too clever for their own good”, always offering savings products which topped the comparison tables because of their entry rates, when the small print showed that they rapidly dropped down the league.

    Let’s face it: a basic investment rule is that greed may be good but is not sensible. Witness the latest Ponzi scheme collapse.

  • Gareth

    One factor that may or may not be important in the craze of precariously high interest, Ponzi savings is the interference of the State. The FSA granted licenses to the banks. The FSA failed to see how exposed some of the banks were. The Treasury were happy to nobble the Bank of England. The Bank of England was happy to be neutered.

    Incompetent authority and trying to regulate away the risk led both the State and the People to become horribly complacent. The Banks too were short sighted in offering such easy credit.(And why would they stop seeing as the FSA never queried it) We trust our Government to be competent. For the amount of money they take from us they bloody well ought to be but they are not.

    Our Government is so disjointed the right hand believes the lies of the left hand.

  • Nuke Gray!

    You should be grateful that someone is prepared to save the world! And aren’e you glad to find out what happened to ‘Flash’? He escaped from Mongo and got back to Earth! Hurray!!

  • guy herbert

    RW,

    However, who in their right mind would have put money into the Icelandic banks?

    The people I’m referring to were getting commercial banking services, not fancy deposit rates. They didn’t put their money into Icelandic banks; an Icelandic bank bought the financial institutions they were already using, and would have sold them intact, had the UK government not decided to go for a grand gesture. If your bank actually goes bust then that is tough but acceptable – so it goes. If your bank is bust by grandstanding government action, then that’s another matter.