Vince Cable is ignored on the ground shouting random directions to attract attention from the crowd. Little can be done to avoid Gordon claiming credit and to be fair, his contemporary version of the Swedish bail-out model was better than the Paulson Plan Mk 1. The Tories plan in their attack to hold off until recession bites and then point the public towards Gordon and give him the credit he deserves for the magnitude of the bust.
Might work, though Gordon will try to pass the buck as ever, blaming Iceland or the non-appearance of the tooth fairy for Britain’s woes. The triumphalism of this week may fade from the public’s memory pretty quick. Danny Finkelstein has nailed it to Gordon, “If this is a triumph, I’d hate to see a disaster“. Fink’s argument needs to be re-scripted in populist form.
In a month or so attack videos need to replay Gordon intoning an end to “boom and bust” over and over again at different times in different ties, than replay him asking last week “has another bank gone bust?”, zooming in slow motion on to that, for once, authentic smile. As recession brings unemployment and repossessions, his self confession to presiding over the age of irresponsibly low interest rates and a failed regulatory regime he designed needs to be drummed into voters – along with Gordon’s smile of triumph amidst disaster.
Tempting odds for a value bet. When you drill down in some of the most likely to vote groups, McCain is strong, older voters for instance. Even if almost all Hollywood stars are voting for The One, they are not that numerically strong. Do you really think this going be a wipe-out for the Republicans?
Billions in future tax payments are being risked to bankers. They are supposed to pay back the debt to the Treasury when things pick up. Hopefully.
The economy won’t pick up until the housing market picks up. Kick-starting the housing market is going to take one helluva kick. In America Obama is talking about a 90-day moratorium on home repossessions and McCain is advocating government-backed mortgage rescheduling, another policy idea doing the rounds is giving home buyers $15,000 tax relief, effectively making a mortgage deposit tax deductible.
Something glaring that strikes Guido as unfair in the British tax system* is that whereas the bank corporations will be able to deduct loan interest payments from their tax bills, individuals can’t. Why not bail-out homeowners too by making their mortgage interest payments tax deductible? Consumers are feeling the pinch, if they could claim the same tax relief that the bankers will, they would spend it and boost the economy. Boosting the economy is key to keeping the recession short. Unlike the banker bail-out this isn’t a handout from taxpayers, it lets taxpayers keep their money flowing into the economy.
*Gordon took away mortgage interest tax relief in 1999.
UPDATE : The comments below from some call this proposal neo-Keynesian, suggest it would re-flate the housing bubble and call it a middle-class subsidy.
The idea that people should be taxed less to promote spending growth is pretty straight forward. Keeping people’s earnings in their pocket to spend promotes growth in a much healthier way than the government taxing their earnings more to spend inefficiently. Some people fetishisise taxes as if they were a good thing in and of themselves. The property market is not going to bubble again in our lifetimes, have no fear. A subsidy is what public sector tenants have, taking less in taxes off people is not subsidising them.
Premier Wen Jiabao said he was very moved when he saw Peter Mandelson drinking a cup of Chinese milk on Friday to show his trust in China-made products. “It’s because he not only sees the present, but the future as well,” Wen said. Oh dear…
Hat-tip : Shanghaiist
Trevor Kavanagh this morning points out that the collapse of Britain’s banks was not inevitable, “it hasn’t happened in Canada, Australia or Sweden”. So much for Britain being uniquely placed to weather the financial storm. Gordon designed the regulatory system, Gordon allowed the property bubble to inflate. Gordon’s bubble has now popped.
Gordon is spinning that he is leading the world, either he is delusional or deliberately lying, in Europe they are calling the EU-wide rescue plan the “Sarkozy solution”. If any country can honestly claim leadership, it is actually Sweden, the EU plan being based on a nineties solution to a Swedish banking crisis. Gordon, for some reason, needs us to believe he is saving the world.
Bercow ‘Wounded’ | Speccie
This Goes Further Than Rotherham | Simon Danczuk
Bercow Mocked | Times
Indy Deletes ‘Jewish Lobby’ Headline | MediaGuido
Cracknell v Boris | Sun
British Muslims are Failing to Integrate | Dan Hodges
Dear Sarah Wollaston… | ASI
Treatment of Ashya King’s Family Authoritarian | Brendan O'Neill
Stop the War Should Disband | Rob Marchant
State Should Not Act as Parent | Kathy Gyngell
Guido’s Column | Sun
“I stab people in the front, not the back.”
Owen Jones says:
We also need Zil lanes.