The Chancellor on the radio this morning tried to persuade me that the "credit crunch" is a random global event, something Britain is best placed to deal with. It's unpredictable, like a lightning strike. It's incomprehensible and scary, like finding piranhas in your toilet bowl.
The British Government wasn't involved. Perhaps not even there when it happened. And it's hitting every country around the world equally.
No. Pure hand-waving. Factually inaccurate. This crisis was spawned by three overlapping problems, two of which the UK Government actually promoted, and the third they merely failed to tackle.
First, it's a housing bubble, and not just a US subprime bubble but a UK one too, egged on by the former Iron Chancellor. Second, and intertwined with that, it's a consequence of irresponsible market deregulation, backed by the same man. Third, it's a resource crunch, which triggered a summer oil price spike, which Brown singularly failed to prepare for by starting to decarbonise our economy.
Also, we're simply not best placed to deal with it. Darling claimed the Government has the lowest debt in the world. I make that the 4th highest in the OECD.
The genesis of the crisis is not a spooky mystery or something that puzzles economists. It was grimly inevitable, given Labour's policies. Their fingerprints are all over this fiasco as it affects us, and the best they can credibly claim is that it might have been worse if the Tories had been in charge.
I give you a vainglorious Brown, from his 2005 Labour conference speech:
"Why has it been that at every point since 1997 faced with the Asian crisis, the IT collapse, a stock exchange crash, an American recession, last year a house price bubble, this year rising world oil prices, why has it been that at every point since 1997 Britain uniquely has continued to grow?
"In any other decade, a house price bubble would have pushed Britain from boom to bust.
"In any other decade, a doubling of oil prices would have put Britain first in last out and worst hit by a world downturn.
"I tell you, it is because with Bank of England independence, cutting debt, fiscal discipline and the New Deal this Labour government has shown the strength to take the tough long-term decisions, that inflation is low, interest rates are low, growth has been sustained in every year, and we are closer than ever to the goal which drives us forward: the goal of full employment for our generation. Labour, the natural party for economic strength in our country today."
Given that Labour was at that exact time actually working to reinforce the instabilities in our economic system, this speech should be understood as the equivalent of standing on the top of a mountain in the middle of an electrical storm, holding a sword over your head and shouting "all gods are bastards".
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