Saturday, 4 April 2009

The Old Disease: Scape-goat-itis

I'm terribly confused about the global recession.

Our illustrious PM assured us repeatedly it was all America's fault with all that sub prime madness. Or though, he didn't seem too keen to repeat this when Nick Robinson asked him about that view in one of the many Gordo and Obamo press conferences over the last few days. Now he seems to be sucking off St Obama every other nanosecond.

OK so not America, really it was those evil bankers seeking fat cat bonuses through reckless lending. Oh and in particular that nasty Mr Fred Goodwin (boo, hiss, stone him). All out for themselves, the bastards. Seize their bonuses. Sequester their pensions. Sell their wives and children.

But now the blame caravan seems to have moved on once again. Now - and forgive me as I have missed the logic here - the G20, who are all led brilliantly by the able and wise Mr Brown, have fingered those evil, Nazi sheltering, international crime riddled tax havens. So naughty have they been in fact we're going and shame them (oooh, awful, how will they cope with the shame).

Just remind me. When exactly did tax havens create the global recession? Was I asleep or something? I'm pretty sure that if they were responsible that nice, balanced and unexcitable Robert Peston would have been whining about it every night for weeks.

No, as ever, the politicians are (a) looking for their latest scapegoat and (b) using the cover of unrelated announcements to roll out their own political dogma.

What exactly have tax havens done? They have operated within the law to assist people pay less tax legally. So nothing wrong so far, then.

Remind me. Who sets the law within which they operate? Oh yes, it's those sanctimonious wankers who want to blame them and curtail their totally legal activities. Let's just recap. The recession was caused by:

1. Too lax a system of government regulation within which banks operated.

2. This allowed them to lend too easily, thus stoking up markets, and the residential market in particular, to crazy, totally unsustainable levels of growth.

3. They also lent too easily to people who could not afford the loans.

4. In fact, governments pushed banks to lend to poorer people so they could boast that they were "attacking social injustice" and "creating social mobility".

5. And just to add incompetence on top of imprudence, governments - ours in particular - built up their own unaffordable debt burden to carry out all their social engineering policies. The regulators had gone native.

6. When the cycle changed, as it always does, there were too many debts, not enough cash and hence recession.

7. Despite Gordy's ridiculously hollow boasts, we are worse off than most and well into IMF territory - according to the IMF - because during the good years NuLab spent more than it earned. Put simply, we were already up to our national overdraft when our tax income began to collapse.

So not America, then. Not actually bankers, who all operated within the laws set by governments. And not really tax havens, who frankly played no actual role in the debacle at all.

In fact, it was shoddy government regulation.

Huh. Haven't heard the brilliant Mr Brown opine much about that, have we?

Wonder who the next scapegoat will be?

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