The One Eyed Man is King Among the Blind
Posted: October 13th, 2008 | Author: Maha Rafi Atal | Filed under: Britain, Economics, Politics | Tags: Gordon Brown, Great Recession, Labour, UK elections | 1 Comment »Gordon Brown may have saved the world economy. Whether he can save his own career is still an unknown:
Last week, Brown unveiled his plan to combat the credit crisis: a transfusion of capital into UK banks in exchange for stakeholding rights, new requirements on lending practices, and government guarantees on inter-bank loans. Watch him explain the plan here. After a month of US and European governments waffling over the correct measures to take, after an American bailout package that passed but remains unpopular and unimplemented, Brown’s plan just made sense. As of today, those same European and US leaders are signing on to follow Brown’s lead.
Given how disastrous Brown’s run as PM has been thus far, it’s hard to understand where this stroke of genius came from. Until you take the longer view. As new Nobel winner Paul Krugman reminds us today, Brown is the economic brains behind the British revival that Tony Blair so often took credit for. While Blair travelled the world winning new political allies for Britain with his charm, the man behind the New Labour economy was the old curmudgeon from the University of Edinburgh, a former Blair rival who was blind in one eye. Blair was the better politician, but his Chancellor of the Exchequer, Brown, was the policy wonk.
So when the uncharismatic Brown took over for Blair last summer, and had to face political–as well as financial–responsibilities, he self-destructed. Despite valiant attempts to rebrand himself, his poll numbers have gotten worse every month since he took office…until now. That he might turn those numbers around with a policy that effectively nationalizes the banking sector suggests the final undoing of the free-market Thatcherite proposals that Brown and Blair were elected to reverse in 1997.
The question now is whether these nationalization policies can have their real economic effect (can “trickle down,” to borrow a phrase,) in time for the next elections.
If Paul Krugman says something, it must be true 😉 It’ll be a tall order to overcome the major structural advantages the Conservatives have built up since Howard took over – good central communications operations, better systemised constituency organisations and vastly increased funding (courtesy of Michael Ashcroft and his investor friends), but things are certainly looking up.
I’m not sure Blair and Brown were elected to ‘reverse’ the economic pillars of Thatcherism though. Much of the rhetoric about ‘boom and bust’ economics we heard after 1992 was reflective more of popular antipathy towards some of the worst excesses of the neoliberal model rather than deficiencies that existed within it per se. ‘Soak the rich’ talk by labour stalwarts was an anathema to most people during the late 90s(think of the public hounding Claire Short received when she echoed something similar on the eve of the 97 election) and even when the leader of the Socialist Campaign Group of Labour MPs went on TV to argue for some sort of nationalisation of the banks *last week* he was treated with a lot of contempt.