This is easily the best explanation of the causes behind the credit crunch I have come across. It also contains staggering facts regarding the financial bomb that the government has put in its pocket by nationalising certain banks and buying large numbers of shares in others. Iain Macwhirter seems to rock with pleasing consistency. Why is he not occupying 11 Downing Street?
"The shadow banking system is an imponderable black hole of financial loss. According to the Institute for Fiscal Studies, the liabilities from RBS alone could add £1.8trn on to the public debt, taking it to £2.5trn. Britain's GDP is only £1.4trn. These are terrifying numbers. Be in no doubt: if all the liabilities of the UK banks fell on the state, Britain could find itself in the same predicament as Iceland. Our economy is actually very similar, only on a much larger scale."
Of particular interest are the comments that reveal that the two main architects of Gordon Brown's bank bail-out work for Standard Chartered Bank: Peter Sands, the chief executive and Richard Meddings, the finance director. The story is laid bare int his Torygraph article. Clearly, with the extensive dithering that Brown et al were doing prior to the announcement of this plan they hadn't the faintest idea how to tackle the crisis themselves. Forgive the lapse into trite cliches but it seems that the lunatics really are in charge of the asylum.
I just managed to track down this comment from a recent CiF article:
I really, really like this because it highlights the disparity between government and industry that I feel has been the driving force behind the erosion of much of our social values over the last fifty years. When disparity between commercial and civil salaries reaches the orders it currently has there exists no incentive- nor even any potential whatsoever- for civil service to compete in a war of ideas with the resources and talent the commercial sector can bring to bear. This is essentially why the CBI runs the Labour government: Whitehall has simply been infiltrated by "sleepers" who no longer even bother to hide their joy at flitting through the revolving door to spend a handful of sleepy years prowling the corridors of power and 'leveraging their clients' before spinning back through it again to land comfortably on the directorship gravy train with a pleasantly plump list of contacts in their diaries and the inside scoop on how to squeeze ever fatter contracts out of future governments through the Old Whitehall Boys' network.
"PFI and an ocean of money wasted on management consultants are the symptoms, and the cause is specifically the fact that the Cabinet, the Government and the Labour Back Benches are stuffed with [Peter] Hains - people with no skills, no qualifications, no management experience, nothing of any value except a finely-honed talent for greasy-pole climbing. People who have never had a proper job in their lives, and who are entirely unfit to take charge of a complex government department.
Look at Patricia Hewitt. Prior to being feather-bedded into the House of Commons, the highlight of her career was seven years' loyal service as Neil Kinnock's lickspittle (she did spend two years working for a Charity, but I'm willing to bet a year's earnings she wasn't doing anything worthwhile like running a shop). On the basis of this towering achievement, she duly found herself in charge of the third biggest organisation in the world.
They are all basically the same, and they're all basically spivs - fourth-rate spivs at that. I can just see them all sitting blinking like stupid owls while some hapless middle-manager tries to explain something about Supply Chain Management or Finance.
No wonder they're an easy touch for the first-rate spivs from the management and IT consultancies, who've spent decades honing their sales and presentational skills on tough clients in the private sector. The guys who get their hooks into the public sector must be wearing grins like water melons."