Nearly 20 years ago, after the Tiananmen Square massacres, The Spectator campaigned for all Hong Kong people to be given British passports. Part of our argument was that, if they all had the passports, very few of them would want to come here: they would have the confidence to stay. That, in essence, is the same reasoning that the governments of the Western world are using when they prop up the banks. Banks only lend because they can get their money back, yet if they all try to get their money back, they cannot lend. When they are all terrified, therefore, some external agency has to remove the fear. That external agency has to be government, or governments. I do not see anything very ideological in this. Anyone who believes in any form of state authority at all surely recognises that there are emergencies when government has to cut the Gordian knot. What is true, though, is that ideology will soon stick its barnacles onto the lifeboat. As it grabs the ‘commanding heights’ of the economy, Labour will start issuing political commands. One should also point out how high the hazard is, moral or otherwise. It was for that reason, after all, that the government did not listen to The Spectator about six million Hong Kong passports.
Gordon Brown compares himself to ‘far-sighted leaders like Roosevelt and Churchill’ (not presumably, the Churchill who helped bring on the slump by putting Britain back on the Gold Standard). He is dangerously premature. But it is certainly an interesting political question whether Mr Brown can benefit if he succeeds in rescuing the country from the debacle which he helped to bring upon it. The Falklands war is the example cited: Mrs Thatcher had failed to notice Argentine intentions, thus provoking invasion, but then fought and won, and became very popular. Financial crises are not quite like that, though. Harold Wilson was right to devalue the pound in 1967; Jim Callaghan was right to bring in the IMF in 1976; John Major was right to take Britain out of the ERM in 1992. As a result of their actions, things improved. But the experience was sufficiently painful for the electorate not to wish to forgive the men who had finally been forced into doing the right thing. And in this case, unlike with the exit from the ERM, most of the pain still lies ahead.
So many things are happening in the credit crunch that it seems a good idea to crunch in a few short points:
a. ‘He’s lost £600 million in all this,’ I heard someone remarking about a business friend. It was said in much the same, envious, excited, admiring way that people used to say, ‘He’s made £600 million.’
b. It has been noted that Robert Peston seems to be given stories by the government to put on the BBC before anyone else has been told. The policy would appear to be ‘This is a good day to leak bad news.’
c. No one has quite explained why Iceland’s banks overstretched themselves so much. I think it would be worth examining the role of Russia, and the relationship between Icelandic politicians and Vladimir Putin.
d. It is right that the bank chiefs who failed should not get pay-offs. Why is Peter Mandelson, who voluntarily left his job as European Trade Commissioner to join the Cabinet yet again, getting paid ‘transitionary’ sums by European taxpayers of, some reports say, £1 million? Private sector pay-offs are on the way down, public sector ones are growing.
e. ‘It’s Scotland’s oil!’ say the Scottish Nationalists. They do not say, in the wake of HBOS and RBS, ‘It’s Scotland’s debt!’
f. What a clever word ‘leverage’ is. If we had stuck with the word ‘debt’, we would have had much less of it.
g. One reason there was such a banking panic in the Great Depression was the hiatus between the election of the next President, FDR, and his inauguration. Under the Constitution at that time, this stretched from 8 November (1932) to 4 March (1933). In effect, no one was in charge. Under the 20th Amendment to the Constitution, the President is now inaugurated on 20 January, but that is still a ten-week gap when Mr Bush will be in office but not in power. The elapse of time between the fall of Lehman Brothers and the rescues in the last few days has been four weeks. Ten weeks is a very, very long time in these markets.
h. I am grateful to the Bishop of London for drawing my attention to a text from Psalm 106. When the children of Israel in the desert worshipped the Golden Calf, God ‘gave them their desire: and sent leanness withal into their soul’.
Is there any good reason why the nation should ‘save’ Titian’s ‘Diana and Actaeon’ (and, later, ‘Diana and Callisto’)? The history of buying and selling works of art is just as much part of the flow of civilisation as is the production of art in the first place. The owner is the present Duke of Sutherland. The Dukes of Sutherland got their great paintings through their family connection with the last Duke of Bridgewater, who got them from the break-up of the Orléans Collection at the time of the French Revolution, which got them… If the nation is now getting poorer, perhaps it is time for them to be gone. P.S. Which is ‘the nation’ in this context? The Titians are in Edinburgh. ‘They’re Scotland’s Titians!’ is another cry you don’t hear, now that money is asked for.
TV Licensing (cont’d). The BBC is not, I discover, unique in hounding non-viewers. In Germany, Friedrich Schiller, the author of Ode to Joy, who died in 1805, recently received a demand from the German television licensing authority, GEZ. It was sent to a primary school in Weigsdorf-Koeblitz which bears his name. After the first demand, the school’s head wrote to GEZ to explain that Mr Schiller was ‘no longer in a position to listen to the radio or watch television’ (actually, he never was), but the reminders flowed unchecked.
How one’s heart sinks at the news that the Women’s Institute has issued a video about how to have better sex. ‘We’re not all 85 and knitting,’ says Janice Langley, maker of the video. Mrs Langley is 66, and is shown holding up a French maid’s outfit and looking ridiculous. This column has argued before that there is nothing wrong with ‘jam and Jerusalem’. The nation does not have enough of either, and oldish women who want to know what to do with a French maid’s uniform can surely go elsewhere. I admit that I am not a woman, but I long for a Women’s Institute that is not embarrassed not to talk about sex. I recommend that disaffected members of the Women’s Institute come and join our wonderful sex-free Rectory Society (firstname.lastname@example.org).