Sunday, September 16, 2007

Cameron, Brown, and Northern Rock

David Cameron has written in the Telegraph today to point the finger of blame at the current financial difficulties at Gordon Brown. His key points are that financial regulation is a matter for government and that Brown as Chancellor allowed both government and personal debt to rise unsustainably, making the economy fragile in the face of shocks of the kind we are now experiencing. He is right on all counts, and he deserves credit for putting a strong marker down that this is a political issue as well as a matter for the markets, especially if things take a turn for the worse. Brown should not be allowed to weasel out of his culpability in the general situation, and specifically on the Bank of England's approach to the credit crunch, which has been to place financial virtue above helping people out. I am sure that Northern Rock's customers are especially grateful for that hard-edged approach.

Until Black Wednesday the Conservatives had a seemingly unassailable reputation for economic management. They managed to lose it in more or less an afternoon and Labour has benefited ever since. It has been the economy that has kept a serially incompetent and dishonest government in power for a decade. A credit crunch, mortgage hikes, slowing housing market and rising prices are all factors that could contribute to a political paradigm shift, but much as I wish this lot out I wish it didn't have to happen this way.

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