I caught part of the bankers’ apology to the Treasury Select Committee yesterday whilst pounding the treadmill at my gym. My impression was that the bankers themselves were a lot more dignified than the politicians, who seemed to want to act like a lynch mob. The questioning was lightweight and feeble, of the kind that was obviously trying to score a few cheap points, rather than shedding illumination on what really happened and why.
And, of course, what none of the politicians would admit was that this whole credit crunch has been a systematic failure and that they have been as much a part of it as the bankers. This morning the news that Sir James Crosby has resigned from his post at the FSA, having been undone by an HBOS whistle-blower, merely puts the whole thing into perspective. Crosby was once a chief executive at free-wheeling HBOS and was specifically selected by Gordon Brown as a key economic advisor.
Meanwhile Gordon “I’ve put an end to boom and bust” Brown marches on defiantly, as if this is all a minor irritation. But his economic boasting whilst Chancellor was absolutely central to the national mood to carry on borrowing. He must know that, even if he feels unable to admit it. I suppose that it’s difficult for a politician to own up to gross negligence whilst still holding onto power, but Brown would be far more likeable if he could show a little humility and stop blaming everybody else. He prides himself on setting the Bank of England free to set interest rates back in 1997, but then ignores the fact that he gave them a bogus inflation target to aim at, ignoring as it did both the cost of housing and the mortgage rate. Consequently, the property bubble and its accompanying borrowing binge was allowed to continue unchecked. Keeping Britain out of the euro was meant to give us the freedom to control this type of problem, but it made no difference. Brown didn’t see it coming, any more than the bankers of RBS and HBOS. Only the nutters over at Houseprice Crash called it right. Now how come they aren’t invited to sort it out, now that the discredited Crosby has gone?
We all know that Brown has a blind eye. What we didn’t know was that he depended on it.