It's all the banks' fault. They were "greedily manipulating a stable economic environment created by New Labour to convince borrowers to take out excessive home loans and ramp up house prices.
The banks distorted the market. We gave them stability the very thing that they had been asking for for decades. The instability [we have now] came from the market itself.
What happened here is just total greed. [The banks] were the ones that introduced the instability into the market when I was doing everything to make sure government didn’t give them instability."
Yup. As always, it takes one to know one, and when it comes to world-class guzzling, Prezza's your main man.
But beyond his ridiculous outburst of unself-awareness, Prezz has put his fleshy little digit on a key point about the left's approach to markets. Fundamentally, they are dangerous and operate against the public interest.
Far-sighted benevolent politicos, such as his good self, literally bust a gut to give the markets stability, only to have the markets repay them by introducing instability! Markets are selfish, and full of greedy people who don't take any notice of the Five Year Plan. They are not to be trusted. They should be sent for re-education.
A few points:
- Governments can certainly make economies unstable (as demonstrated repeatedly during Tyler's lifetime), but if Prezz and his fellow commissars ever really believed they'd made our economy stable, they were extraordinarily arrogant and naive: no governments have ever managed that... except arguably in nil-growth command dictatorships
- Labour's economic boom was entirely built on ballooning debt - public debt, private debt, the housing market, and the explosive growth of the City: if the banks hadn't lent so freely, there'd have been no boom
- The banks must shoulder a big chunk of "The Blame" - which of course is why they must not be bailed out - but the government's half-baked regulatory system is also squarely in the frame, and so are all those Property Ladder punters who mistook cheap debt and house price mania for their very own Midas touch.
- Occasional downturns do not mean the system is bust - that was the mistake Western governments made in interpreting the thirties depression, which, via "full-employment Keynesianism" eventually consigned us to the disastrous 70s.
And as for Prezz recasting himself as the Master of order and stability, IIRC he was the one who presided over a shambolic mega-department that stopped all road building projects and totally failed to meet the housing challenge posed by Labour's open-doors immigration policies.
WTF can't he just go away?
PS Talking of housing policy, just remember the numbers: Brown has just restated his promise to build 3 million new homes by 2020, which is c 250,000 pa. When last sighted, actual production had slumped to 167,000 pa (England, 12 months to Dec 2007, starts). The highest ever annual production under Labour was 184,000, and most of the time, it's been under 160,000:
It's likely to fall much further this year. One other point - these 3m new homes would not be required if Labour had not admitted 2.2m net foreign migrants.