I hear this morning he is drawing up a list of companies that the government would need to assist if they get into financial difficulties.
PLEASE DON’T. Such a list could only be damaging. If it got out it could start a run on the share prices of certain companies. It will divide the business world into the elect to be saved and the reprobate to fail. The last thing we need is such a division, and such back handed help.
Please also remember that now the governemnt owns RBS it is very overstretched financially itself. There are limits to how many commercial companies can be bailed out by a government planning to borrow over £150 billion this year already.
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November 29, 2008
Wise words indeed. Mandelson is seeking what he thinks is easy political kudos but as usual with this crowd he hasn't thought through the consequences of his actions.
November 29, 2008
So who leaked this and when are they going to be arrested?
Sounds like when Brown announced he intended to flood the market with gold and destroyed the price and encouraged short sellers.
Remind me exactly what business the new business secretary is experienced in? (words left out)This is the problem with Labour; they think they know without having any experience or knowledge, like Brown and Blair pontificating about business to the CBI, never having been in business themselves.
Chin up though, Mandelsons incompetence and flair for messing up looks set to get them all into more mire and he is following his usual MO, i.e. good start followed by (…) collapse.
November 29, 2008
I sometimes wonder if the government could become anymore inept. They always come up trumps with a crazy new scheeme to appall me.
Don't do it, the splippery road to ruin awaits.
November 29, 2008
Here we go. They're at it again, 'picking winners'. Classic socialist dogma. They continue to believe, against all the eveidence of history (and by history I mean the whole of time up to 5 minutes ago) that they have some divine knowledge on how best to run everything and can decide exactly what enterprises ar the ones that wil be 'winners'.
Mind you the fact that they have also so ruined the economy and distorted it with bonkers tax policies does leave us with the dilemma of outfits like JLR that prodice world class products being forced out of business by the mistake of government. In which case some sort of help might be justified. In my view the first contribution should be made by sequestering all of Brown Darlings personal wealth and handing it over. It might focus their minds a little bit if their personal circumstances were at risk from their decisions.
Actually it probably wouldn't.
November 29, 2008
Can we also really believe that their is not a heat map of marginal, must win, constituencies, being super imposed on business locations ? ( After all they did this with health. )
In one year Brown's Labour party could undo the hard earned progress of the last 30 years.
November 29, 2008
As I said previous, political intervention in markets always causes discontinuities; you would think an ex trade commissioner would know better. The market guys will already be sifting through every speech he has made, looking for clues to his – labour marginal constituency – favourites.
Your post JR, is spot on as usual, but I suspect governments will not be able to resist intervening into market systems that are much much bigger than they are and populated by bigger brains.
I think this FSU article sums it up for me, there is still a lot of toxicity out there.
http://www.financialsense.com/fsu/editorials/2008…
November 29, 2008
Since one of the factors is the number of people employed what we will see is that the elect (very good term John) will all be large, politically connected, respectable already blue chip companies or else windmill producers. I can think of little more likely to stiffle innovation.
On of the factors in the sharp decline of GB inm the Victorian era compared to the US & Germany was that we had a culture where onvestment went to blue chips or "railways in Africa" rather thasn technically innovative stuff.
November 29, 2008
John,
Firstly, Darling must be as aware of the perils as your good self.
A regime focussed on controlling banking institutions by nationalization will allow labour to select 'politically' which people are financed for profit and survival and which will be 'left to perish' – at the expense of hardworking taxpayers.
Labour's contempt for democracy – any form of opposition is as unprecedented as the debts it continues to rack up against taxpayers. Our nation is barely recognizable from the flourishing, peaceful, free enterprise democratic ethos when 'new' labour took over. The clenched fist grip of labour 'unionism' has existed for 11 years concealed beneath a velvet glove.
Totalitarism in place of democracy is believed by many to be the aim – to this end amid media spin and manipulation, control of the banks is essential. The long delayed Lloyds (free enterprise) independent takeover of HBOS will, many believe, not happen because Lloyds, not labour, will control it's finance
The silent and increasingly unsubtle war on free speech, free choice and free enterprise – democracy – is escalating. Many commentators note labour has the BBC 'on side' – the press used for disinformation. Mandleson & Campbell are 'busy' in the process.
November 30, 2008
Apologies – 'Darling' should read 'Mandleson' (although my comments are applicable to both).
November 29, 2008
Take my advice……'cos I'm not using it.
This is rich coming from you John. When you were Secretary of State for Wales you turned your back on a construction industry that was going through a similar recession in the early 1990's.
Your government of the day stopped spending on construction and doomed a large sector of the construction industry, just as the present government's hated tax on empty property is compounding the present problems facing the construction industry. David Flood rateablevalue.co.uk
Reply: NOt so. When I was Sec of State we brought forward substantial public and private investment, including the second M4 crossing into Wales and the Cardiff Bay development
November 29, 2008
This commonsense statement will, I regret, not be listened to. And, with the government record of leaks, no doubt, it will be published in the near future too!
One thing I would really welcome, if you could find the time, please, is to explain the government debt.
I hear 4% (of what exactly?), 47% (again, of what, exactly?), one billion, and even one trillion all mentioned in the same article sometimes! What is going on? How much is the national debt and what are all these percentages being bandied about so freely?
Reply The percentages are of total annual National Income. The government understates it at around 40% whereas full counting takes it to over 60%, or over 120% with pension liabilities.
November 29, 2008
Mike, see attached
http://www.marketoracle.co.uk/Article7526.html
November 30, 2008
Thank you for a superb summary – fair and understandable! Much appreciated.
November 29, 2008
It seems the government has set itself on course to introduce a body of state capitalism come-what-may, Brown's bridge-burning is driven by the certainty of electoral defeat and a gut wrenching panic that the Blair years did not extend the state to a sufficent degree. This is a last-gasp attempt to impose the state on all of us before facing a generation in opposition.
The leading lights in the Labour government fail to understand the underlying cause of this recession, namely the collapse of credit-fuelled demand. The old economy now must be allowed to die along with the debt that fed it.
All focus must now be on preparing for the post-recessionary economy with the emphasis on stability. The government can't buck the recession, their childlike naivete is staggering, exemplified by the fact that the 'full employment' claim has returned to the official Labour website after having been laid off for a while.
December 1, 2008
Well John the two schemes you mentioned no doubt did good for the construction industry in South Wales. But it didn't do much for North Wales which just ground to a standstill. The pain I felt making my fifty long term employees redundant stlll stays with me today. Talk is cheap, but policy can be expensive when it's paid for with peoples jobs and livelihoods, and family businesses that took generations to put in place. David Flood david.flood@rateablevalue.co.uk
reply – the infrastructure schemes did good for the economy as a whole, as did the improvement of A55 expressway in the North.