Adam Lent

So the global economic summit designed to rethink the world’s financial architecture is going to happen in Washington next month.  The White House said it will be an important opportunity for world leaders to

enhance their commitment to open, competitive economies, as well as trade and investment liberalisation.

Investment liberalisation!?  Isn’t that the problem?  Surely if this meeting should be about anything, it should be about investment regulation not liberalisation.  Let’s hope whoever takes over at the White House does get it.

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Nigel Stanley

Today’s papers are full of the varying accounts of George Osborne’s yachting trips.

But it’s hard not to conclude that his real crime in the eyes of Nathaniel Rothschild is that he has broken the secrecy code of the super-rich, and brought us all a glimpse of their detached lifestyle.

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Owen Tudor

OK, to be honest, Bush’s sanctions on Bolivia are about Bolivia’s alleged failure to control drug trafficking, rather than trade generally. But I’m at a Wilton Park conference on labour/environmental standards in trade agreements, and the irony struck me. At our conference, trade unionists, employers and trade negotiators are disagreeing about whether the World Trade Organisation Doha Round should deal with abuses of the ILO core labour standards. We’ve been told that sanctions are inappropriate for dealing with cases of forced labour, child labour, discrimination and repressing trade unions. But there’s been little outcry at the Bush regime’s withdrawal of Bolivia’s trade preferences because he says Bolivia’s administration hasn’t done enough about the war on drugs.

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Adam Lent

It’s all change and rather quickly.  The Financial Times describes Keynes as a “man in the news” and the Chancellor says that “much of what Keynes wrote still makes sense” as justification for a decision, just announced, to bring forward a range of building projects to boost the economy.  Not bad for someone who’s been dead for sixty-two years – Keynes that is, not the Chancellor.

Of course, much of the sudden interest relates to the outpouring of money from national treasuries to keep financial systems alive.  Keynes, though, was more than just an intellectual spendthrift.  He was also the economist who, more than any other, helped shape the global shift from one economic paradigm to another.  Reading his famous article which was part of that shaping process – National Self-Sufficiency written in 1933 in the depths of The Depression – I was struck by three points which seemed to sum up so much of current debate about the contemporary crisis.  I present them here without comment because they speak for themselves.

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Owen Tudor

New immigration Minister Phil Woolas has spoken out on immigration, and, true to form, has revealed that the brief he’s been given is, as always, to sound tougher than the last guy! He has told the Times that he wants to make it harder to enter the UK, and indeed that the Government doesn’t want the UK population to rise above 70 million. This is dangerous, unsustainable rhetoric, and it’s precisely what the immigration debate doesn’t need from Government Ministers.

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Nigel Stanley

The new chair of the FSA Adair Turner has been typically direct in announcing his determination to clean up the City. This is exactly the kind of stuff the TUC has been saying for years, often without much support.

The BBC’s Paul Mason reminds us however just how strong the support for ‘light touch’ regulation has been in government.

And anyone who thinks the Conservatives are any better on the basis of today’s speech by David Cameron should read the report (pdf) commissioned from John Redwood and others by the same David Cameron. This contains the following gems:

“We see no need to continue to regulate the provision of mortgage finance, as it is the lending institutions rather than the client taking the risk.

We recommend deregulating venture capital fund raising, and investment for professional investors.”

Almost the whole political and economic establishment bought into ‘light touch’ regulation. It would be nice if they all said sorry.

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Nigel Stanley

I went to an interesting seminar this morning at Consumer Focus – the new statutory consumer organisation formed from the National Consumer Council, Postwatch and energywatch. It brought together a range of organisations – unions, thinktanks, consumer and advocacy groups  – with an interest in the effects of the financial crisis and recession on wider society. Mick McAteer of the Financial Inclusion Centre kicked off what was inevitably an extremely wide ranging discussion that equally inevitably did not come to a set of neat conclusions, but did start a process and raise lots of interesting issues. Here are a few random points from my notes either of good questions or interesting facts that were new (at least) to me, and which I’ve reported on a non-attributable Chatham House basis.

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Nicola Smith

The CBI’s Deputy Director-General, John Cridland, has predicted that “changes in the economy since the recessions of the eighties and early nineties should help us avoid the levels of unemployment we saw then” because “the UK labour market is much more flexible”. But does a ‘flexible’ labour market with weak employment protection reduce the likelihood of us experiencing unemployment?  According the OECD the answer is no. Their research shows that there is little linkage between employment protection legislation (EPL) and national employment rates – while strict EPL can make it harder to hire, it also means it’s much harder to fire.

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Nigel Stanley

Buried away in the Guardian technology section is a fascinating story that suggests that automatic trading by computers has been a contributory factor in the financial crisis.

It might be better to see this as a symptom, rather than a cause. Computer trading in products that few can understand is a result of a particular model of how banking and finance should work – one that now ought to go.

Roger Darlington’s Nighthawk blog also discusses this.

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Nigel Stanley

The state is now the majority shareholder in RBS and the biggest shareholder in other banks.

This did not happen because of some leftist urge by a retro Labour government, but because they needed rescuing from their own folly.

It does not look like their directors get this.

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