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Wednesday, August 18, 2010

Passing the buck

Yesterday saw signs that the reality of the economic situation is at least understood by some senior Labour figures, when the immediate past-Chancellor of the Exchequer, Alistair Darling launched a thinly-veiled attack on former prime minister Gordon Brown, saying Labour lost the general election because it ignored the deficit.

According to the Daily Mail, Mr. Darling said that Labour allowed itself to be sidetracked into an argument for investment over cuts, seen by many as a reference to Mr Brown’s election mantra. And in a warning to his party colleagues, he urged them to accept the need to cut the deficit:

In a lecture at the Edinburgh Book Festival - sponsored by RBS - he set out a staunch defence of his handling of the economy and made several swipes at the culture of risk among banks.

And he conceded that Labour lost the general election because it failed to persuade voters it had a ‘plan for the future’.

He said: ‘I remain confident that considered history will show that we handled the financial crisis of the past few years with competence, integrity and above all an absolute determination not to put short-term political advantage before the interests of the country.

‘But while I believe we won the war, we lost the peace.

‘Won because the decisions we made did, I believe, avert economic catastrophe - and we were just hours away from that happening. Lost because we failed to persuade the country that we had a plan for the future.’

At least one of the Nationalist parties also appears to have got it, with SNP MSP Kenneth Gibson saying: 'Alastair Darling cannot walk away from Labour's responsibility for the situation this country is now in.

'Two thirds of the cuts we now face come directly from decisions made by Alastair Darling.

'Alastair Darling may not have liked picking up the pieces of an economy Gordon Brown had ruined but he cannot avoid responsibility for cutting spending, cutting investment and risking economic recovery.'

The former Chancellor is of course standing aside from frontline politics so he can afford to be a bit more upfront about the financial situation facing the new government, though I would not suggest that he agrees with the way that his successor is responding to that challenge.

If Labour are to regain any credibility then whoever is elected as their leader next month needs to be equally as forthright in accepting some responsibility for the mess we are in and acknowledging that drastic action is needed to put it right.
Sorry, but it's going to get a LOT worse than even the coalition government admits.


Because of what's coming down the pipe.

I warned about a year before the UK real estate collapse that it was going to happen because of what was coming down the pipe in the US real estate market (my letter published in the WM used "chill wind" language), this prediction was made while the real estate bubble was still on the up and up and UK building societies were still talking of good times ahead.

Well, I have another warning, and it is a severe prediction: unemployment is going to get a LOT worse than it is now.


Because of what's happening in the USA - there is so much coming down the pipe that the low employment levels (meaning high unemployment and underemployment levels) is pretty much set in stone while small business owners remain mortified at what's coming down the pipe - not meaning to take up even more inches on Peter Black's blog and test his patience, the background 'for all this' is on Glyn's blog, another long suffering blog owner. Sorry.

If you think the UK/Welsh job market looks bad now - think again. There is retrenchment in the US private sector - small businesses are pulling up, I've noticed the parking lot in my building - people's cars normally gone by 10AM are still in the parking lot - they obviously have no job to go to. Pretty soon the apartment building will start to empty as the rent here is too high for folks without work. It's expensive to live near Washington, DC with a job - absent having a job it becomes very hard to stay here. Moving trucks will be moving people back to their home states - younger folks will hire one-way U-Hauls and drive across the USA to stay with their parents.

When the US job market gets flu - the EU/UK/Wales will get hit even harder. It's the way it goes when the largest economy in the world is being destroyed by Obama's 'health care' - it is destroying jobs on a large scale.
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