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Clegg steps out of Cable’s shadow
Nick Clegg’s assured performance in last week’s leaders’ debate has helped him step out from the shadow of Vince Cable, so much so that he did not even need his finance spokesman during a trip to Cardiff on Monday.
The Liberal Democrats, so reliant on Cable’s well-publicised economic acumen during the past two years, has used him alongside Clegg for much of the campaign.
But despite being scheduled to attend together, Clegg took his recently found wow factor to the Welsh capital on his own.
It was put down to a logistical problem by the party’s press machine, but as their candidate for Cardiff Central said — they always knew they had a good potential finance minister, now they know they have a potential prime minister.
The LibDems are enjoying a level of popularity not seen since men wore top hats, thanks to Clegg’s confident performance against the ruling Labour party’s Gordon Brown and the Conservative leader David Cameron in Britain’s first TV debate.
I went to see the man of the moment, first in a presentation of its green policies and then in a Q&A session with students at Cardiff University.
What was notable was Clegg’s directness, in his use of non-political vocabulary.
from MacroScope:
‘Ken Clarke for Chancellor’ is no joke
Ken Clarke shouldn’t underestimate how strongly the city economists polled by Reuters last week want to see him serve as Britain’s finance minister next term.
The Conservative shadow business secretary and one time ex-Chancellor gleaned a few laughs from Thursday’s BBC Question Time audience when asked about the poll, saying: “There’s a limit to how much of a glutton for punishment you’re going to be.”
But economists would dearly like to see the 69-year-old’s appetite for punishment return soon. No-one came close in the Reuters poll to touching Clarke for popularity. Some 16 out of 29 economists picked him as their first choice for Chancellor.
This was more than twice the number of economists who want to install second-placed Vince Cable, the experienced Liberal Democrat treasury spokesman whose quick wit has made him a public favourite.
For Clarke to serve, Conservative leader David Cameron would first have to dump the party’s likely choice for finance minister George Osborne – a decision that would mean Cameron had gone “slightly off the rails”, according to Clarke.
On Question Time, Clarke was loyal and wholesome in his support for Osborne, who fared poorly in the Reuters poll. He finished fourth from the five choices on offer and behind the current Labour incumbent, Alistair Darling.
Too big to fail? Guerrilla central banking and the last resort
Deciding it was safe to come clean because banks are now on a more even keel and the worst of the credit crisis is behind us, the Bank of England has told the nation that at the height of the turmoil it secretly lent Royal Bank of Scotland and HBOS a colossal £62 billion, which is more than the entire British defence budget.
Both banks faced the imminent closure of high street cash machines and the curtailment of normal banking operations across the country.
The Bank said “this was a dire emergency” and Downing Street called the secret lending of taxpayers’ money in the Autumn of 2008 “a powerful reminder of how close the banking system came to near collapse.”
In Westminster, some MPs were flabbergasted, even though the loans have now been repaid.
“It is astonishing that this was kept secret for over a year,” said Vince Cable, finance spokesman for the Liberal Democrats. “The government has treated taxpayers like children while expecting them to foot the bill.”
John McFall, Treasury Committe chairman, said the sum caused “a little bit of an intake of breath thinking how many universities, how many colleges, how many jobs you could support with this.”
“It’s Enought to Make Anyone Feel Queasy,” was Ian King’s headline in The Times. “Any More £62 bn Loans You Haven’t mentioned, Merv?” asked the Daily Mirror, addressing itself to Bank of England Governor Mervyn King.
I take issue with some of the comments being thrown out today such as “the taxpayer has footed the bill” How so? the money has been repaid and no doubt with something extra on top as i’m pretty sure it’s not free money. the comparrisons with schools , universities , defence are not paralleled as there is no return from sone of these expenditures whereas with a “loan” and loan being the key word here, there is a return of the original investment plus some profit for the tax payer. Imagine what could be done if the government sold their stake in the major banks at a significant profit in the future. There’s exra money in the pot which wouldn’t have otherwise been there to sread downward on education and health and the armed forces. Where will the outcry be then.Individuals are not necessarily stupid but people en masse are. Look at the panic which eventually led to the collapse of Northern rock when it was announced they’d asked for a facility , not even taken , from the Bank of England. Mass hysteria and people queueing to withdraw the lifeblood of the bank for fear of them going under yet they themselves perpetuated the ultimate demise of the bank.Good call by the B of E I say. you can’t trust idiots to make the right decision.
from MacroScope:
A path strewn with difficulties
An old Chinese proverb states that it is better to take many small steps in the right direction than make a giant leap and fall back. Judging by the number of bank lending initiatives announced over the past three months, British policymakers are taking this to heart.
On Monday, Britain announced no fewer than eight measures to kickstart lending in its credit-starved economy. Despite pouring 37 billion pounds of public money into major banks last October and pledging hundreds of billions more in guarantees, the government had to admit it needed to take more credit risk off banks' books.
Monday's package is designed to be comprehensive. It includes -- amongst other things -- a fund to allow the Bank of England to lend directly to businesses, a framework for boosting the money supply if needed, a guarantee scheme for asset-backed securities and the offer of insurance against potentially explosive losses.
None is a silver bullet and the devil will be in the detail. Much of the nitty-gritty of how these measures will work is still not known.
It is also likely to be a slow process. The Bank of England's 50 billion pound asset-buying pot is one of the few measures to take effect immediately. Analysts at BNP Paribas calculate this equates to just 2 percent of bank lending in Britain compared to a ten percentage point drop in lending in the last year.
One opposition politician, Vince Cable, likened attempts to kickstart bank lending in Britain to "giving a kiss of life to a corpse." Colourful. But a revival in bank lending is indeed by no means assured. More steps may yet be needed.
An astute piece. A core problem is that the Banks themselves don’t know the extent of their losses, so how can investors have confidence in their balance sheets? This fact means that the Government, with this latest insurance scheme, is again writing a blank cheque to the Banks on behalf of the taxpayer.
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The Wall
