National politics

Crisis? What crisis?

I was in the conference hall this morning to hear David Cameron’s emergency address (full text here) to the Tories.

As Iain Dale says he hit the right note offering to assist the government in any emergency legislation required to deal with the financial crisis.

Dale thinks he even hinted that a form of national government might be necessary. I can’t say I read that into anything Cameron said.

I am sure that we are going through a worrying, albeit temporary, crisis but I can’t help thinking I have seen it all before. I remember the secondary banking crisis of the early seventies because my Dad lost his job in ’74. Do you remember it? Remember the Latin American debt crisis in the late eighties that almost broke Citibank? I was doing business with Citibank just after that so I do. How about the $60 billion bailout of the US savings and loans (building societies) in the late eighties – the US government made a small profit out of this transaction. I’d almost forgotten that one not having been even remotely involved.

This crisis will all seem very distant and unimportant before too long. It is worth remembering that Labour keep going on about Black Wednesday and 15% interest rates. I was visiting the Treasurer of Co-operative Bank that day at 11am when it all kicked off; he very politely disappeared after popping in to tell us what was up. That headline rate only applied intra-day and from September 1992 until recently we have enjoyed relatively benign economic circumstances, engineered by Norman Lamont. No Labour figures like to remember their support for the ERM that led to that crisis. About the only people who were against our ERM entry were a few lonely Eurosceptic figures on the right.

We might have called Gordon Brown’s gold sales in 1999-2001 a crisis, they cost about the same as Black Wednesday, but did you even notice them?

Our current government could have used Norman Lamont’s nice decade to rebuild the public finances but instead Gordon Brown spent 10 years as chancellor trashing them.

PS I wonder if anyone will notice that I forgot to mention the dot com crash.

4 replies on “Crisis? What crisis?”

I do hope you are right that this is just a temporary blip – but I doubt it. I certainly can’t remember anything as global as this. Over-valued property, loss of confidence in banks and the banking system, peak oil and climate change is a very, very heady mixture.


Oh. I forgot the 270 billion yuan restructuring of the Chinese banking industry when it got overextended lending to booming China in the late ’90s.

See Bank of Internatrional Settlements paper here.

China just kept booming on.


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