Thursday, September 25, 2008

Fighting Turbulence 2

When my children learned to climb trees, I always insisted that they needed to be able to climb down as well as up.

Gordon Brown is now being hailed as the only person capable of leading the British economy through an economic downturn.

"We would be mad to get rid of Gordon," said a minister, a Brown loyalist who wants him to lead the party into the next election. "There is no one else with his experience to get the country through the global financial crisis." [The Independent, 20 September 2008]

But experience going upwards doesn't imply expertise going downwards. We understand that the September 11th terrorists had learned to fly planes but not land them safely. Lots of financial wizards made money during the prolonged bull market, and then proved their incompetence and/or negligence as soon as the market faltered.

At the Labour Party Conference in September 2000, Brown promised the end of boom-and-bust. [Power to the People, 18 September 2008] And more recently, in March 2008, he promised to fight global financial turbulence. As Willem Buiter said in the Financial Times, welcome to a world of diminished expectations [FT August 2008 via Procrastinating Politicians]