Lessons From The Economic Crash

Politicians divert attention from their own shortcomings by blaming bankers for the economic crisis.  This of course ignores the fact that it was they who relaxed controls on lending in the first place.  However, the problems in our country and our economy run much deeper than casino banks and cheapskate politicians.  At the end of the day, we were the ones who allowed spin to prevail over reality, feasted on cheap credit and ignored every warning sign that popped up.  One person one vote is a noble aspiration and in theory should deliver the strongest and most respected form of government.  However, this equality is double edged as politicians use bribery to gain and hold power, pandering to the lowest common denominator.  Winston Churchill; “democracy is the worst form of government except all the others that have been tried.”  Mr. Churchill gave his all to protect our freedom but where we are now falls a long way short of what he fought for. 

Although recent Labour governments plumbed new depths in spin, their methods were by no means new. Throughout the last century there was a steady move towards career politicians and weasel words.  Political parties now follow votes rather than principles and the consequences are predictable and dire.  The European Union has also played its part as there can be little doubt that the constant erosion of our national and local powers has undermined the purpose, function and strength of our democracy.

We now struggle to compete commercially with other nations or influence those with little regard for human rights.  China, with twenty five percent of the world’s population, and likely to overtake America as the world’s greatest superpower, is a dictatorship.  Other fast growing nations such as Pakistan are not much better and Russia has just witnessed the orchestrated return to power of a former KGB agent.  Such dictatorships pose obvious dangers, but such is the parlous condition of our own democracy that we can hardly expect other nations to respect or copy it.

The danger of our current trajectory cannot be overstated.  We are steadily moving towards an economic crisis which could mimic the 1920’s depression in the Weimar Republic that gave rise to Nazism.  Public sector cuts have already provided a platform for industrial unrest and our straightened circumstances will make the usual solutions impossible. Although we have survived many such episodes in the past, there might not be a happy ending this time round.  We are now a country mired in debt with a sharply divided society, and moving from industrial unrest to civil unrest is but a small step.

Politicians crave the approval of the electorate and one of the easiest ways to achieve this is by ramping up spending and letting someone else worry about the bill.  For many years professional politicians have been exploiting an ill-informed and often disinterested electorate by bribing them with their own money.  This represents a certain recipe for disaster but how can we create a well informed egalitarian society with a healthy interest in the political process?  The expenses scandal provided an object lesson in the perils of trial by media as everyone lost.  Public scorn was reinforced and MPs are now regulated to such a degree that few accomplished or successful people will actually consider entering the political arena.  The Levenson Inquiry will more than likely exacerbate the problem and it will only be possible to reverse this trend if we once more learn how to trust and respect our elected representatives.

”Those who don’t know history are destined to repeat it,” said Edmund Burke.  We either descend into an abyss of confrontation and recrimination or we get a grip on the issues which caused the meltdown.  The next generation must be given the knowledge and understanding they will need to avoid repeating our catastrophic mistakes.

A healthy political system uses the lessons of past mistakes to guide it, and the present coalition is trying to grasp some nettles.  However, our problems run so deep that any government is going to need an enormous amount of long term support to get the job done.  The Coalition is already coming under pressure casting doubt on the difficult period that lies ahead.  At some point they will have to seek re-election and it would be soul-destroying to slip back to square one in yet another dash for power.  Ed Balls now has the brass neck to demand a return to the same inflationary policies that caused the crisis in the first place.  We must break this cycle before it breaks us by ensuring that every lie, blunder and vanity project that contributed to this calamity is fully taken on board before political chicanery combines with the passage of time to obscure the truth.  The ultimate answer is an informed, interested and involved electorate and that is what we must now seek to create. If we fail, then our children will be left to pick up the pieces – if they can.