You say crisis, I say New Deal

[f4f3]

Strange times indeed.
The Labour Government's wizzzard wheeze of offering to buy stakes in wobbly banks seems to have shored up those banks (and is being aped across the world) but doesn't seem to be encouraging those banks to lend to each other, never mind little old you and me. I can't say I'm terribly surprised by this - when the wonga is flying out the door at such a rate, it was fairly predictable that the banks would want to curl up on their replenished hoard rather than send it out to earn a leveraged dollar.
Oh, and have you noticed how rescued gamblers, sorry, financiers, never say "Thank you", far less "Sorry"? All they do is whine about the conditions and the amount of the dole cheque they're picking up. Ingrates.

Of course this has a knock on affect in the so-called "real" economy. You know, the one where small businesses, savers, and employees live. I'm a tad sceptical about the predictions of 2 million unemployed in the UK by Christmas (except that such predictions are self-fulfilling to a degree) but the figures took a huge jump this month, and, as we all know, unemployment is a trailing indicator. Or something.

So it looks like the government will have to kick off Phase 2 of the great bail out - a massive investment in public sector spending. By going out and employing more people directly, or commissioning work from the private sector, they'll guarantee jobs and give people money in their pockets to spend. Oh, and we'll also get a direct return in the form of completed projects. I'm not excatly sure what these will be - we're already paying for the Olympics and Commonwealth Games - but there's a golden opportunity to fight fire with water here when it comes to Climate Change. Expansion of alternative power generation, wind, wave or solar, has been hampered by high start up costs. I expect a lot more wind turbines and tidal generators to get the green light before Christmas.
So anyone with experience responding to Government RFPs and ITT's should brush up their CVs (oh, wait, that's me).
I'd also like to see investment in green lanes, cycle paths and pedestrianisation in cities, but these have a low profile, and sound a little like getting the proles to work on chain gangs, they smell a little bit of the YOP schemes of the 70's and the YTS swindles of the 80's (yes, I am that old).

There's never been a better climate to kick this off - people who have grudgingly accepted the necessity of pouring £50 billion into the banks for no immediate return will hardly wince when the government invests the same again in tangible projects which provide jobs and useful infrastructure. The Lib Dems will have to support the package, and the Tories will look like fat-cat special pleaders if they approve bail outs to their chums in the City while booing new factories in Tyneside.

So all it took for New Labour to become the nationalising, high spending Labour Government I yearned for was a collapse in the global economy.

Comments

[chickenfeet2003.livejournal.com]

The trouble is the New Deal, though touted as some kind of Keynesian panacea, didn't work all that well. What pulled the US economy out of depression was the war. Nothing gets the economy going like Armageddon.

[f4f3.livejournal.com]

As amelia_eve points out below the US has been on a war footing for quite a while now, without any lasting benefits. Maybe contractors have just become more effficient at syphoning off all the benefits than they were 60 years ago.

[chickenfeet2003.livejournal.com]

I think part of the difference is that the US has been on a war footing without war taxation. Also, it's quite a small war and it doesn't use up vast amounts of stuff that needs to be replaced so it doesn't really generate much employment.

[zenicurean.livejournal.com]

Not to mention Roosevelt didn't even grasp Keynes all that well. Government spending never went far enough in the first place; with more federal money came less state and municipal money. The job relief programs could obviously be only entirely temporary in nature. What more, both FDR and Hoover obviously had advisors buying into fundamentally rubbish theories about what was happening.

Their complete confusion of ideas is evident all around the program, and was a major part of what made FDR pull these ingenious stunts like the Revenue Acts of 1935 and 1936, which mostly had the effect of making the US more of a crapsack place in which to do business. These people did not for the life of them grasp that stimulating investments requires profitability.

[amelia-eve.livejournal.com]

Yeah, that's all well and good on your side of the pond, but I don't think that even the collapse of the global markets can affect enough US voters in time to fully save this election, and we don't get another chance for four whole years of chaos.

We've already got a war going, but all it's done is funnel money to the Bushies through their contracting agencies, to make sure they continue to fatten on the military teat even after leaving office.

Last night's debate made me want to cry.

[f4f3.livejournal.com]

Do you think that McCain is likely to win, then? I haven't seen any coverage of the debate yet, but last I heard Obama had something like a 14% poll lead.

[amelia-eve.livejournal.com]

I want very badly to believe that Obama has it all locked up, but I just can't believe it until he is actually sworn in. The incumbent crooks are so slippery that I am sure they still have many tricks up their sleeves.

I also think that Americans are not yet ready to identify themselves as down and out. I live with a conservative who is all about the personal empowerment and positive thinking, and I don't think he is unusual. So many people here are desperate to keep believing the lie, because if they don't, they will have to admit some failures of their own.

Plus, you just can't discount plain old racism.

[f4f3.livejournal.com]

I had an interesting conversation with a Scottish friend of mine who's been in the mid-West for most of the last decade. I was quite convinced America would not vote for a black president, whereas he was sure they would. I hope he's right and I'm wrong...

[made-of-paradox.livejournal.com]

BTW, I love the icon.

[amelia-eve.livejournal.com]

Thank you! When I decided to make it, I was fascinated to discover that the Fisher-Price toy telephone is still almost exactly the same as it was in my own childhood. I wonder if kids today even recognize it as a phone.