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

[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.