HARVEST THANKSGIVING this
year is celebrated under the looming shadow of financial
and economic crisis. "The party's over!”
proclaimed Nancy Pelosi, the Democrat speaker of the
U.S. House of Representatives, only to lose the support
of Congress for an initial rescue plan for the markets,
which might otherwise have succeeded. She was right
of course, but like perhaps too many present-day politicians
she was willing to risk the national interest for the
sake of scoring a party political point, something which
is perhaps symptomatic of a political generation which
looks a shade too hungry for political power to be capable
of uniting people for the common good – and not
merely in the U.S.
The short-term bail out by the Federal Reserve and central
banks is a vital respite. But it can only be a very
temporary respite to offer some space for better and
safer regulations in national and international financial
markets to be introduced during a now inevitable economic
recession. Such regulation is now urgent, but it will
be difficult. As the Irish government has already shown,
international agreement is likely to be very hard to
reach at a time when national economic difficulties
and differences are liable to increase and so exacerbate
international competition. I find it difficult to believe
that most politicians will prove themselves able to
measure up to the international challenges that are
really needed. Inevitably a new and relatively inexperienced
American President will be able to call the shots and
impose regulations which are likely to be most suited
to American interests – which will consequently
be inadequate for the global community as a whole, especially
poorer countries.
.
.
|
Serious
questions need to be addressed by our own politicians
about the real nature and risks of financial globalisation.
It has taken place with the enthusiastic encouragement
of a British government which has been only too keen
to profit from the bonanza offered by the international
financial dominance established in the City. Some will
try to resist the idea that 'the party is over,' but
the truth is that some more traditional banking practices
and ethics need to be restored and enforced if any real
trust is to be re-established in our financial markets.
Stronger discipline and controls are likely to be subtly
resisted, and if any government insists on them, capital
may take flight to more 'relaxed' financial climates.
So we are likely to be faced with a choice between the
speculative interests of a dominant City and the interest
of the rest of the population in stronger financial
security and economic stability.
|