Opinion – Why are the Conservatives so incompetent at running the economy? – Mainly Macro: Simon Wren-Lewis – John Gelmini

English: Banks Furious As Shares Tumble, Eveni...

English: Banks Furious As Shares Tumble, Evening Standard, London, UK, 7 October 2008 (Photo credit: Wikipedia)

Rarely do I disagree with Dr Alf but on this occasion I cannot see that the last Labour Government handled the 2008 financial crisis effectively.

The narrative we were fed at the time was to the effect that the banks had made toxic loans, did not trust each other and that all the money had disappeared.

Then we were told that WE had to bail out the banks.

We did this twice and then several years later, we learn that the banks have been manipulating LIBOR, the currency and the prices of other commodities.

We know that a tiny minority of people doubled their wealth literally overnight and that their were huge capital flows through hedge funds and then through 40 different tax havens before transmutation into gold, gems, real property and art.

The bankers and those who gave them their instructions walked away scott free and are still at large. The Coalition have also done nothing about this situation but have manufactured a temporary housing boom.

Not one of our politicians is up to the task of reforming the UK’s finances or competitiveness, so Simon Wren Lewis needs to level his criticisms more widely.

John Gelmini

Opinion – Tim Geithner reveals in the raw how Europe’s leaders tried to commit financial suicide – Telegraph – John Gelmini

Official portrait of United States Secretary o...

Official portrait of United States Secretary of the Treasury Timothy Geithner Español: Retrato oficial de Secretario del Tesoro de los Estados Unidos Timothy Geithner (Photo credit: Wikipedia)

Goldman Sachs Headquarters, New York City

Goldman Sachs Headquarters, New York City (Photo credit: Wikipedia)

Dr Alf makes a good point. Europe and the UK are both behind the curve in deluding themselves into believing that if they talk things up enough everything will come right.

On the point about the Greeks, a child of six could see that with widespread property tax avoidance (nobody ever finishes the roof on their house or the roof of their business premises), productivity so low that it would make an English benefit recipient seem like a workhorse and Civil Servants retiring on full pension at the age of 38, that Greece was a hopeless case.

Dr Alf has said in other posts in earlier times that five important Greek families removed a lot of money out of the country and that this was the primary reason for Greece’s plight.

However, Greece does not make or sell anything that anyone wants, so other than relying on German tourists not enough was being done by that country to save itself.

Turning to Timothy Geithner, formerly of Goldman Sachs, he was the man who allegedly did not know the disposition of the $2.9 billion USD, given to Goldman Sachs as part of the bailout program, and the firm that advised the Greek Government on how best to present their shattered finances, was of course Goldman Sachs who as we were told by their CEO Lloyd Blankfein, “Do God’s work”.

Doubtless a different Goldman Sachs employee to Timothy Geithner provided this earlier advice and doubtless Mr Geithner knew nothing about this until the Europeans had decided to teach the Greeks and the rest of the PIIGS a harsh lesson.

John Gelmini