Saturday 20 September 2008

Light at the end of the tunnel?

There is a strange new mood emerging this weekend as Labour conference starts to gather, and it is a sense that maybe a real turning point could be upon us. Judging the 'bottom of the market' is something economists have been speculating about for weeks now - but in politics too, discerning whether Labour's fortunes will fall further or whether they might have good grounds to rise again has kept the pollsters guessing. The ability of our leaders to stand firm in the face of global economic turmoil and stare down the risks of precipitous catastrophe is, of course, the biggest test of all right now. The past day's news of a regulatory overhaul of the financial sector and new limits being drawn on shadowy trading practices is welcome, as the markets themselves show. If Gordon and Alistair have, in fact, managed to help steer a course away from the destructive forces of short-selling and a hedging culture that gambles wrecklessly with the livelihoods of others, then they will rightly deserve some plaudits. At a time when the laissez faire market-know-best solutions offered by the Tories are a busted flush, Labour should be shouting loudly that active government intervention, regulating excesses in the best interests of the many not the few, are the right path to follow. Even George Bush is forced to reluctantly recognise that collective governmental activism to protect ordinary working people is needed more than ever! If Gordon can seize the mood of the moment, recognise that the vast majority of people are fed up with the entrenched vested interests of bankers and speculators, then he will be able to speak - and act - with the support of the vast majority. We are not out of the credit crunch woods yet by a long stretch, and the Treasury will still need to show a stronger willingness to boost liquidity in the mainstream mortgage market over the year ahead. But if Labour's leadership is able to break away from the old orthodoxies and capture this new mood, it will be a direction that the public will want to reward.

Chris Leslie

No comments: