Is the credit crunch the new bird flu?
And then the media discovered a distraction – was it the departure of Tony Blair? – and the moment bird flu left our screens and departed the headlines, everyone forgot about it. And millions did not die, and entire continents were not decimated, and nothing much happened except Bernard Matthews had a very lean year.
Cranmer has this feeling over the ‘credit crunch’. Yes, certainly there is some sort of global financial phenomenon going on. A few banks are collapsing, recession looms, house prices are falling, and governments are spewing out billions in bailouts just as they were mass producing Tamiflu (and where has all that been stashed?). Oh, and Iceland is bankrupt, but who really cares about a lump of volcanic rock with half the population of your average shire? Zimbabwe has been bankrupt for decades, yet the global economy has continued merrily rolling along.
We have been here before, and we recovered through application, effort, ingenuity and free enterprise which enabled economies to once again thrive and people to feel financially secure. And doubtless we shall be here again, for 'boom and bust' is as natural to capitalism as 'snap, crackle and pop' is to rice krispies. It is only when they are soaked and soggy that they lose their life and vibrancy; and it is only when capitalism is drenched in regulation and artificially controlled through state intervention that it ceases to function as God intended.
But the media love a crisis. In fact, they love a crisis as much as the EU, for each and every day the crisis endures, the only source of information is the media, and the only solution, according to the EU, is more EU. While the media see sales and viewing figures soar, our masters in Brussels pontificate from the political pulpits of the continent the false gospel that nation states are impotent, and salvation is to be found in a Europe-wide coordinated response which only a European government can solve. And so we need the Lisbon Treaty, and we need it as urgently as Bernard Matthews needs Tamiflu. And if we delay, there will not only be a shortage of turkeys for Christmas, but Christmas itself may be cancelled because Santa banked in Iceland. And he had shares in Hamleys. And Hamleys banked with Northern Rock, but has just moved its billions to Ireland, or Germany – anywhere which guarantees every deposited euro without limit – for these countries now have the safest banks in the world. So Santa is moving to Dublin, or Berlin, and exchanging reindeer for leprechauns, or Volkswagons, for the only hope he has of meeting all of his service and supply commitments over the next eight weeks is with state aid. Santa has been nationalised.
All the credit crunch needs is a vaccine. And this is quite simply a good dose of Thatcherite common sense. It is not so much that markets must be unregulated – for there is no such thing as a totally ‘free’ market – but capitalism must be permitted to sift and sort according to natural law. The antidote to the crisis is not state intervention or other Socialist ‘remedies’, for these will only draw out and delay the inevitable. There is pain in surgery, but life has its trials and tribulations. Since a collapse and major realignment are inevitable, it is much better to get it over and done with in a short, sharp shock rather than a long and drawn out affair which only contributes to the ‘creative destruction’ of capitalism.
Banks have become the British Leyland of the 21st century. Just as billions of pounds of taxpayers’ money could not sustain the inefficiencies of the nationalised companies of the 70s, so the boards of directors and shareholders of these bloated banks should be left to suffer the consequences of their actions or forced to choke on the fruits of their bad decisions. They made their enseamed bed; now they must stew in their corruption. Shifting the debt from the private sector to the public sector does not make the debt disappear. It simply postpones the humiliation of going cap in hand to the World Bank as inflation and unemployment soar, which seems to be how all Labour governments end.
But the left-dominated media is instilling into the hearts and minds of the undiscerning majority that the credit crunch is caused by greed, the cause of greed is capitalism, and the causes of capitalism are the evil right wing and the selfish nation state. Thus the only solution is some nebulous third-way ‘multilateral network for a new global economy’, as the President of the World Bank demands. Even Iceland is said to be pondering the advantages of re-joining the EU.
No. Continent-wide action and regulation has not brought the solution, and neither will world government. The solutions are found within the sovereign powers of the nation state: each must do as it sees fit, and be freely judged at the ballot box. Some governments will succeed, and some won't. Some financial institutions will go to the wall, and some won’t. Some people’s homes will be repossessed, and some won’t. Some companies will call in the receivers, and some won’t. Some people will lose their jobs, and some won’t. It is not the law of the jungle, but the natural law in a liberal democracy of a healthily functioning market. The rich man in his castle and the poor man at his gate must both live or die by the choices they make. Insulating either or both from the consequences of the exercising of their free will not only creates moral hazard; it sustains the left-wing mantra that the State is the comforter, the protector, and the ultimate source of salvation; it perpetuates the myth that the State has supplanted the Word of John’s Gospel - that all things are made by it, and without it was not anything made which was made.
Or perhaps we simply need a general election, or a war, or the return of bird flu. And then everyone will forget about the credit crunch, for the BBC and The Guardian will once again dictate the prayer lists of the nation’s faithful.