The Quickie

A bite-sized look at this week's news…

Money Money Money

Posted by therealquickie on October 14, 2008

With a recession looming, Brown and Darling have had to take drastic measures to get credit flowing through the veins of the British economy once again.

In a move, which mirrors the US governments unprecedented bank bailout on Friday 3rd OctoberBrown has insisted that injecting such a huge sum of money into the British economy is ‘the right thing to do’.

As the bailout package was announced, Brown informed listeners that this move was necessary, in order to ‘get the economy moving again’.

Fierce reactions

This drastic action has led to The Daily Telegraph’s Simon Heffer suggesting that ‘we are all socialists now.’

‘The intervention, or rather interference, of the state in financial and economic matters can only lead to sclerosis, the suppression of enterprise, the raising of taxes, starvation of investment, lack of innovation, technological retardation and the rise of the power of organised labour.’

Heffer’s comments provoked a response from The Guardian’s Peter Walker who calls on a reader’s comment to illustrate his point:

Simon, I missed the part where you pointed out what should have been done, and how a true capitalist approach would have ensured we never got into this mess in the first place.’

Seumas Milne’s article in The Guardian offers a  more optimistic view on the state’s intervention, explaining how nationalised banks, ‘could then become the core of a newly accountable and publicly controlled banking sector able to channel investment where it’s needed’.

However, even Milne warns that the financial situation is far from safe and explains that things could get much worse:

‘Even if yesterday’s package eases the domestic credit squeeze in the short term, all the signs suggest we are heading into something that goes well beyond a normal business cycle downturn… The threat is now of depression, not simply recession.’

BBC business editor blamed for crash in confidence

The BBCs business editor, Robert Peston, has been personally blamed for adding to the lack of confidence which has contributed to the financial crisis.

Michael Seamark’s article in the Daily Mail on the 8th October explained that, ‘viewers and listeners awoke to hear the Corporation’s business editor reveal that three of Britain’s biggest banks  –  Barclays, Royal Bank of Scotland and Lloyds TSB  –  had asked Alistair Darling for billions of pounds in funding.’

Seamark suggests that by breaking news of this meeting, combined with the commentary in his blog, Peston’s actions led to shares in all three banks falling, costing them millions of pounds.

The BBC did not take the allegations lightly, responding with an article defending their point of view, the prosecution seems to be that our reporting is irresponsible, scaremongering and is inflaming the situation by causing volatile share price movements’

‘Allow me to make the case for the defence. We have one primary responsibility and that is to you, our audience. Our decision to run a story is based on simple criteria. Is it accurate and would it be of significant interest and relevance to our audience? If the answer is yes then our presumption is to be publish unless there is a huge overriding interest not to.’ [sic]

With many of the general public struggling to understand the technicalities and implications of the bank bailout, surely this is the time, more than ever, for clear and concise commentary.

 

Will Drysdale (willdrysdale@hotmail.co.uk)

Main Story

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: