Lord Falconer adores Obama, defends Brown

Posted on 16 December 2008 with no comments from readers

Former UK Justice Minister Lord Falconer addressed a power breakfast at the Dubai International Financial Centre and spoke about the political implications of the global financial crisis. He defended British prime minister Gordon Brown while putting enormous faith in the leadership of US president-elect Barack Obama.

This was an interesting insight into the heart of the British government establishment and its approach to the global financial crisis, and all members are the UK establishment are keen to stress the global source of the crisis lest it reflect badly on their own stewardship.

But it is impossible for a government to dodge responsibility for its actions while at the same time claiming that it is doing a good job at handling the crisis. A brilliant lawyer Lord Falconer almost pulled it off but some of his own examples let him down.

UK debts surge

He noted that in 2001 UK bank deposits and borrowings were in balance, while by June 2008 this had turned into a $1.5 billion deficit. This left a ‘real liquidity problem’ now that the wholesale lending market had collapsed around the world.

But who allowed this to happen? In the UK surely the burden of responsibility lies with the democratically elected government and its finance minister, then Gordon Brown.

Lord Falconer argues that Brown was a victim of wider global forces that led to over-borrowing for real estate speculation by the general public, and that he has emerged from the past few months as a hero because of his stance on the re-capitalizing of the global banking sector.

The British prime minister can take credit when things, apparently go in his favor, and deny all responsibility when they go against him. That sounds like somebody who is not really in charge.

Obama

At the same time Lord Falconer is expecting great things from Barack Obama as US president, and feels not just that one man can make a difference but that his leadership can turn the whole giant US economy around. Is it not then logical to suggest that the UK should ditch Brown and find itself an Obama?

Certainly the UK expatriates in the audience thought so and rounded on Lord Falconer, a somewhat intimidating figure as the former most senior lawyer in the country. He took clever legal defense: emphasizing the overwhelming importance of saving the banking system, whatever the consequences to the wider economy.

And having got the audience to accept that assertion moved straight on to the less certain conclusion that the government’s spending program is the right way to proceed – and brushing aside sharp disagreement from no lesser figure than the German finance minister last weekend. Then it was a fairly uncontroversial step to conclude that Gordon Brown was the right man for the job and by implication the UK’s answer to Obama.

For the time being, as Lord Falconer, Tony Blair’s one-time flatmate reminded us the banking crisis is still in progress, and the total bill to the UK taxpayer is presently $900 billion and could rise to $1.5 trillion. This is the legacy of Gordon Brown to future generations.
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