Comment on Janet Daley

Janet Daley recently wrote an article in the UK Telegraph that presented her opinion on President Obama and Prime Minister Brown’s view that within the current economic crises lies an opportunity.  The article appears here.  My take on Janet’s argument is basically this: Minister Brown (the Al Gore of British politics, minus the US Supreme Court and elections) and President Obama are using the current economic malaise to institute a leftish power grab, which is fool hearted and is not addressing the crises at hand.

She claims that the economic crisis was enabled, “as much by the Left-liberal determination to spread prosperity through easy credit to the poor, as by the greed of bankers.”  This is an entirely political claim that speaks to no more than the margins of the origins.  The crisis was enabled by several large developments: the innovations of modern finance, growth of China’s economy without a corresponding and commensurate increase in consumption by Chinese consumers, easy monetary policy by Greenspan to combat the bursting of the dot-com bubble.  What enabled the crises was a huge pool of money in search of return.  People marketing mortgage backed securities and derivatives thereof made an extremely convincing case that this money should go with them. This was not a Left determination to get poor people in houses nor the connivance of a bunch of capitalists.  It was people cognizant of incentives. Politicizing this serves no useful purpose.

Also, she states in closing that, “We are being led to believe that public debate should be all about economic mechanics when it should really be about political principle: just how many freedoms do we want to lose while governments pretend that they are the solution?”  So, her prognosis, given the argument she’s making, is that Messrs Brown and Obama are wrong because of personal freedoms?  She argues that Messrs Brown and Obama are power grabbing, then states that we should object because this power grab infringes on personal freedom.  How about the more pertinent argument that the power grab does not address the crises.  Instead of power grabbing, Messrs Brown and Obama should be expending all their energies to find a solution to the banking crises.  (More on this to come.) This is a more relevant argument, since there will not be much of an economy left to be powered by clean energy sources if the financial system is not brought back to life.  She completely misses the quite relevant point that she brings up, that Messrs Brown and Obama are using the crises for a power grab.  Being somewhat of an optimist, I would not necessarily call it a power grab, I would say that President Obama is rightly shifting priorities because he was put in office to do so.  However, the President should first focus on banks then worry about wind turbines and health care.